2nd Circuit rules on FLSA 'professional exemption' for consulting nurse

The Fair Labor Standards Act (FLSA) provides some narrow exemptions that keep employers from paying overtime to certain employees who work more than 40 hours per week, including work in a bona fide "executive, administrative, or professional capacity." Although registered nurses (RNs) working in a clinical setting are normally considered exempt professionals, what about an RN who works in a nonclinical setting but still in health care? The U.S. 2nd Circuit Court of Appeals (whose decisions apply to all Connecticut and Vermont employers) recently held nonclinical RNs are professionals, too.

Background

RN Sharon Isett worked in Aetna Life Insurance Company's national clinical appeals unit as an appeals nurse consultant. She reviewed insurance coverage denials of medical services, determined whether services were medically necessary, and approved medically necessary claims without further review by a physician.

Isett sued Aetna, claiming—based on her review duties—she wasn't a salaried exempt professional and was therefore entitled to overtime. The district court in Connecticut held she was exempt, and she appealed to the 2nd Circuit.

Exempt professional test

Exempt employees include "any employee employed in a bona fide executive, administrative, or professional capacity." An exempt professional must satisfy the three-part "primary duty test" by showing that (1) the work requires "advanced knowledge" (2) "in a field of science or learning" (3) "customarily acquired by a prolonged course of specialized intellectual instruction."