Employment Archive

Thousands may have Claim for Pharmaceutical Sales Rep Overtime

March 2nd, 2011. By LucyC

Well, it looks like the little guys could have it. Yesterday, February 28, 2011, the US Supreme Court announced that it would not reconsider appellate court decisions against Novartis and Merck Schering regarding unpaid overtime class actions.

Essentially, this means that Novartis may have to pony up $100 million or more in back overtime as settlement for some 2,500 plaintiffs. 

In so doing, the Supreme Court leaves intact two separate decisions against Novartis and Schering Corp. In July 2010, the 2nd Circuit issued a pair of rulings that found the pharmaceutical sales reps were covered by federal wage-and-hour law.   

But—it ain’t over as the expression goes—until the fat lady sings. At least half a dozen pharmaceutical companies are tied up in overtime suits, according to various media sources, and yesterday’s US Supreme Court decision presents a major conundrum. According to the attorneys that represented the Novartis employees, the various rulings against the pharmaceutical companies have ‘opened the floodgates for liability.’ This same law firm is currently representing plaintiffs in four identical wage-and-hour lawsuits against Pfizer, Roche, Merck and Abbott Laboratories. So the bigger question is—does this decision translate into overtime requirements for all pharmaceutical sales reps? (Now we’re talking tens of thousands of workers.)

That remains to be seen, in part because the courts themselves are guilty of issuing conflicting information—other appellate court decisions have decided in favor of the employers. The reason? It’s all down to interpretation. A report in the Star-Ledger indicates that this Supreme Court ruling was partly based on a brief from the Department of Labor that supports the sales’ reps stance on qualifying for overtime pay. As far as Novartis is concerned, they intend to evaluate ‘all legal options.’ Part of an email published in the Star-Ledger, from Novartis, states, “For decades, companies in the pharmaceutical industry have classified their sales representatives as exempt employees and have compensated them on a pay-for-performance basis, the same way they compensate executives, managers and other professionals.”

And, in a brief submitted by Merck, the pharmaceutical company reportedly wrote that another appellate court concluded that “no deference was owed to DOL’s new interpretation expressed in its brief.”(Star-Ledger). Of course Merck isn’t too happy about the Supreme Court ruling either. The company inherited an overtime lawsuit against Schering-Plough, when it acquired SP in 2009. 

It doesn’t help that the Supreme Court offered no comment whatsoever on its decision: an explanation making clear their reasons for their decision could have helped in reducing the likelihood of further legal wrangling—which will almost certainly occur because the stakes here are high indeed.   

The Pharmaceutical Research and Manufacturers Association (PhRMA), which is the leading trade group representing the US pharmaceutical industry, had argued in its petition to the Supreme Court that the lower court’s decision had “potentially far-reaching ramifications’’ for the industry, and called the decision against Novartis an error. “The decision unexpectedly exposes PhRMA members to potentially staggering retroactive liability from lawsuits by current and former employees,’’ the brief stated. “Serious consequences loom because of nothing more than an unexplained change in the Department of Labor’s interpretation of its regulations.’’ (Star-Ledger)

Of course, none of this changes the fact that the reps who filed the suit against Novartis—more than four years ago now—did put in the time—as much as 70 hours per week, according to their lawyers. 

Frankly, I can’t help thinking that the whole debate around unpaid overtime is just a little too Dickensian for 2011, and that a little more clarity would go a long way to improving the situation for both sides.

Tags: Abbott, Exempt, Merck, Non-Exempt, Novartis, Overtime Pay, Pharma Sales Overtime, Pharmaceutical Sales Reps, Roche, Schering-Plough
Posted in Drugs/Medical, Employment, lawsuits | No Comments »

California Labor Law—What’s New for 2011

January 11th, 2011. By janem

Here are a few California labor law perks for 2011. The U.S. Department of Labor decrees that employers grant time off for women to express breast milk.  The DOL’s fact sheet is posted here. Male workers are wondering if there is any legislative effort in the works to regarding equal rights in this area…they could always donate an organ and take time off.

SB 1304 provides new leave of absence rights to organ and bone marrow donors. Organ donors may take up to 30 days leave for that purpose and bone marrow donors may take up to five days leave for that purpose. The leaves are with full pay and benefits, except that the employer may require the organ donor to use up to two weeks accrued vacation/sick time and the bone marrow donor to use up to five days vacation/sick time unless doing so would violate a collective bargaining agreement.

Donors are entitled to the same or equivalent jobs when returning from leave. Further, these leave rights are independent of any rights under the Family and Medical Leave Act and the California Family Rights Act.

If you can’t stand the heat, as of Nov 4, 2010 the California Labor Commissioner issued new heat illness regulations, enforceable by CAL-OSHA, that apply to all outdoor places of employment, especially where the temperature exceeds 85 degrees Fahrenheit. Employees must be provided with shade sufficient to accommodate 25 percent of the workforce at one time, cool down periods of no less than five minutes in the shade upon request, as well as one quart of potable drinking water per hour worked.

“High heat” procedures (where the temperature reaches at least 95 degrees Fahrenheit) apply only to agriculture, construction, landscaping, oil and gas extraction, and transportation or delivery of agricultural products, construction materials or other heavy materials except for employment that consists of operating an air-conditioned vehicle and does not include loading or unloading. The new regs are posted here.

Unemployed rail workers are hopeful that California’s high-speed rail project will get the go-ahead; if so it will create thousands of jobs. The “Good Jobs Express Tour” ended, after three days and 400 miles, in Sacramento, where construction trades members rallied with the iron workers to make the case for high-speed rail and candidates, like Jerry Brown, who support it.

When Is Lunch Time?  AB 569 amends California Labor Code Sec. 512 to exempt construction workers, commercial drivers, certain security officers and employees of electrical and gas corporations or local publicly owned electric utilities from California’s meal period requirements if those employees are covered by a valid collective bargaining agreement containing specified terms—including meal period—overtime and arbitration provisions.

Have you been misclassified as an independent contractor?

California, among a number of other states, has arranged information-sharing with the IRS in the area of contractor classification. The goal is that incorrect contractor classification will probably be detected and challenged with more frequency. Among the concerns for an employer who engages independent contractors is that the classification, if valid, can avoid a lot of employment and tax regulation. But at the same time, contractor classification can be a hot tamale for litigation by multiple government agencies and workers.

By now everyone knows that you can’t light that joint at work. California Proposition 19 was rejected, which means that employers may lawfully ban all marijuana use, and being under the influence of marijuana, at work. However, California law permits medicinal marijuana use prescribed by a physician.

And one more: Under the FMLA  an employee who assumes the role of caring in loco parentis (in place of the parent) for a child  receives parental rights to family leave regardless of the legal or biological relationship. The U.S. Department of Labor gives this example: an aunt who cares for a young niece and nephew when their single parent has been called to active military duty or a grandfather who assumes responsibility for his sick grandchild when his own child is unable to care for the child. Also, an employee who intends to share parenting responsibilities with his or her same-sex partner will be able to seek FMLA leave to bond with their child.

The above are just a handful of changes in store for 2011. California employers are advised to review and update employee handbooks and personnel practices, and train supervisors, with the advice of experienced employment counsel or human resources professionals, or a labor law attorney.

Tags: California labor law, California law 2011
Posted in Employment | 1 Comment »

Wal-Mart Class Action Classless? wait and see…

December 9th, 2010. By LucyC

Wal-Mart’s making employment news again. Seems like they’re never really out of the news. You have to hand it to them—at least they’re consistent—consistently at odds with their employees, that is.

This time Wal-Mart has the auspicious honor of facing what could be the largest sex-discrimination case in US history, if the US Supreme Court, which agreed on Monday to examine the class-action at Wal-Mart’s behest, says the lawsuit can proceed as a class action.

But this story started almost a decade ago, when the suit was originally filed. The allegations are that Wal-Mart paid its female employees less than its male employees and gave them fewer opportunities for promotion. Not very original, but also not very surprising, given the retailer’s track record.

Wal-Mart objects to the case being allowed to go forward as a class action because of its size, and because the women involved reportedly worked at thousands—yes thousands of different stores—with potentially different issues.

However, all this hinges on the definition of a “class”. The larger issue at play here, and one which is being watched closely, is how a “class” is defined. Wal-Mart’s petition is being supported by other large players including Bank of America Corp, General Electric Co. and Microsoft Corp. According to a piece in the Wall Street Journal, these companies say that an earlier ruling by the Ninth U.S. Circuit Court of Appeals, which essentially authorized the class action suit to proceed, could, if allowed to stand, “expose other companies to staggering liability by allowing unrelated discrimination claims to proceed as class action suits.”

Wal-Mart claims the Appeals Court misapplied the standards for defining a class, and as a result has left it exposed to punitive damages when it should be liable only for back pay. (WSJ) 

So the Supreme Court has agreed to review whether the potential plaintiffs in the class have enough in common to warrant a ‘class action’—that their claims can be fairly decided in a single action.

Just as an aside, and for those of us not up on the ins-and-outs of class actions—this particular type of lawsuit combines multiple claims against a common defendant or defendants, into a single claim. This enables the courts to provide redress for large-scale ‘wrongdoing’ where it might not be possible on a case-by-case basis. We have a very comprehensive FAQ on class actions.

Back to Wal-Mart. Lawyers representing the ‘class’ allege that the retailer victimized its female employees through a ‘centralized corporate culture’ and are, therefore, entitled to be represented in a class.

If the Supreme Court finds against Wal–Mart in its review of the case, and allows the suit to proceed as a class action, the class could involve as many as 1.5 million plaintiffs. The potential pay out could be billions in damages and back-pay. And there’s the rub. 

BTW—this wouldn’t be the first time Wal-Mart has faced a discrimination class action. They were recently sued over workplace discrimination involving Latino employees at a Sam’s Club in Fresno, California, alleging a hostile work environment. The plaintiffs claim they were verbally harassed, including having derogatory words used against them. The lawsuit was filed by the Equal Employment Opportunity Commission (EEOC), which, according to Al Norman, writer with The Huffington Post, “does not file a suit unless it has given up trying to work out a voluntary agreement with a company.”

So, the Supreme Court justices will make a ruling on the class action issue—which will determine how the suit—or suits—proceed. But the arguments likely won’t be heard until the spring, and a ruling not made until the summer of 2011. Not to seem dark in any way, but some plaintiffs could be dead by the time this matter is finally settled. 

And Wal-Mart does have the motivation and the bucks to drag this out. According to a report in the Wichita Business Journal “Wal-Mart Stores Inc. reported a profit of $3.4 billion, or 95 cents per diluted share, on sales of $101.2 billion for the quarter ending Oct. 31. That compares to income of $3.1 billion, or 82 cents per diluted share, on revenue of $98.7 billion for the same quarter last year.” 

Wal-Mart, in addition to being an employer of ill-repute—also seems to be recession proof—on the backs of its employees.

Tags: Discrimination, Wal-Mary
Posted in Employment | No Comments »

But was it Sexual Harassment? Pleading Ignorance takes a look…

October 29th, 2010. By Kristine B

If you’ve read the news lately, you more than likely read that Clarence Thomas and Anita Hill are back at it again. If you’re like me, you may have wondered if we hadn’t somehow gone into some time warp, circa 1991. Well, as one could predict, it was the old “he did it,” “she lied” debate. That debate won’t be tackled—or resolved—here at Pleading Ignorance—heck, I hardly have access to the pertinent information—but what we can discuss is what sexual harassment actually is—and is not.

“Hey babe, nice skirt…”

So is a remark like that sexual harassment—or not? Let’s see… 

Sexual harassment involves unwelcome sexual advances, requests for sexual favors and other conduct (either physical or verbal) that is of a sexual nature. These activities become sexual harassment when the recipient’s submission to or rejection of the conduct affects his or her employment, interferes with work performance or creates an intimidating or hostile work environment. 

The person being harassed does not necessarily have to fear the loss of a job for the situation to be deemed sexual harassment. Sexual harassment can involve promises of promotions or more favorable working conditions or, if the conduct is rejected, demotions or hostile work conditions. 

Sexual harassment does not have to involve parties of the opposite sex. Furthermore, although the harasser can be the employee’s supervisor, the harassment can also involve Read the rest of this entry »

Tags: Pleading Ignorance, Sexual Harassment
Posted in Emerging Issues, Employment | 2 Comments »

There Will be No Lawsuits in Chile

October 14th, 2010. By Hunter West

We’ve all been enthralled, inspired, mystified while watching the successful rescue of the 33 Chilean miners unfolding on our television screens this week. It’s a compelling story that is ready-made for Hollywood—and you want to bet it will be a movie and a series of books, the options for which have already been hammered out. It would make for a worthy introductory movie for Oprah’s OWN network when she launches next year. 

The point is, an event that could have ended so tragically—didn’t. The grace of God has to certainly be a factor. So is luck. The president of Chile called it a miracle, and of course he is right. But the Chilean government and the mining authority did so many things right that by the grace of God and Lady Luck, they pretty much guaranteed a good outcome. 

Miracles can, and do get helped along by good planning. 

Compare what we have just witnessed on TV screens around the world to some disasters on our own shores—or just off them—that didn’t need to happen but did because someone, somewhere cut corners. 

Look at the BP oil spill. Of course, there is inherent risk with any drilling attempt. But oil drilling R&D over the years has come up with a series of checks, balances and safeguards that serves to minimize that risk. In the BP case it is alleged and widely believed that a number of those safeguards were skipped in the interest of haste and cost. A final inspection that would have identified deficiencies leading to a catastrophic failure, was called off. The inspection team was on the Deepwater Horizon, ready to go, when they Read the rest of this entry »

Tags: Chile Miners
Posted in Employment, Personal Injury | 2 Comments »