Finding a Labor Department interpretation of regulations interpreting the
Fair Labor Standards Act “lacks the hallmarks of thorough consideration,” the
U.S. Supreme Court June 18 held that
pharmaceutical sales representatives who encourage doctors to prescribe the use
of a company's products are “outside salesmen” who are exempt from the overtime
protections of the federal wage and hour law (Christopher v. SmithKline Beecham Corp. d/b/a
GlaxoSmithKline, U.S., No. 11-204, 6/18/12).
Writing for the majority in the 5-4 decision, Justice Samuel A. Alito said
since 2009, DOL has argued in several amicus briefs that pharmaceutical
“detailers” were not FLSA-exempt because they did not make sales to the
physicians they contacted.
However, Alito said DOL's position was “quite unpersuasive” and was not
entitled to judicial deference.
Alito noted that FLSA defines the terms “sale” and “sell” to include an
Labor Secretary Hilda Solis submitted an amicus brief in
August 2010 arguing to the U.S. Court of Appeals for the Ninth Circuit that the
pharmaceutical sales representatives were not “outside sales” employees exempt
from FLSA's overtime requirements (61 BTM 267, 8/24/10). The Ninth Circuit
declined to award deference to the amicus brief filed by the department.
Because the detailers' standard practice of obtaining nonbinding commitments
from physicians “comfortably falls within the catch-all category of 'other
disposition,' ” the majority affirmed the Ninth Circuit's ruling that detailers
could not recover for a failure of SmithKline Beecham Corp., doing business as
GlaxoSmithKline, to pay them overtime compensation.
Chief Justice John G. Roberts and Justices Antonin Scalia, Anthony M.
Kennedy, and Clarence Thomas joined in the majority opinion.
Justice Stephen G. Breyer, joined by Justices Ruth Bader Ginsburg, Sonia
Sotomayor, and Elena Kagan, dissented. Breyer agreed with the majority that the
government's interpretation of the DOL regulations was not entitled to “any
especially favorable weight.”
But the dissent argued that because pharmaceutical detailers are merely
promoting sales made by other individuals, they should not be considered to fall
within FLSA's exemption for outside salesmen.
Full text of the decision is available at http://op.bna.com/dlrcases.nsf/r?Open=ldue-8vdkpg