Justices to Consider if Drug Sales Reps Are Covered by Outside Sales Exemption

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By Kevin P. McGowan  

The U.S. Supreme Court Nov. 28 agreed to consider whether the Fair Labor Standards Act's outside sales exemption covers drug sales representatives who visit doctors to encourage them to prescribe their employer's prescription drugs (Christopher v. SmithKlineBeecham Corp. d/b/a GlaxoSmithKline, U.S., No. 11-204, cert. granted11/28/11).

The court will review a February 2011 decision by the U.S. Court of Appeals for the Ninth Circuit, which held that the FLSA's outside sales exemption barred the claims of a proposed class of drug sales representatives for GlaxoSmithKline (635 F.3d 383, 17 WH Cases2d 353 (9th Cir. 2011).

The appeals court declined to defer to the Labor Department's position, stated in an amicus brief, that the exemption did not cover the drug sales representatives because their job was to promote their company's drugs, not to make final sales (61 BTM 267, 8/24/10).

The Second Circuit in July 2010 had reached the opposite conclusion, holding that drug sales representatives for Novartis Pharmaceuticals Corp. and Schering Corp. were not FLSA-exempt and could pursue overtime claims under the federal wage and hour law (611 F.3d 141, 16 WH Cases2d 481 (2d Cir. 2010).

The Supreme Court earlier this year denied Novartis's and Schering's petitions to review the Second Circuit decision.

In their petition for review, two sales representatives urged the Supreme Court to resolve the circuit split on the scope of the FLSA's outside sales exemption. They also urged the justices to address what deference federal courts owe to the secretary of labor's interpretations of the FLSA.

SmithKline did not oppose review, but rather agreed with the petitioners that the Supreme Court should clear up the “confusion and uncertainty” among the lower federal courts on whether the FLSA exemption applies to pharmaceutical sales representatives.

By Kevin P. McGowan