Supreme Court Rejects Overtime Pay for Drug Reps

Supreme court rejects overtime pay for pharmaceutical salespeople on June 18th, 2012. Find out why at

Drug companies don't have to pay their sales representatives for working overtime hours, ruled the Supreme Court on Monday June 18th. 2012. The court said in a 5-4 opinion that pharmaceutical salespeople, like outside salespeople in other industries, are exempt from federal overtime-pay requirements.

The U.S. Supreme court announced on 28 November 2011 that it would review court ruling that says that pharmaceutical sales representatives can't bill their employers for overtime pay. The case affected the pay of ten of thousands of people. A lower court ruled that the sales reps are not entitled to overtime pay because they fall under the outside-salesman exception to overtime pay requirements of the Fair Labor Standards Act (FLSA).

The case was brought by two former sales reps of GlaxoSmithKline (GSK) who are seeking premium overtime pay on behalf of a nationwide class of U.S. sales representatives employed by the London based drug company. In their petition the plaintiffs argued that pharmaceutical-sales reps promote products, rather than sell them, and therefore are not salespeople and should be covered by the FLSA.

The Supreme Court dismissed the argument as "quite unpersuasive" saying drug representatives effectively function as salespeople "in the unique regulatory environment within which pharmaceutical companies must operate." In general the representatives encourage doctors to prescribe a medicine and the actual purchase takes place at a pharmacy or elsewhere.

The case is Christopher v. SmithKline Beecham, 11-204. The decision is expected by the end of June.

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