The contradictory court rulings on pharma rep overtime pay continue. As Pharmalot reports, a federal appeals court upheld a lower-court ruling that declared two GlaxoSmithKline sales people exempt from overtime-pay rules. The decision not only contradicts a U.S. Labor Department brief filed in support of pharma-rep OT pay, but runs counter to another federal appeals court ruling, which declared Novartis reps entitled to overtime.
It's a thorny issue. The fight hinges on language in the Fair Labor Standards Act that defines the role of an "outside salesperson," who by definition isn't eligible for overtime. The new ruling, from the Ninth Circuit, states that pharma reps qualify as outside salespeople, even though they don't technically close sales.
They're motivated by commissions, for one thing. For another, rules prohibit them from actually closing sales, they can get doctors to promise to prescribe more--and they're often paid more to do so. Plus, their jobs give them autonomy and freedom to work outside the office. "The pharmaceutical industry's representatives ... share many more similarities than differences with their colleagues in other sales fields," the court ruling states, "and we hold that they are exempt from the FLSA overtime-pay requirement."
Of course, the Second Circuit's ruling in the Novartis case disagrees. And lower courts have come down on both sides of the issue. Will the U.S. Supreme Court end up determining whether pharma salespeople get overtime? If the reps fighting for OT--or the companies fighting against it--want to push the issue far enough, then probably so.
- read the Pharmalot post