A physician assistant finds that sometimes being considered a “professional” can be a costly label.

After three years as a physician assistant at a large HMO in the Southwest, Ms. P discovered that she was not being paid time-and-a-half overtime rates when she worked more than 40 hours in a week.

She had never thought about the issue, until a neighbor was chatting with Ms. P’s husband and mentioned that overtime rates were a “federal regulation” that applies to all employees. The realization eventually led to Ms. P’s initiating a class-action lawsuit on behalf of all the PAs and NPs at the HMO where she worked.

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But first, she went to the company payroll department. The staff there was unsympathetic, informing her that she was “not eligible” for time-and-a-half overtime rates because of her “professional status” as a PA. They did confirm, however, that her time after 40 hours was paid at her regular hourly rate.

Next, she went online to do some research. She discovered that the regulations the neighbor and the payroll staff referred to were governed by the Fair Labor Standards Act, a piece of federal legislation from the 1930s. It exempted people in “the traditional professions of law, medicine, and teaching” from overtime rules. That meant the point in contention was whether the “professional” exemption applied to PAs.

After studying the wording of the regulations, Ms. P felt that she should be receiving overtime. She contacted an employee advisor at the U.S. Department of Labor, who checked with a supervisor before telling her that her “status was uncertain” and recommending that she “consult a lawyer.” Ms. P promptly made an appointment.

The attorney listened carefully to Ms. P’s presentation. After a few minutes’ consideration, he rendered his opinion that she and her colleagues were entitled to overtime rates and offered to do some preliminary research, free of charge, to determine the strength of her case. Two weeks later, he reported that a memorandum from the Department of Labor supported their interpretation that PAs are entitled to overtime rates.

The lawyer then filed a class-action suit against the HMO in federal District Court, representing all PAs and NPs whom the corporation had not paid at overtime rates for time after 40 hours. Apparently caught by surprise, administrators at the HMO called Ms. P to the executive offices to answer questions about her claim. “You’d better ask my lawyer about the lawsuit,” she responded. “I can’t tell you anything.” After a few minutes of anxious questions, the administrators allowed her to go back to work.

Later that day, Ms. P’s lawyer reported that a federal judge had certified the suit as a class action, thus confirming its scope and raising the stakes from a few thousand dollars for Ms. P alone to several million dollars for all the employees, plus whatever penalties the judge might see fit to add.

Within a few weeks, the HMO lawyers apparently regrouped and settled on a legal strategy. They filed a motion to dismiss, arguing that the PAs and NPs were “medical professionals” who were exempt from overtime rules. Ms. P’s lawyer had been expecting this and was ready with an answering brief explaining why the clinicians were entitled to overtime pay. A hearing was scheduled. Ms. P had been told she didn’t need to attend, but curiosity and the fortunate coincidence of a day off brought her to the federal courthouse for the hearing.

The crux of the matter was whether the exclusion from overtime rates in the Fair Labor Standards Act for “the traditional professions of law, medicine, and teaching” applied to PAs and NPs. The lawyers presented their verbal arguments and handed their written briefs to the judge. He accepted them with apparent ill humor — an expression like “more homework!” flitted across his face — and the hearing was quickly over.

“What now?” Ms. P asked her lawyer. “We wait…wait for the judge,” he replied. But the judge didn’t make them wait long. He upheld the Department of Labor memorandum supporting Ms. P’s claim for overtime. The case soon settled for $3 million. Ms. P collected $20,000 in back pay and damages. The lawyer collected $1.2 million, an amount approved by the judge.

Legal background

Class-action suits are increasingly common as legal fees rise. Lawyers who represent individuals often require them to pay up-front, but class-action lawyers are paid from the settlement money or jury award. These suits can be started by one or two individuals who must typify the group they claim to represent.

If the court rules that the class designation is legitimate, the ultimate verdict applies to all members of the group, unless they choose to “opt out” and bring their own lawsuits individually. Class-action suits have been brought on behalf of airline customers, insurance-policy holders, and consumers seeking compensation for faulty products.

The strategy was gaining momentum until one of the nation’s most prolific class-action lawyers was indicted for bribing plaintiffs to bring lawsuits against U.S. corporations. Many recent suits have been derided as “manufactured,” in the sense that they originated with lawyers rather than with the aggrieved individuals, as was the case with Ms. P. Nevertheless, class action remains a popular and effective way for the person with a legitimate grievance and limited means to seek redress in the courts.

Protecting yourself

If you have an employment problem, approaching your employer is the logical first step you should take, but it can be difficult to do without appearing to be a troublemaker. Whom you choose to approach, and when, can determine your success or failure.

When an issue affects all employees (such as pay or working conditions), rather than being an interpersonal dispute, you need an advocate at the highest level of the organization who is willing to risk some political capital to have it favorably resolved. If such direct negotiations fail and no union is involved, the next step is to decide whether to consult an employment lawyer.

A good lawyer will see litigation as a last resort. Employment disputes are most efficiently dealt with by arbitration set up through the state department of labor. Most states have such programs, and some even provide the arbitrator.