Sales-rep overtime steps into Supreme Court

The sales-rep overtime debate enters the Supreme Court on Monday. After years of lawsuits alleging that drugmakers violated labor laws by denying reps overtime pay--and years of court rulings both for and against the companies--the top U.S. court will have its chance to grill both sides.

The actual case that comes up for review involves SmithKline Beecham, now GlaxoSmithKline ($GSK). At issue is the "outside sales" exemption in Fair Labor Standards Act. The pharma reps maintain that they're not actually salespeople, because they don't actually close sales. The Department of Labor has weighed in on the reps' side. But GSK says its reps do qualify for the outside salesperson exemption.

The "outside sales" argument, and another involving the "administrative" exemption, have been debated in courts all over the country. Judges have ruled for the companies. They've ruled for the reps. And appeals courts have split on the issue, too.

The Supreme Court could end that split, at least on the outside salesperson side. And if the court upholds the lower court's decision--that GSK reps aren't outside salespeople--that could not only decide the fate of similar cases still pending, but inspire new ones.

- see the Pharmaceutical Commerce piece
- read the Legal Newsline story