National Law Journal, IP Boutique Faces Suit Alleging Wage-and-Hour Violations

full article from law.com

Tresa Baldas
The National Law Journal
February 11, 2010

When legal secretary Karla Osolin used to work at Jones Day, she was paid a salary and overtime.

That's what caused red flags to go up when she took a job in September 2008 with Ohio intellectual property boutique Turocy & Watson. Now the firm faces a suit alleging wage-and-hour violations and stands accused of misclassifying Osolin and many others to avoid paying overtime.

"She knew when she came here that something was wrong. And then she called me," said Osilin's lawyer, Anthony Lazzaro, a class action plaintiffs lawyer, who is not surprised that he is suing a law firm over pay practices. "I think that there are plenty of law firms out there that are paying secretaries and paralegals a salary without overtime and not even realizing it."

Lazzaro of the Lazzaro Law Firm in Cleveland is representing an estimated 40 legal secretaries in a putative class action filed in the Northern District of Ohio against the Cleveland-based Turocy & Watson, alleging that the firm misclassified the employees to avoid paying them overtime, in violation of the Fair Labor Standards Act.

On Feb. 18, a notice will go out to all the potential class members after the parties agreed last week to conditionally certify the class to find out who wants to participate. The certification, which Judge James S. Gwin signed off on, is temporary, and the law firm could challenge it later.

Gregory Turocy, a partner at Turocy & Watson, declined comment.

The law firm has tapped Littler Mendelson -- the largest employment firm in the country -- to represent it. Barry Freeman and Edward Chyun of Littler, who are representing the firm, did not return calls for comment.

According to the complaint, the plaintiffs allege that none of them did any managerial work or directed the work of employees, or had authority to hire and fire. Under those circumstances, they allege, they do not fit within the executive exemption.

Lazzaro, who exclusively handles wage and hour class actions, doubts that Turocy & Watson is the only law firm to land in legal hot water over its compensation practices.

"I think companies across the board make mistakes when it comes to misclassifying employees. You don't see it very often that law firms do it, but it certainly happens." he said.

Management-side attorney Mark Tabakman, a labor and employment partner at Fox Rothschild, can attest to that. Tabakman, who is not involved in the Turocy & Watson case, has law firm clients who, he said, have unknowingly misclassified employees, not realizing it was unlawful until he pointed it out. For example, he said, he had one law firm client that was paying a receptionist a salary -- with no overtime -- when she sometimes worked 50 hours a week.

"They thought that she wasn't entitled to overtime. They were frankly stunned when I told them that she was," said Tabakman, who believes the IP boutique case offers a lessons to law firms.

"What law firms can learn is what any other employer should be aware of: It should properly classify employees as exempt and non exempt, "said Tabakman.

"I've seen it in a few law firms -- I see it in a lot of companies -- that they believe erroneously that paying someone a salary automatically exempts them from overtime," he said. "It doesn't."