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Supreme Court denies overtime to certain sales reps

June 28, 2012

Supreme Court agrees with Ninth Circuit that drug company representatives are ‘salesmen’
Ater Wynne LLP
NW Law frim

Last week the Supreme Court affirmed a decision of the Ninth Circuit holding that pharmaceutical sales representatives are not entitled to overtime under the Fair Labor Standards Act because they are covered by the FLSA’s “outside sales” exemption. In Christopher v. SmithKline, the Court issued a 5-4 decision, with the majority reasoning that “[the representatives were] hired for their sales experience. They were trained to close each sales call by obtaining the maximum commitment possible from the physician. They worked away from the office, with minimal supervision, and they were rewarded for their efforts with incentive compensation.”

The dissent agreed with the Obama administration that the “outside sales” exemption does not apply to pharmaceutical sales representatives because the representatives do not actually sell the drugs. Writing for the dissenters, Justice Stephen G. Breyer wrote, “At most [the sales representative] obtains from the doctor a ‘nonbinding commitment’ to advise his patient to take the drug (or perhaps a generic equivalent) as well as to write any necessary prescription.”

See our earlier coverage of Christoper v. SmithKline here.

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