The Supreme Court Will Decide Whether Pharmaceutical Representatives Are Entitled to Overtime

The Supreme Court Will Decide Whether Pharmaceutical Representatives Are Entitled to Overtime

The Fair Labor Standards Act has governed the provision of minimum wages and overtime pay since the 1930s.  A problematic area remains the “exemptions” to overtime entitlement.  One exemption provides that “outside sales” staff need not be paid overtime pay.  An employee working in an office on the phones is not exempt.  But someone traveling around to make sales or obtaining orders or contracts for services or use of facilities is not entitled to overtime.  Perhaps the original idea was that the outside sales people were motivated by their commissions, not the promise of an hourly wage.

Modern life has led to many hybrid type jobs.  One is the pharmaceutical sales representatives employed by drug companies to introduce physicians to their products.  Sales representatives have urged courts to allow them overtime, on the basis that their work is primarily promotional. The Supreme Court has agreed to address the question: “Whether the Fair Labor Standards Act’s outside sales exemption applies to pharmaceutical sales representatives.”  The case is calledChristopher v. SmithKline Beecham.

The case comes up in the context of a disagreement between Courts of Appeals.  Some agree with the Department of Labor interpretation that pharmaceutical sales representatives are entitled to overtime if they work more than 40 hours in a week.  They are not selling to physicians, they are attempting to influence their patterns of prescription.  The pharmaceutical industry is also interested in a resolution to this issue.

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