The sales-rep overtime fight is spreading. Four LEO Pharma salespeople have filed a putative class action, alleging they're owed overtime under U.S. wage-and-hour laws. The reps accuse LEO of misclassifying them as exempt from overtime, even though their duties include non-exempt activities, the law firm Sanford Wittels & Heisler said in a press release announcing the suit.
If Sanford Wittels sounds familiar, then you've probably been following the overtime issue. The firm represented the Novartis ($NVS) reps who won their wage-and-hour lawsuit; the company recently agreed to pay $99 million to settle the dispute. So, the overarching arguments should also be familiar: Reps maintain they don't qualify as outside salespeople because they don't close sales, and they have too little autonomy to qualify for the management exemption.
The LEO suit aims to represent salespeople who work for--or used to work for--the company from Feb. 7, 2009, to the present. It's unclear just how many people might qualify, but as Business Insurance reports, LEO has said it has added 151 employees to its nationwide salesforce since opening its U.S. headquarters in late 2009. The company is the U.S. subsidiary of Denmark's LEO Pharma A/S.
"Leo Pharma has not made a good faith effort to comply with Fair Labor Standards Act or with the comparable state laws that protect workers' rights," Jeremy Heisler said in a statement. "In today's depressed economic climate, this is not only illegal, but unconscionable."
The reality is not so cut-and-dried, if LEO's case is anything like the other pharma overtime suits. Not only is each company's handling of its reps open to interpretation, but the law is as well. In fact, two federal circuit courts have come up with diametrically opposed rulings on the subject. Some reps have won their cases; some have lost. But one OT case is now on its way to the Supreme Court, so we should soon have a ruling to clarify matters.
- see the Sanford Wittels release
- get more from Business Insurance