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Drug Sales People Don't Get Overtime

From UPI Top Stories (June 18, 2012)

The U.S. Supreme Court ruled 5-4 Monday that pharmaceuticals sales people are not protected by federal overtime law.

The decision came along the court’s ideological fault line, with the five-member conservative bloc forming the majority.

The Fair Labor Standards Act requires employers to pay employees overtime wages, but that protection does not apply to workers employed "in the capacity of outside salesman." Congress left it up to the U.S. Labor Department to define "outside salesman.

Pharmaceutical companies promote their products to physicians through a process called "detailing" -- employees known as "detailers" or "pharmaceutical sales representatives" try to persuade physicians to write prescriptions for the products.

A group of these sales people filed suit against British multinational GlaxoSmithKline in Arizona. The sales force spent about 40 hours a week in the field calling on doctors during normal business hours, but spent an additional 10 to 20 hours a week attending events and performing other tasks. They were not required to report their hours.

They were paid a base salary and incentive pay based on sales. But it "is undisputed that [the sales people] were not paid time-and-a-half wages when they worked more than 40 hours per week," the high court said.

A federal judge agreed with the company, and a federal appeals court agreed, despite a Labor Department brief filed in a similar case supporting overtime pay. The appeals court said the Labor Department’s brief was not entitled to "deference."

The U.S. Supreme Court majority opinion, written by Justice Samuel Alito and joined by his four fellow conservatives, said the plaintiffs "qualify as outside salesmen under the most reasonable interpretation of the [Labor Department] regulations."

Justice Stephen Breyer, joined by his three fellow liberals, dissented.


Posted: June 2012