Lazaar v. The Anthem Companies

Background

Leslie Lazaar and Donna Tropeano-Tirino are registered nurses who performed utilization review for Anthem. Utilization review involves examining medical records, identifying applicable medical-necessity guidelines, applying those guidelines to the patient’s circumstances, and approving requests or referring unclear or unsupported requests to a physician Medical Director. The nurses could approve requests but could not deny them.

Anthem paid the nurses a salary and classified them as exempt from overtime under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The plaintiffs alleged that their actual work was routine processing that required only limited judgment and did not require the advanced knowledge associated with the professional exemption. They brought claims on behalf of themselves and a proposed collective and class of other Anthem utilization-review nurses.

The parties filed cross-motions for summary judgment. The plaintiffs also sought class certification, while the defendants sought decertification of the conditionally certified FLSA collective.

Professional exemption

The FLSA and NYLL generally require minimum wages and overtime pay but exempt employees who work in certain professional positions. The professional exemption requires both a salary test and a duties test. The parties did not dispute that the plaintiffs satisfied the salary test. The dispute concerned whether their primary duties required advanced knowledge in a field of science or learning, customarily acquired through prolonged specialized instruction.

The court applied the Second Circuit’s decision in a prior related proceeding involving registered nurses performing utilization review. That decision held that registered nurses may satisfy the professional exemption when they use clinical information, act independently or under limited supervision, and exercise the judgment characteristic of registered nursing. The court held that the prior decision controlled despite differences between appeals review and the first-level review performed by the plaintiffs.

Court’s analysis

The court found that the plaintiffs’ work required advanced knowledge because they had to select the correct medical guidelines, examine records that could be hundreds of pages long, interpret technical medical terms, account for individual circumstances such as comorbidities and complications, apply nursing judgment, and decide when a matter required referral to a Medical Director. The court held that detailed procedures, audits, templates, and productivity requirements did not eliminate the professional judgment involved.

The court also held that the required knowledge was customarily acquired through prolonged specialized instruction. The plaintiffs’ nursing education helped them understand medical terminology, interpret clinical information, identify conditions and symptoms, and make deductions from patient records. The court concluded that Anthem’s job training, including several weeks of onboarding, did not provide the breadth of medical knowledge needed for the work.

The court considered evidence that some licensed practical nurses could perform review work and, in some circumstances, approve requests. It concluded that this evidence did not change the result because the record showed that the licensed practical nurses generally handled less complex matters, and the vast majority of the relevant reviewers were registered nurses whose work required specialized nursing education. The court also held that the advanced knowledge was used in a field of science because the reviews required substantial medical knowledge.

Disposition

The court granted the defendants’ motion for summary judgment and denied the plaintiffs’ motion. Because the plaintiffs were properly classified as exempt, the court held that they were not entitled to overtime pay and stated that all claims were dismissed. The motions concerning class certification and decertification were denied as moot. The unopposed motions to seal documents containing sensitive business information were granted, and the court directed the Clerk of Court to close the case.