The Supreme Court denied pharma sales reps their overtime. But it may have saved many of their jobs--not to mention their bonuses, industry recruiters say. If the ruling had gone in the reps' favor, drugmakers would have been on the hook for billions in back pay--and that outlay could have triggered another round of salesforce layoffs, Dow Jones reports.
The ruling came in GlaxoSmithKline's ($GSK) overtime case, and it likely saved the company hundreds of millions, if not billions. Other companies with pending suits would have faced similar liabilities. Plus, the ruling would have inspired other reps to sue their companies for back pay. Voilá, billions in immediate costs.
"It would have vastly accelerated the [job-cutting] trend," Cornerstone Search Group's Steven Raz told the news service.
Apex Executive Recruiting said that companies would have had to look at cutbacks, but they also may have changed their compensation plans. Drugmakers might have ratcheted back performance-based pay and ordered employees to keep their work weeks to 40 hours. That might please clock-watchers, but top-earning reps would have suffered, Apex's Mark Cannistraro said.
- read the Dow Jones piece