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Finally, a court has set a precedent for an issue that's been
plaguing paralegals for years -- should paralegals be exempt or
nonexempt from overtime pay? Or is it a precedent? Here's what
On September 22, 1994, the United States Department of Labor (DOL)
abandoned its appeal with prejudice in DOL v. Page & Addison P.C.,
U.S. Dist. Court, Northern District of Texas, Dallas Division No.
3:91-CV-3655-P (Page & Addison). There will be no written Fifth
Circuit Court decision filed in New Orleans Appellate Court No. 94-
10435 affirming or overturning the district court's jury finding that
23 paralegals at the ten-lawyer firm are exempt from the overtime
requirements of the Fair Labor Standards Act enacted in 1938 (FLSA).
The jury's decision, entered on March 10, 1994, is binding. Its
decision is based upon the administrative exemption as set forth in
29 CFR 541.1 and 541.101 through 541.119. Exempt status applies to
Page & Addison's paralegals because each one was found to exercise
independent judgment and discretion when she performed her duties and
fulfilled her responsibilities, even though a supervisory attorney
must approve or reject the paralegal's work.
The Page & Addison is fact-specific; it relates only to paralegals
employed by that firm. This decision may trigger additional
litigation to exempt paralegals from overtime on a case-by-case basis
because a decision from the Untied States District Court, Northern
District of Texas, may have no effect upon paralegals in other parts
of the country. At this time, no opinion letter of the Wage-Hour
Administration exempting paralegals as a class from the Act is
forthcoming. The DOL considers paralegals as a class nonexempt from
the FLSA. If other court cases are decided in the future, the DOL
may schedule comment periods or hearings to propose a change to the
Regulations. The DOL might re-examine the issue to clear guidelines
for a firm to make a reasonable determination about the status of
its paralegals. Each law firm would have to determine its
paralegals' status based upon job descriptions and the duties it
delegates to paralegals.
Surveys show that about 50 percent of employers pay paralegals for
overtime and the other half do not pay them overtime for the same
tasks. The surveys also indicate that exempt paralegals are not
necessarily delegated more responsible tasks than are nonexempt ones.
Attorneys do not distinguish between exempt and nonexempt tasks.
Thus, it has not been determined if exemption for paralegals as a
class will expand duties in the paralegal profession.
Paralegals favoring overtime pay contend that exempt paralegals are
not paid at a higher rate to compensate them for the added hours
worked. According to the July 1994 Law Office Management &
Administrator Report, exempt paralegals average $32,798 per year and
nonexempt paralegals average $30,312. Although it appears that the
FLSA intended exempt employees to be paid more than an average
salary, the regulations requiring a minimum of $250 per week
($13,000) per year) be paid to exempt employees have not been changed
since 1974 due to political reasons.
Some paralegals are not convinced that they gain the financial
rewards, status and the perceived professional image that goes along
with exemption from the Act. The price of giving up overtime pay,
mastering the knowledge necessary to perform profitable tasks for
their employers, and taking the risks necessary to excel to top-notch
levels in this profession may not reward paralegals their expected
Because no clear consensus on this issue exists among paralegals and
their employers, NFPA delegates have decided to continue monitoring
the issue and not to take a formal position on it yet. Paralegals
and legal administrators could work with their employers on defining
the issue. Unless government regulations are changed, other law
firms may find themselves in the same position as Page & Addison. At
this point, paralegals and attorneys nationwide must accept the DOL's
policy of nonexempt status for paralegals as a class. If a law
office or department is not paying its paralegals overtime, it should
review its policies to ensure it complies with federal and state
laws. The prudent employer must use not only the Page & Addison
court decision, but also the regulations or an amendment to statutes
as guides to avoid exposing its firm to noncompliance.
With the absence of regulations that apply specifically to the
paralegal profession, it is up to the employer to delegate
appropriate tasks to its paralegals to allow exemption from the FLSA
on a case-by-case basis and to comply with 29 U.S.C. 213(a)(1). The
employer always carries the burden of proving the exemption. An
employer who repeatedly and willfully violates the Act could be
subject to a fine or $10,000 and imprisonment of up to six months.
The employer violating the Act is potentially liable to the employee
in the amount of overtime, together with an additional amount as
liquidated damages and a reasonable attorney fee.
This article was prepared by Dorene Ridgeway, chair of NFPA's Ad Hoc
Committee on Exempt/Nonexempt Status and has served on various
committees with the Washington State Paralegal Associaton since 1980.
A collection and commerical litigation paralegal at the Seattle law
firm Lane Powel Spears Lubersky, she holds a B.S. in Business and
From The National Federation of Paralegal Associations
Post Office Box 33108 Kansas City, Missouri 64114
Tel.: 816-941-4000 Fax : 816-941-2725
Internet: [email protected]
[I-L Note: This is an excellent organization who could use your
support. Check out their Web Site at http://www.paralegals.org]
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