Supreme Court Rules on Drug Company Sales Reps

The U.S. Supreme Court has issued a ruling regarding overtime pay, determining that drug company sales representatives are not entitled to overtime pay under the Fair Labor Standards Act. The Court ruled 5-4 that these sales reps fall under the “outside salesmen” exemption of the FLSA. According to Forbes, the Obama administration and the U.S. Department of Labor (DOL) argued that the 90,000 drug reps around the country were equivalent to hourly workers on an assembly line.

The decision was triggered when two former GlaxoSmithKline sales representatives filed a class action lawsuit alleging that they were wrongly withheld compensation for hours they worked outside of the normal workday. These two employees maintained that sales reps should be classified as marketers or promoters instead of sales reps, since they actually do not make any sales. This would release them from the “outside sales” exemption of the FLSA and would entitle them to overtime compensation.

Although in this situation the employees were determined to not be entitled to overtime pay, this case highlights the confusion and contention surrounding the distinction of an employee as “exempt” or “nonexempt.” The FLSA requires employers to pay overtime pay of one-and-one-half times the regular rate of pay for every hour worked over 40 in a single workweek. Under the FLSA, some employees can be labeled as “exempt.” If an employee fulfills certain criteria, he or she may be ineligible for overtime pay and other benefits. There are many specified exemptions, including executives and administrators, farmworkers, outside sales, employees in a seasonal recreational establishment, babysitters, certain domestic service employees, and now pharmaceutical sales representatives.

Many workers around the United States are classified as exempt, but many of these are targeted for this distinction unfairly. If you or someone you know may be being treated unfairly by an employer, you may be entitled to legal recourse in the form of an overtime lawsuit. To learn about your legal options, fill out the free case review form on the right.