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California registered nurses not necessarily subject to professional exemption under state law, even though they are exempt professionals under FLSA

May 2nd, 2012  |  Ron Miller

The U.S. Department of Labor has made clear that registered nurses who are registered by the appropriate state examining board generally meet the duties requirements for the FLSA’s learned professional exemption. A recent ruling by a California Court of Appeals addressed the distinction between the professional status afforded registered nurses under the FLSA, as compared to application of the professional exemption to registered nurses under the California Labor Code.

In Rieve v Coventry Health Care, Inc, a registered nurse who served as a field case manager (FSM) for a company that helped employers control workers’ compensation costs was found to be exempt from the overtime provisions of the FLSA. However, a federal district court in California, on its own motion, granted summary judgment in favor of the employee on the issue of whether she was exempt from coverage under California law.

FLSA exemption. The employee’s advanced knowledge was in a field of science and was acquired by a prolonged course of specialized intellectual instruction. Moreover, an examination of her duties demonstrated that her role was quite closely aligned with the position of a registered nurse. As such, the court ruled that she should be afforded the same treatment under the law as registered nurses engaged in the practice of nursing.

The employee exercised independent judgment and was engaged in nonclerical work, such that her primary duties required “advanced knowledge” that satisfied the duties test for the FLSA professional exemption. In fact, her job description was not so different from that of a nurse engaged in direct patient care. When the employee interviewed patients, she would try to understand their injury or condition and their past treatments so that she could consider alternatives and advise them accordingly. Thus, the evidence showed that the employee’s work was beyond that of a clerical worker. She did not merely input routine data, but engaged in activities that demonstrated that she was a skilled health care professional. Consequently, the court concluded that the employee satisfied all three prongs of the duties test under the FLSA professional exemption.

California exemptions. However, the court reached a contrary result with respect to whether the employee was exempt under California overtime laws. The Industrial Welfare Commission (IWC) has promulgated exemptions for professional and administrative employees. The employer asserted that the employee qualified under both exemptions. Observing that there was no issue of material fact as to the employee’s job duties, that the question of whether her duties fell into the professional or administrative exemption was a question of law, and that the employer had a full and fair opportunity to address the issues in its summary judgment motion, the court, on its own motion, granted summary judgment in favor of the employee, concluding that the employee did not fall into either the professional or administrative exemption under California law.

Professional exemption. Examining the professional exemption, the court observed that the IWC makes clear that “registered nurses engaged in the practice of nursing are not considered exempt professional employees unless they individually meet the criteria established for exemption as a professional or administrative employee.” Thus, while RNs are generally considered professionals exempt from FLSA coverage, they are not typically exempt under California law.

As an initial matter, the court disagreed with the employee that no employee with a nursing degree can ever be exempt from overtime coverage under this provision. Rather, because the employee was not engaged in the practice of nursing, she was not automatically immunized from exemption arguments. However, the court observed that California Wage Order 4-2001, Sec. 1(A)(3)(f) was probative of a significant policy distinction between the FLSA’s professional exemption and the California professional exemption. A Department of Labor Standards Enforcement opinion letter explicitly recognized the distinction between the FLSA and California law, and explained the rationale behind it: the desire to protect registered nurses until they are afforded the control and decision-making power they deserve. The court was unwilling to ignore a clear and deliberate policy choice by state legislators to provide more expansive coverage under state overtime laws than is available under the FLSA.

Although the employee was not engaged in the practice of nursing, the stated policy concern applied equally to her. She was a registered nurse who was employed in a position requiring her RN degree, in which she was still not afforded full control and decision-making power. (Rather, physicians held decision-making power to order a course of treatment and claims adjusters had authority to eliminate such treatment.) Thus, the employee did not qualify for the professional exemption under California law.