I love it when the employer wins an exemption case because the deck is so often stacked against the employer on these kinds of cases. This is especially so when the action is a collective one under the FLSA. In this instance, a RN who was employed as a health insurance claims consultant was found to be exempt as a professional employee because she utilized her specialized knowledge when she performed her duties, even though they were not hands-on patient care. The case is entitled Isett et al. v. Aetna Life Insurance Company and issued from the US Court of Appeals for the Second Circuit.

The appellate panel affirmed the decision below, where the employer had won summary judgment. This employee did not work with patients or perform clinical duties. Her function was to analyze claims submitted to determine if the procedures performed were medically necessary. If they were, she approved the coverage, but if she thought they should be denied, she denied them. The Second Circuit acknowledged that this analysis was different because the worker was not functioning in the typical nursing environment.

The Court stated the issue: “We address the applicability of the FLSA’s professional exemption to an employee who acts in a manner consistent with the central characteristics of the profession at issue but does so outside of that profession’s traditional employment setting.” The Court then concluded that the professional exemption applied.

The employee conducted what were known as “utilization reviews,” where she scrutinized patient appeals of their insurance claims which had already been denied within the Company. She worked without hardly any supervision. There were more than twenty (20) other Nurse Consultants who had opted into the suit and their claims were dismissed as well.

The appellate Court concluded that the professional exemption, which requires “specialized intellectual instruction” in a field of “science or learning” applied because the named plaintiff used that specialized knowledge as a RN in conducting these reviews. The Court noted her limited supervision as well. The Court stated that her primary duty “as a nurse consultant requires the discretion and judgment characteristic of registered nursing — the ability to act independently, or under limited supervision, on the basis of collected clinical data. Accordingly, we conclude that Isett’s job required the use of advanced knowledge, thereby satisfying the first prong of the primary duty test.” The panel also concluded that the employee’s advanced knowledge that allowed her to make these determinations was at “the core of the specialized training that registered nurses receive before entering their profession.”

The Takeaway

This is the best kind of victory for an employer because the exemption is a magic bullet that eliminates every potential plaintiff in one fell swoop. There is, in this regard, no need for the employer to start mounting the “too much individual scrutiny needed” defense. It is also an object lesson for employers to be aware of a potential exemption defense.

And, know this, they may not always be readily apparent…

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