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U.S. Supreme Court Hears Oral Argument In Pharma Rep Overtime Case

By Rebecca Hamburg posted 04-18-2012 11:57 AM

On Monday, April 16, 2012, the U.S. Supreme Court heard oral arguments in Christopher v. SmithKline Beecham (Case No. 11-204) on whether pharmaceutical sales representatives (PSRs) should be classified as non-exempt employees. The petitioner-plaintiffs are two among approximately 90,000 PSRs employed within the American pharmaceutical industry who visit physicians’ offices and encourage physicians to prescribe their employer’s products to their patients. Plaintiffs filed suit under the Fair Labor Standards Act (FLSA) seeking overtime pay on behalf of a nationwide class of PSRs employed by respondent-defendant SmithKline Beecham, Corp., d/b/a GlaxoSmithKline. Numerous similar suits have been filed throughout the country by PSRs performing identical business functions for various pharmaceutical companies. Defendant’s motion for summary judgment was granted on the basis that PSRs are outside salespersons who are exempt under the FLSA.

The questions at oral argument indicated that the justices may split in non-ideological, and what some see as unusual, ways. Among the questions for the petitioners' counsel Thomas C. Goldstein was this slightly sardonic one from Justice Ruth Bader Ginsburg: "If you're right, would the time on the golf course get time and a half?" Yet, Chief Justice John Roberts chided SmithKline Beecham's counsel Paul Clement for leaving the actual making of sales off his list of activities performed by the pharmaceutical reps, suggesting that he was skeptical of the company's position. In questioning the U.S. government, which had filed a brief in support of the pharma reps, Justice Elena Kagan stated that she believed the administration's position "seem[ed] a little bit blind to the way this industry really works," because the drug sale "follows from however successful the [pharma rep] is," indicating the rep is furthering the process of an actual sale. Justice Stephen Breyer also worried about the Department of Labor's long-history of not pursuing overtime for these types of workers and now providing what he called a "windfall" to the reps. Later when questioning the respondents, Justice Kagan took a different view of the Department's inaction, when she told Clement: "You've been given a gift for all these years, is one way of looking at it." In the end, it is difficult to predict which way the decision will come out, but one that we eagerly await.

In line with our successful amicus brief in In re Novartis Pharmaceutical Litigation, where the Second Circuit reached the contrary conclusion to the Ninth Circuit in Christopher, NELA, joined by the National Employment Law Project, filed an amicus brief arguing that requiring outside sales people to make actual sales is central to the purpose of the exemption; that to ignore the actual sales requirement would draw the courts in an unwarranted policy-making role; and in the absence of congressional or regulatory action, the court should not dilute or refashion the FLSA’s explicit requirements for one industry. To read NELA’s amicus brief, written by our team of authors from Outten & Golden LLP and Nichols Kaster, PLLP, please click here 

Of note, NELA members Jeremy Heisler, Katherine M. Kimpel, Michael R. Pruitt, and David W. Sanford are also among the attorneys representing the petitioner-plaintiffs before the U.S. Supreme Court. 

#FLSA #DOL #USSupremeCourt #Amicus