Posts Tagged ‘litigation’

How Facebook Affected Consumer Behavior

August 17, 2009

On February 16, 2009 Facebook users, journalists, and members of other social media websites were alarmed when Facebook released its new Terms of Service (TOS) policy.

Unlike the former policy, the new TOS stated that:

“You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof.” (Walters, 2009).

This new policy allowed Facebook to profit from user information, by selling such details to third-parties. From a consumer privacy standpoint, it is easy to understand why the new TOS proved to be controversial. Some users – despite all warnings – post their addresses, phone numbers, and email addresses on Facebook. With the new TOS, Facebook could sell a user’s phone number and assigned metropolitan area to a third-party advertiser that had intentions to market local services to the user.

Through this new TOS policy Facebook created a footnote in consumer history. Facebook has 250 million members (Press Room, 2009). New consumer advocacy groups formed to protest the policy, even creating pages on Facebook itself. The groups gained momentum with individual users. In viral-marketing style, users began to share information about the new TOS with other users, who then became “fans” of the consumer advocacy groups. With a potential reach of 250 million members, the outcry against the TOS became unmanageable for Facebook. As a result, after three short days of backlash, the corporation decided to revert to the old Terms of Service policy as they work towards creating a new TOS that addresses user concerns (Boutin, 2009).

Never before has a social networking site been the recipient of such consumer ire on such a massive scale. Facebook users found a consumer cause and channeled the social networking site to spread information. With this campaign’s quick success, consumers learned that they can use the web to protest against corporate iniquities.

Another notable idea is that web-users may have enough wariness of third-party advertisers that they are absolutely unwilling to knowingly participate in any activity on the web that would relinquish private details. Third-party advertisers have been operating on the web for years, gathering information about users in order to develop demographic-specific advertisements. However, according to the response towards the Facebook TOS, we can determine that consumers may be tired of these perceived invasions of privacy. As a result, third-party advertising may have lost a major public relations battle.

 

References

Walters, Chris, 2009. Facebook’s New Terms of Service: “We Can Do Anything We Want With Your Content. Forever.” The Consumerist Online. [Internet]. 15 Feb 09. Available at: http://consumerist.com/5150175/facebooks-new-terms-of-service-we-can-do-anything-we-want-with-your-content-forever [Accessed 16 Aug 2009]

Press Room, 2009. Statistics.[Online] Available at http://www.facebook.com/press/info.php?statistics [Accessed 16 Aug 2009]

 Boutin, Paul, 2009. Facebook reverts to old terms, promises to craft new TOS with user input. The Industry Standard Online [internet] 18 Feb 2009. Available at: http://www.thestandard.com/news/2009/02/18/facebook-caves-members-terms-service [Accessed 16 Aug 2009].

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Christopher K. Gridley v. State Farm: Unfair Titling Practices (2004)

August 16, 2009

The case stemmed from Gridley’s purchase of a four-door, 1998 Volvo S70, with a clean title, at an auction in November 1999. Five months after the sale, a mechanic discovered that the Volvo had been seriously damaged in a major accident prior to Gridley’s purchase, and stated the auto had been “improperly rebuilt”.

Christopher K. Gridley of Denham Springs, Louisiana, filed suit against State Farm in June, 2000. According to the lawsuit, State Farm declared the car totaled a month prior to Gridley’s purchase, but the company failed to obtain a salvage title.

According to information gathered, Gridley’s Louisiana Counsel discovered that similar claims against State Farm and other insurers had been filed elsewhere, forming the basis of a potential class action. The St. Louis firm of Korein & Tillery were brought in as part of Gridley’s Counsel, and the case was filed in Madison County Illinois’ Third Circuit District Court. (Korein & Tillery are among the most infamous class action plaintiff firms, having won the $10.1 billion dollar judgment against Philip Morris in Illinois. Madison County, Illinois consistently ranks at the top of the American Tort Reform Association’s annual “Judicial Hellhole” list for the size of judgments rendered and, in some cases, the apparent lack of forum connection to Madison County.)

The Gridley suit became significant for reasons other than State Farm’s titling practices. National backers of tort reform have consistently attacked Illinois Courts for their outrageous Plaintiff awards. The Plaintiff’s Bar has developed a huge industry of bringing Class Action suits to these courts, and are widely accused of court “venue shopping”. Gridley, a citizen of Louisiana, attempted to demonstrate that State Farm’s significant presence in Illinois supported his choice of geographic venue. The Illinois case went back and forth through the appellate process, with one court supporting Gridley’s choice of venue, another denying the Illinois forum.

The insurance industry, along with the U.S. Chamber of Commerce, tort reform lobbyists, and corporations previously hit by Illinois judgments have jumped in to the fray in support of State Farm. Numerous, extensive amicus curiae (friend-of-the-court) briefs were filed for Gridley  when it reached the Illinois Supreme Court, harshly criticizing the case as representative of national tort abuse. “The watchers of the case and the filers of the briefs hope that the court in the course of ruling affirmatively on the change of venue will formulate rules that “will put the brakes on” what they call Madison County’s ‘litigation industry’”.

The Gridley case is on the Illinois Supreme Court’s “Advisement Docket” for their January Term, 2005. It is unknown when this case will be heard again.

The Organizational and Societal Functions of PR

August 16, 2009

In 1906, Upton Sinclair’s novel “The Jungle” shook Americans into fervor about their food. The book described the nauseating practices that were commonplace in Chicago’s meatpacking industry, and revealed a picture of where our meat comes from and what happens to it after slaughter and prior to packaging. As a result of the novel, President Theodore Roosevelt passed several food safety laws, one of which established the Food & Drug Administration (FDA). Since then, Americans may have felt that their food was now being safely prepared and packaged due to government oversight.Americans are wrong, and have many reasons to be concerned about the foods they consume. (Blackwell, J.; n.d.)

In the following discussion, we will analyze the importance of organizational public relations in the context of recent restaurant food poisoning outbreaks. Further, this author will discuss the societal implications of “Food Poisoning PR”, and elaborate how PR can be an effective tool to mislead the public.

“Three Washington children died and 600 others were sickened due to poisoning from E. coli 0157:H7 served in undercooked Jack In The Box hamburgers.” (Porterfield, E. & Berliant, A.; Jun. 1995. Pg. 1 ¶ 2).

While the 1993 Jack In The Box food poisoning scandal certainly gained notoriety among Americans, many other food poisoning incidences have occurred since. Several years ago, green onions from a particular produce farm were also tainted with E.coli, and the vegetable was pulled from the shelves at groceries and removed from Taco Bell products nationwide.

When prepared foods are the cause of illness or death, and a restaurant is targeted as the origin point of these tainted products, the public begins to fear food. According to Maslov’s hierarchy of needs, being safe and fed are our very basic, primal desires. When our food can kill or injure us, and when we question our ability to make safe choices among food products, this infringes upon our needs for survival. It is safe to say, from a psychological standpoint, that the public has every right to become inflamed, afraid, and angry when we discover our food choices aren’t guaranteed to provide us with basic sustenance.

In the event of a food poisoning scandal, public relations becomes an essential ingredient to maintain a restaurant’s ability to remain in business. As a result of the Jack-In-The-Box E.coli incident, many potential franchisees are still wary of opening up a unit in particular regions of the country – they recognize that the food poisoning outbreak is still recalled by fast food consumers in those areas, who refuse to purchase quick service food items from a Jack-In-The-Box store.

 Jack-In-The-Box had little to base a positive PR campaign upon, however. According to the resulting litigation documented in the The News Tribune, a Tacoma, Washington newspaper, the corporation’s business practices actually contributed to the festering of E. coli in the hamburger meat. The company believed that cooking beef to the recommended 155°F temperature made the meat hard, and often encouraged stores to cook their beef at lower temperatures. (Porterfield, E. & Berliant, A.; Jun. 1995) 

Jack-In-The-Box obviously did not have a talented PR staff to handle the food poisoning scandal, or the company would be more successful and wouldn’t have had so many locations close. During a tragic event such as a food poisoning scare, an effective PR team can assure the public that the company is doing everything possible to locate the cause of the problem; that the company will jointly work with food safety specialists to revise their operations guidelines; that the company will create an extensive employee training program for food safety; and that the company is working diligently to ensure that a food poisoning occurrence is never possible in the future as the company stands for highest-quality foods. 

While this type of PR would have been incredibly effective for the Jack-In-The-Box organization, the PR also has significant societal implications. While a corporation can revise its food preparation guidelines, and tell the public that they are creating a stringent food safety training program for their employees, it seems impossible to avoid food poisoning occurrences. Too many variables are involved in prepared food: its production, its transport, its storage, its preparation, and its packaging.

According to a report issued by the Centers for Disease Control (CDC) in 1999, 76 million Americans contract food poisoning each year. This huge statistic presents the conclusion that while the United States may be one of the World’s superpowers, we can’t effectively control the danger imposed by the food we eat. (Stout, D.; Sep.1999).

From a societal standpoint, it seems almost hazardous for a company to promise they will be able to control future food poisoning epidemics. This PR creates the illusion that corporations and the government are actively involved in efforts to make our food safer, and that these efforts are successful.

Resources

 Blackwell, J. (n.d.). “1906: Rumble over ‘The Jungle’. The Trentonian. Retrieved online August 18, 2007 from http://www.capitalcentury.com/1906.html

OutBreak, Inc. (2005). “Jack In The Box E-Coli Litigation”. Retrieved online August 18, 2007 from http://www.about-ecoli.com/news/jack-in-the-box.htm.

Porterfield, E. & Berliant, A. (Jun. 1995). “Jack In The Box Ignored Safety Rules”. The News Tribune (Tacoma, WA). Article located online, and retrieved August 18, 2007 from http://www.about-ecoli.com/news/jack-in-the-box3.htm.

Stout, D. (Sep.1999). “Study Puts U.S. Food-Poisoning Toll at 76 Million Yearly”. The New York Times. Retrieved online August 19, 2007 from http://query.nytimes.com/gst/fullpage.html?sec=health&res=9F00E6DF123CF934A2575AC0A96F958260

Paralegals: FLSA Exemption Applicability

August 15, 2009

Paralegals: FLSA Exemption Applicability

On August 23, 2004, the “white – collar” exemption guidelines under the Fair Labor Standards Act (“FLSA”) were amended for the first time in almost 30 years. Under the FLSA, all workers are entitled to overtime pay. Only employees determined to be exempt under the ‘white-collar’ guidelines may be excluded from non-exempt, hourly compensation procedures. Specifically, the regulations at 29 C.F.R. Part 541 ( “Part 541”) provide exemption from overtime compensation for specific types of executive, professional, or administrative workers ( “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees”, 2004).

The revisions made to the FLSA language were highly anticipated for some time. The job duty requirements needed to satisfy the “exempt employee” definition had not been altered since 1949. The minimum salary required to meet exemption standards had not been updated since 1975. Until the regulations were revised, the theoretical possibility existed that an employee earning only $8,060 per year could have been classified as an executive, and denied overtime compensation (“Defining and Delimiting….”, 2004).

According to several resources utilized, many employers “large and small, public and private – don’t understand how to interpret the exemption regulations under the Fair Labor Standards Act” (Ritter, 2002). One of the benefits provided by the FLSA revision was the amount of open conversation, debate, and contention that occurred as a result of the proposed rulemaking, which spurned immense interest in FLSA compliance (Priest, Coleman; 2004). Many employers, industry groups, and lobbyists answered the proposed regulations with individual legal opinions, either concurring with or arguing against the new Part 541 language. Since the August 2004 enactment, quite a few employment law consultants have held symposiums or seminars, answering questions and concerns about the changes made.

For the purpose of this research, the newfound ability to locate insightful, modern analyses of the FLSA exemption standard has been incredibly useful. “The revisions which became effective on August 23, 2004, sparked a flurry of action in the legal community as employment lawyers across the country scrambled to digest the changes and advise their clients” (Priest, Coleman; 2004). Had the FLSA revisions not occurred, it is questionable whether the dearth of current, critical resources would have been available.

This research provided several conclusions regarding XXXXXX Corporation’s Legal Compliance Department paralegals and their exemption status under the FLSA.  First, these particular paralegal employees are quasi-specialists, and cannot be construed as typical paralegals working in other legal venues. Second, these employees are normally engaged in duties that easily fall under the FLSA’s “white-collar” exemption, specifically under the administrative duties category. Lastly, various types of “Paralegal Specialists” are becoming more commonplace, as employers realize the cost effective benefits of paralegal utilization and engage these employees in tasks that do not require an attorney’s efforts.

“Legal compliance” has increasingly assumed a greater role in traditional business stratagem. In light of some of the more rigorous compliance standards that have been enacted in the past decade, such as the Sarbanes-Oxley Act or the Graham-Bleach-Bliley Act, corporations in the 21st century clearly understand the significance of compliance.

XXXXX Corporation’s Legal Compliance Department has become responsible for a number of specific areas, including forms compliance, DOI regulation, legislative and litigation tracking, and business practice advisement.  Insurance is an exceedingly regulated industry, and the need for an internal department to act as a guide in these areas is crucial.

The Legal Compliance Department’s paralegals are consistently engaged in activities that are not typically part of paralegal practice. Paralegals employed in most corporate legal departments are engaged in the tasks involved with litigation. The Legal Compliance Department has instead served as a type of preventative legal function for XXXXX Corporation. By consistently identifying potential risk, actively learning of new risks for litigation as identified by XXXXX Corporation’s competitors, and by providing counsel for management, the Legal Compliance Department has been at the forefront of reducing the risk of future litigation or regulatory intervention. In this way, the department’s work is much less procedural and finite than the legal work typically part of litigation. Because of this difference, paralegals in the Legal Compliance Department are continuously engaged in work that is more abstract, and as a result, cannot be gauged by a timeline. An example of such work is universal research projects, typically encompassing months of effort. Tasks involved with a typical universal research project include determining the legal viability of a specific business practice, recommending changes to a supervising attorney, and after receiving a supervising attorney’s approval, acting as a contact during the implementation process.

The abstract work performed by the Legal Compliance Department’s paralegals conform to the Department of Wage and Hour’s interpretation of an exempt employee’s work. According to the historical summary of the FLSA, in the revised Part 541, “the type of work they [exempt employees] performed was difficult to standardize to any time frame and could not be easily spread to other workers after 40 hours in a week, making compliance with the overtime provisions difficult and generally precluding the potential job expansion intended by the FLSA’s time-and-a-half overtime premium”( Department of Labor, 2004 ). 

XXXXX Corporation’s paralegal employees serving within this Legal Compliance Department have fulfilled various responsibilities within this preventative compliance process. Examples include the following:

  •    Legal Environment Tracking: Researching current activities and events occurring in the areas of litigation, legislation, and business practices. Identifying appropriate members of the organization to communicate these current trends with, and relaying the continuing stream of information for necessary action. This type of competitive research has prompted increased awareness of current trends on the industry horizon. As a result of such information, necessary changes have been implemented in various company functions.
  • Legal Research: After learning of potential risks, research is conducted internally, often across multiple departments, in order to develop a sound viewpoint regarding XXXX Corporation’s business practices. Case law, statutory law, and competitor’s business practices are identified in order to provide conclusive resolution to the long-standing question: “What is XXXX Corporation’s exposure?” After the research conclusions are summarized, they are reviewed and approved by supervisory attorneys, prior to changes being implemented.
  • Licensing:  Research, preparation, and submission of both new XXXXX Corporation licenses, or updated/renewal licenses. Staying abreast of changes within the business, necessary revisions are identified, and specific procedures are followed for implementation. Often involved in researching XXXXX Corporation licenses for business purposes, such as identifying the appropriate licensed producer for a hybrid business operation, or researching/job costing of licensing vendors in order to obtain new licenses in a more time-efficient manner.

Discretion and Independent Judgement

 In order to qualify for the Part 541 exemption, employees must be further categorized as Professional, Administrative, or Executive employees. In the past, the Department of Labor’s Wage and Hour Division has issued several statement letters regarding paralegal workers. The greatest argument has always been for paralegal exemption under the professional category. Many paralegals feel that their specialized education, training, and job skills provide them with the necessary ammunition to claim exemption as a learned professional. Unfortunately, due to the lack of standardization within the paralegal profession, this attempt to brushstroke paralegal employees into a legal, professional category has not been embraced.

XXXXX Corporation’s Legal Compliance Department Paralegals fall under the administrative category of Part 541. In the past, the Wage & Hour Division has also struck down this possibility for paralegals, by inciting a theorem based on a paralegal’s job duties and the unauthorized practice of law. Specifically, in the Opinion Letter issued by the Division in 1977, it was agreed that a paralegal worker could not receive exemption, except under the administrative employee capacity. Then, in order to strike down this possibility, the Division issued the following declination:

         “It is our further position that ‘legal assistants’ and ‘paralegals’ generally are not involved in the performance of duties requiring the exercise of discretion and independent judgment of the type required by section 541.2; they are, instead, involved in the use of skills rather than discretion and independent judgment. In our view, such employees generally are found to be highly trained and highly skilled specialists who, as such, would not qualify for the exemption as defined….in Regulations, Part 541.5” (Rodriguez, 2002).

 Unfortunately, each of the Department of Labor’s opinion letters regarding paralegal exemption only considered paralegals working in positions specific to litigation. While considering paralegal employees under the administrative, exempt employee category, the Wage & Hour Division found that “traditional legal assistant duties such as preparing oral presentations or meeting and interviewing clients do not involve the exercise of discretion and independent judgment”(Rodriguez, 2002). In the Department of Labor’s “most recent opinion letters, legal assistant duties such as drafting pleadings, discovery requests and letters to clients, performing legal research, cite-checking briefs, preparing trial material and dealing with clients and witnesses, represent duties that involve the application of skills and knowledge rather than discretion and independent judgment” (Priest, Coleman; 2004).

The DOL’s paralegal decision is not specific to XXXXX Corporation’s Legal Compliance Department Paralegals. Only one of the job duties above – “performing legal research” – could be attributed to these specific XXXXX Corporation employees. The rest of the tasks are only attributable to paralegal employees either working in the Claims Department or in Litigation.  

The Department of Labor’s interpretation of the FLSA provides that a number of factors must be considered when analyzing an employee’s use of discretion and independent judgment. No criteria have been set for how many of the factors must be utilized to meet exempt status. The factors considered by the DOL include:

  • “Whether the employee has authority to commit the employer in matters that have significant financial impact;
  • Whether the employee has authority to waive or deviate from established policies and procedures without prior approval;
  • Whether the employee performs work that affect business operations to a substantial degree” (Snider, 2004).
  • “Whether the employee has authority to formulate, affect, interpret or implement management policies or operating practices;
  • Whether the employee carries out major assignments in conducting the operations of business;
  • Whether the employee has authority to negotiate/bind the company on significant matters;
  • Whether the employee provides consultation or expert advice to management;
  • Whether the employee represents the company in handling/ resolving grievances or in arbitrations”(Borgen, 2004).

XXXXX Corporation’s paralegal employees in the Legal Compliance Department arguably do not participate in a number of the above scenarios. However, tasks performed by Legal Compliance paralegals do fall into several of the categories above – “whether the employee performs work that affects business operations to a substantial degree”(Snider, 2004); “whether the employee has authority to formulate, affect, interpret or implement management policies or operating practices”; “whether the employee carries out major assignments in conducting the operations of business”; and “whether the employee provides consultation or expert advice to management”(Borgen, 2004). Examples of tasks that fell into one of the above referenced categories include:

  •   Fair Credit Reporting Act (FCRA) case law research: Research of recent case law  against XXXXX Corporation competitor. Located specific market/business practice issues called into question by the court. Identified similar issues with XXXX Corporation practices/forms. Submitted findings/recommendations to supervising attorney, who then led effort to implement internal changes based on research conducted.

 

  •   Spanish Forms Translation:  Research of applicable state statutes and case law,  supporting supposition that legal conflicts may exist with consumer forms translation. Research of XXXXX Corporation’s competitor experiences with translating consumer forms. Identified necessary components of a reputable translation service. Submitted findings/recommendations to supervising attorney. Upon review, supervising attorney counseled the organized business team on conclusions of law.

 

  • XXXXX Corporation competitor’s financial reports:  Upon filing of SEC financial statements, either year-end reports or quarterly statements, review is made of  competitors’ documents. Research, composed of competitor’s reported legal issues, is compiled and compared to previous compilations. New issues are identified, and the natural progression of competitor’s cases and regulatory proceedings are also noted. Findings are submitted to supervising attorneys, noting new elements of risk in the litigation environment. Potential future issues requiring compliance scrutiny are also identified.

Reich v. Page & Addison LLC

The Department of Labor suffered a huge blow to their opinion on administratively exempt paralegals in 1994. In Reich v. Page & Addison, the Department of Labor used their limited resources to prosecute in their attempt to allege that Page & Addison, LLC, had improperly designated their paralegal employees exempt. “The Department of Labor slapped a federal lawsuit on the firm – an action only infrequently taken due to financial constraints. But it’s safe to say, when the Department of Labor does take the time and expense of going to court, one of it’s primary intentions is to broadcast a message to the rest of the industry in question”(Ritter, 2002).  A Dallas jury in the United States District Court in the Northern District of Texas agreed with the law firm, and found the paralegals in question to be exempt. All of the Page & Addison, LLP paralegals were found to exercise independent judgment and discretion when they performed their duties and fulfilled their responsibilities, even though a supervisory attorney must approve or reject the paralegals’ work. “A key to the successful defense was the virtually unanimous support the firm received from its legal assistants who resented the department’s attempts to characterize them as (in their own words) ‘glorified secretaries’ (Priest, Coleman; 2004). Another article summarizing the activity behind Reich v. Page & Addison described the Deparment of Labor’s loss as follows:

Smarting from that decision, the government appealed to the 5th U.S. District Court of Appeals; then, six months later, the Department of Labor did something that remains a mystery to this day, it dropped the appeal. Why? Did the Department of Labor’s move signal an abandonment of its long-standing position that the majority of legal assistants must be paid overtime? No one at the Department of Labor was willing to go on the record about the dropped appeal, except to say that nothing in the agency’s decision should suggest a change of heart. And, in fact, the labor department continues to pump out administrative rulings, some stating paralegals generally don’t qualify for any of FLSA’s exemptions”(Ritter, 2002).

Since the Page & Addison decision, each opinion issued by the DOL regarding the issue has only focused on paralegals’ inability to claim status under the professional exemption. In regards to the administrative exemption, the DOL will only state that paralegals “are generally” not exempt. 

Attorney Supervision

The Department of Labor had previously asserted that American Bar Association standards regarding the unauthorized practice of law restricted a paralegal’s ability to claim exemption under Part 541. In their belief, a paralegal, by definition an employee under the supervision of an attorney, could not exercise the amount of independent judgment and discretion required of an administratively exempt employee.

           “Delegating legal tasks to a lay person is proper ‘only if  the lawyer maintains a direct relationship with the client, supervises the delegated work and has complete professional responsibility for the work produced. The implication of such strictures is that [a legal assistant] would probably not have the amount of authority to exercise independent judgments with regard to legal matters necessary to bring them within the administrative exemption’”(Rodriguez, 2002).

This seems to be the strongest argument against paralegal exemption. Following this theory, the amount of supervision required by an attorney negates any possibility that the decisions made by paralegals require enough discretion and independent judgment. Unfortunately, this argument fails on several grounds. 

First, the amended FLSA “white-collar” exemption standards now allow an administratively exempt employee to be supervised. “The regulations state that exercise of judgment/discretion is not negated by the fact that the employee’s decision making may not be final or unlimited. Some review by higher authority may be tolerated, even if decisions are ‘upon occasion’ revised or reversed after review”(Borgen, 2004).

As the FLSA seems to allow administratively exempt employees to make decisions under the general guidance of a superior, the real question lies in the degree of supervision that an attorney is required to give while overseeing a paralegal’s work product. A recent Oklahoma Bar Journal article supports the theory that an attorney can exercise enough diligence in their supervision of non-attorneys, that those non-attorneys may still exercise enough discretion and independent judgment to claim exemption status:

    “ The revised administrative exemption also relaxes the earlier requirement that employee decisions be free from  immediate supervision. It indicates that employees can  exercise discretion and independent judgment even when their decisions are reviewed at a higher level. Accordingly, legal assistants could exercise the requisite discretion and independent judgment even where their decisions are reviewed by supervising lawyers, as they must be under the Rules of Professional Conduct. Legal assistants were found to utilize discretion and independent judgment in Reich. There, the jury found that legal assistants exercised the requisite discretion and judgment to qualify as exempt”(Priest, Coleman; 2004).  

In fact, the general supervision required of an attorney, by law, does not seem to override the assertions made by many employers, that their paralegal employees exercise enough discretion and independent judgment to render them exempt. According to NFPA’s (National Federation of Paralegal Associations) 1999 Report, the industry is nearly equally divided on the exempt vs. non-exempt question. In the corporate legal environment, the proportion of exempt v. non-exempt paralegal employees is very different. “Almost three-quarters (73.3%) of for-profit corporations consider paralegals exempt; a quarter (25.2%) pay them overtime, and 1.5% responded “other” or didn’t reply” (Martin-Bowen, n.d.).

The American Bar Association has issued statements supporting the preposition that a paralegal’s work is substantive in nature. The following definition of paralegals and legal assistants was issued within the ABA’s Standing Committee on Legal Assistants’ position paper on the “Question of Legal Assistant Licensure or Certification”:

           “[A] person, qualified through education, training, or work experience, who is employed or retained by a lawyer, law office, governmental agency, or other entity in a capacity or function which involves the performance, under the ultimate direction and supervision of an attorney, of specifically-delegated substantive legal work, which work, for the most part, requires a sufficient knowledge of legal concepts that, absent such assistant, the attorney would perform the task”(Meckler, B.R., Leigh, M.; 2004).

This ABA opinion, reflecting on the substantive nature of paralegal work, is also upheld in case law.  In Missouri v. Jenkins (491 U.S. 274 (1989))¹, the U.S. Supreme Court upheld an award of attorney fees that included a stipend for paralegal time at “market rate”. Ever since this formulative case decision, the law has been consistently questioned about this decision. Specific to this research is the question, “What types of tasks can a paralegal be compensated for, through court-awarded attorney’s fees?”

              “Parties have debated whether the time reported by paralegals is non-reimbursable clerical time. In determining whether paralegal time reimbursable, the court in In re CF&I Fabricators of Utah, Inc.², referred to the definitions of a paralegal provided by the American Bar Association Standing Committee on Legal Assistants and the National Association of Legal Assistants, which provided that paralegal work is substantive legal work that is performed under the supervision of an attorney. In In re Busy Beaver Bldg. Ctrs., Inc.³, the court held that paralegals were to be compensated for tasks ‘involving the exercise, or potential exercise, of some paraprofessional judgment.’ However, it considered services not requiring the exercise of professional legal judgment to be non-reimbursable as clerical expenses in overhead”(Meckler, B.R., Leigh, M., 2004; see also Rodriguez, 2002).

¹ Missouri v. Jenkins by Agyei, 491 U.S. 274, 109 S.Ct. 2463.

   Jun.19, 1989 (Approx. 13 pages).

² In re CF & I Fabricators of Utah, Inc., 131 B.R. 474
   Sep 18, 1991 (Approx. 27 pages)

³ In re Busy Beaver Bldg. Centers, Inc. , 19 F.3d 833
  Mar 11, 1994 (Approx. 29 pages)

Clearly both the court and the ABA seem to rigorously defend paralegal duties in the legal environment. The ABA defines paralegal work as tasks of substantive legal involvement that would normally be accomplished by an attorney.

Case law supports the award of paralegal fees as part of attorneys’ fees, and states that only tasks requiring “paraprofessional judgment” can be reimbursed. Clerical tasks cannot be reimbursed through such award.

In the National Association of Legal Assistants’ (NALA) Corporate Human Resources Guide To The Legal Assistant/Paralegal Profession”, an extremely concise depiction of corporate paralegals is given. This description not only explains the ABA opinion of paralegals, but also expresses the intentions of illustrated case law. For the audience of Human Resources professionals, NALA also offers explanations about the typical utilization of paralegals in a corporate environment, and the cost-effectiveness of doing so. The most specific language used in the NALA guide is the depiction of attorney  supervision of paralegal employees. Please see the excerpt from NALA’s Corporate Human Resources Guide below:

                “Over the past 25 years other associations, for instance, the American Bar Association, have developed their own definitions of “legal assistant/paralegal” and much has been written as to what duties are appropriately delegated to legal assistants. All agree that legal assistants/paralegals perform work which is of a substantive nature, requiring education, knowledge and expertise, distinguishing it from that which is clerical or rote. Case law relating to legal fees has been consistent in requiring that the task performed by the legal assistant be that which an attorney would do if the legal assistant had not been available—not work traditionally done by secretaries or clerks.

               Legal Assistants do work which requires substantive legal knowledge, creativity in problem solving and independent judgment, but always under the supervision of a lawyer. The nature and amount  of supervision required lies within the lawyer’s discretion. Legal assistants/paralegals cannot ethically set fees, accept or reject clients, represent clients in court, or give legal advice. Yet, legal assistants may, and do, exercise independent judgment within established parameters…

               An in-house legal assistant acquires knowledge that is invaluable to both internal attorneys and outside counsel, which, in turn, allows matters to be handled efficiently and cost effectively. Corporate legal assistants become extremely familiar with the organization of the company, its goals, priorities, and products, and can accumulate, analyze and summarize data and facts from an insider’s perspective. From such insight legal assistants can quickly determine the appropriate persons to contact to obtain specific information, saving time and money when working with outside counsel in preparing and responding to discovery requests in litigation.

             Experienced legal assistants with in-house knowledge work not only in the legal department but are found in a variety of positions throughout a corporation: contract administrator, corporate procurement, patents or corporate secretary to name a few”(National Association of Legal Assistants, 1999).

Conclusion

Paralegal employees are being consistently utilized for various capacities, as employers realize the benefit of a legal background. These legal workers are no longer just attorney support – they are filling positions as management or as consultants in law firms, corporations and government agencies.

Several resources consulted for this research all agree that “paralegals work quite autonomously, exercising a good deal of independent judgment in performing their work. (Cannon, 2002). Although unauthorized practice of law statutes specifically prohibit nonlawyers from appearing in court on behalf of a client, establishing the attorney-client relationship, or from giving legal advice, many tasks can be legally fulfilled by a paralegal employee (Cannon, 2002).

The amount of paralegal supervision required of an attorney depends on the nature of the work assigned, along with the paralegal’s qualifications and skill set. Some paralegals, depending on the field they are involved, are unable to claim exemption under the FLSA due to the ministerial, procedural nature of their work. This is especially true of paralegals involved in litigation. However, paralegals involved in other legal specialties can claim exemption, if their tasks require independent judgment and discretion, and the employee does not require undue supervision by an attorney (Segal, 2004).

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