On June 15, 2011, the Ninth Circuit issued its long-awaited decision in Campbell v. PricewaterhouseCoopers, LLP, No. 09-16370 (June 15, 2011). In its ruling, the Ninth Circuit reversed the district court’s holding that unlicensed junior accountants could never meet the professional or administrative exemptions under California law, concluding that there is a triable issue of fact as to both exemptions.

In Campbell, over two thousand unlicensed junior accountants brought suit against their employer, arguing that they were misclassified as exempt and owed additional compensation for their overtime hours worked. The district court agreed, and held that unlicensed accountants could categorically never qualify for the Industrial Welfare Commission’s (“IWC”) professional or administrative exemptions. Analyzing the professional exemption first, the district court held that these PwC employees were ineligible for the exemption as a matter of law, because they were not licensed Certified Public Accountants. As to the administrative exemption, the district court held that, because the unlicensed accountants were required by law to work under the supervision of a licensed accountant, they could never meet the requirement that they work under only “general supervision” to be classified as an exempt administrative employee.

The Ninth Circuit disagreed. Warning of the potentially extreme implications of categorically excluding entire classes of employees from the exemption analyses, the Court instead held that each employee’s duties and responsibilities must be measured against the exemptions’ requirements to determine whether each exemption applies.