Don't count pharma out in the sales-rep overtime fight. As Pharmalot reports, a U.S. appeals court has denied overtime for Eli Lilly ($LLY) and Abbott Laboratories ($ABT) sales reps. The reps qualify for the Fair Labor Standards Act's administrative exemption, the Seventh Circuit panel ruled.
The ruling comes as the Supreme Court is reviewing a case hinging on the FSLA's other exemption for outside sales employees. And this is key, because it means the overtime battle could be far from over. The Third Circuit has already ruled similarly, so the Seventh Circuit's decision bolsters pharma's anti-overtime case.
The administrative exemption has been disputed--and courts have ruled on both sides--in multiple cases. The Supreme Court's ruling is due this summer, and it could affect not only the lawsuits now pending, but also potential lawsuits. If the court nixes the outside sales exemption, reps waiting in the wings will sue. If not, well, a lot of lawsuits will die in their tracks.
Or new plaintiffs might resort to the admin exemption instead--while drugmakers, at least those in the Seventh and Third circuits, can take shelter under the two appeals court decisions. The latest ruling offers a blueprint for that shelter: The reps are the "public face of their employer to the most important decisionmaker regarding use of their companies' products," the ruling states (as quoted by Pharmalot). The court also determined that the reps exercise their own discretion in working with doctors--a key point for the FSLA exemption.
- read the Pharmalot post