Posts Tagged ‘ Exempt ’

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 »

Are Outside Sales Reps Exempt from Overtime Pay?

October 5th, 2010. By Kristine B

It’s one of the great conundrums facing employees today: determining whether or not they are exempt from overtime pay. For some, the answer is simple but for others, the answer is much more difficult. Many companies try to classify employees as exempt from overtime pay for obvious reasons—it saves them money. But that doesn’t make it right. This week, Pleading Ignorance looks at outside sales representatives and explains why (or why not) they should be paid overtime. 

Outside sales representatives spend a lot of their time talking with clients and potential clients. They explain the company’s products, prices and the benefits their products have over a competing product. They may or may not leave free samples with the client (or potential client) and may follow up later to encourage the potential client to purchase the product. 

Outside sales representatives are considered exempt from overtime pay, but there is a catch to this. Some sales reps may be misclassified as exempt from overtime pay when, in fact, they are not. 

To be exempt from overtime pay as an outside sales person, the person has to directly affect the sale transaction. 

Here’s an example: I market pens to you (let’s say you’re a doctor who needs pens). Because of my marketing of the pens, you decide to buy them. I have directly affected the sale of the pens and am, therefore, considered an outside sales person. 

Now, consider pharmaceutical sales reps: They go to a doctor’s office and market a drug, drug X. But, the doctor doesn’t actually purchase drug X. All the doctor does is prescribe Read the rest of this entry »

Tags: Exempt, Outside Sales, Overtime Pay
Posted in Employment | 2 Comments »

Overtime Pay Part 2: Revenge of the Administrative Assistants

October 18th, 2009. By Kristine B

Okay, so it may sound like a really bad, B movie. But the truth of the matter is that a lot of people are not getting their overtime pay because they have the words “managerial,” “administrative,” or “executive” in their job title. But those titles alone don’t make a person exempt from overtime. So for Pleading Ignorance this week, we’re looking at the ins and outs of exemption from overtime pay. 

To refresh your memory, last week we looked at the three questions that you must answer “Yes” to in order to be considered exempt from overtime pay—meaning if you answer ALL 3 questions with a “yes”, you are not entitled to overtime pay.

The first question is pretty straightforward… 

1. Do you make at least $23,600 per year (or $455 per week)? 

If “No,” then you are eligible for overtime pay and you needn’t go further. But, if you answer “Yes,” then move on to the next question… 

2. Are you paid salary? 

To be exempt from overtime pay, you MUST be on salary. Employees who are paid an hourly rate are eligible for overtime pay. Fair enough. However, just because you are paid salary doesn’t mean you don’t qualify to get the extra bucks if you work extra hours. Remember, you must have answered “Yes” to all three questions, not just the one about the salary.

The first two questions are pretty no-brainer—but the third question is where things get screwy because it can appear to have a lot of gray areas. But in reality, it’s pretty straightforward as well…

3. Are your main job duties administrative, professional or executive? Read the rest of this entry »

Tags: Exempt, Overtime Pay, Pleading Ignorance
Posted in Emerging Issues, Pleading Ignorance | No Comments »