In Isett v. Aetna Life Insurance, No. 18-3271 (2d Cir. Jan. 14, 2020), the U.S. Court of Appeals for the Second Circuit clarified the standard for determining whether an employee utilizes “advanced knowledge” necessary to qualify for the “learned professional” exemption to the Fair Labor Standards Act’s (FLSA) overtime-compensation mandate. In an opinion written by Circuit Judge José A. Cabranes and joined by Circuit Judge Reena A. Raggi and District Judge Edward R. Korman, sitting by designation from the Eastern District of New York, the Second Circuit ruled that an employee uses “advanced knowledge” if her “primary” duties require the exercise of discretion and judgment characteristic of her profession. The court applied this two-step inquiry for the first time in the context of 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.

Background and District Court Proceedings      

Sharon Isett, a registered nurse, worked for Aetna Life Insurance Company for five years as an appeals nurse consultant. In her role, Isett was tasked with reviewing insured patients’ clinical files and analyzing whether, under Aetna’s guidelines, requested services were medically necessary requiring Aetna to pay for them. Isett was authorized to make a final affirmative determination of medical necessity, or, instead, to defer to a superior medical director’s judgment. Coverage denials, in contrast, specifically required the medical director’s sign off.

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