Earlier this week the U.S. Court of Appeals for the Ninth Circuit affirmed summary judgment in favor of newspaper reporters who sued their employer for unpaid overtime, holding that the reporters did not satisfy the criteria for an overtime exemption under federal or California law. Wang v. Chinese Daily News, Nos. 08-55483 & 08-56740, 2010 WL 3733568 (9th Cir., Sept. 27, 2010).
Both the federal Fair Labor Standards Act (FLSA) and the California Industrial Welfare Commission’s wage orders exempt employees employed in a “professional” capacity from overtime pay requirements. Both the federal and California professional exemptions contain subcategories that are to be “narrowly construed.” The subcategory most commonly relied on by employers is the “learned professional” exemption, which is available to employees who meet the minimum salary requirement and whose work requires the use of advanced knowledge customarily acquired through prolonged academic instruction. The subcategory at issue in the Wang case was the less frequently invoked “creative professional” exemption, which is available to employees whose work requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor, as opposed to routine mental, manual, mechanical or physical work.
In holding that the newspaper reporters employed by the defendant Chinese Daily News (CDN) did not qualify for the exemption, the court examined a 2004 regulation of the federal Department of Labor construing the creative professional exemption as applied specifically to journalists. The regulation, 29 C.F.R. § 541.302(d), draws a distinction between work that requires “invention, imagination, originality or talent” from work that depends primarily on “intelligence, diligence and accuracy.” When the DOL promulgated the regulation, it explained that the majority of journalists are not likely to qualify for the exemption because most journalists primarily collect and organize information that is already public, and do not often contribute a unique or creative interpretation or analysis to a news product.
In addition to the DOL regulation, the court also considered previous decisions by the Third and First Circuits holding that print journalists were not exempt professionals. See Reich v. Gateway Press, Inc., 13 F.3d 685 (3d Cir. 1994) (involving reporters at a chain of nineteen local weekly newspapers); Reich v. Newspapers of New England, Inc., 44 F.3d 1060 (1st Cir. 1995) (involving a small community newspaper). The court compared these cases to Sherwood v. Washington Post, 871 F.Supp. 1471, 1482 (D.D.C. 1994), in which the district court held that a Washington Post reporter who was a prominent, high-level investigative journalist was the type of “elite journalist” whom the creative professional exemption was intended to cover.
Examining the evidence submitted in support of the parties’ respective summary judgment motions, the Ninth Circuit concluded that the reporters did not satisfy the criteria for the creative professional exemption, as their work was similar to the community newspapers described in the Reich and Sherwood cases, and lacked the sophistication of national-level newspapers such as the New York Times or the Washington Post. In the court’s view, the CDN’s reporters clearly did not fall among the “small minority” of journalists who are exempt.
Employers must be mindful that when an employee’s exempt status is challenged, the burden of proof is on the employer to prove that the employee meets all the criteria for the exemption. Given the Wang decision and the earlier decisions on which it relies, employers in general, and news organizations in particular, should exercise great caution in applying the creative professional exemption, and be prepared to prove that any employees classified as creative professionals are engaged in work that primarily requires “invention, imagination, originality or talent” and not simply “intelligence, diligence and accuracy.”
Aaron A. Buckley – Paul, Plevin, Sullivan & Connaughton LLP – San Diego, CA