Posts Tagged ‘ Pharma Sales Rep ’

Understand the Pharmaceutical Representative Overtime Lawsuits? Here’s Help

March 25th, 2011. By

If not, you’re not alone. In fact, even the courts have reached contradictory rulings in the pharmaceutical representative overtime lawsuits they’ve seen. While the pharma reps won the Novartis lawsuit, they lost the Johnson & Johnson and GlaxoSmithKline lawsuits. Those losses, however, don’t mean that pharmaceutical sales reps should just give up. In each case, the judges relied on different legal issues and exemptions, which is how such different results were achieved. Pleading Ignorance takes a look at what’s been going on…

First, the Backstory: the Fair Labor Standards Act 

Under the Fair Labor Standards Act, certain employees are considered exempt from overtime pay. Those exemptions include outside sales employees and people who are considered “administrative”. Outside sales employees are considered exempt because they are paid on commission and therefore have an unlimited earning potential. Furthermore, many outside sales people work independently of an office and therefore have a say in what hours they work and how they go about their job. To be considered exempt from overtime pay, however, outside sales people must spend at least 50 percent of the time in their job involved in sales. 

Administrative people are those who exercise independent authority, judgement or discretion in their job. They have a great deal of discretion in their job activities and how they fulfill their employment requirements. 

Lawsuits have been filed against various pharmaceutical companies alleging that pharmaceutical sales reps do not fit either the outside sales exemption or the administrative exemption. 

Novartis Sales Rep Overtime Lawsuit

In the Novartis lawsuit, the court found that the pharmaceutical reps were misclassified as exempt from overtime pay—meaning they should receive pay for overtime hours worked. In reaching the decision, the court found that Novartis sales representatives were not directly involved in the sales transaction. Instead, the reps informed physicians of a product’s benefits and encouraged physicians to prescribe Novartis products. At no point during the visit did the sales rep actually engage in a sales transaction. 

Furthermore, the court found that the Novartis reps didn’t fall under the administrative exemption because Novartis controlled the sales pitches and reps were not allowed to deviate from that pitch. Additionally, the reps did not have the authority to in any way direct or interpret Novartis policies or procedures. Because the courts found the Novartis reps were not exempt under the outside sales or administrative rules, the reps are therefore, according to the courts, eligible for overtime pay. 

Johnson & Johnson Sales Rep Overtime Lawsuit

A lawsuit against Johnson & Johnson, however, resulted in a different decision. In that case, the pharmaceutical sales representative was found to be exempt from overtime pay under the administrative employee guidelines. In that case, the court found that the plaintiff was able to develop her own itinerary, could visit some doctors more frequently than others and was expected to develop a plan to obtain more sales. The court found that the plaintiff worked without direct oversight most of the time and therefore had discretion and independent judgment required for the administrative exemption. 

GlaxoSmithKline Sales Rep Overtime Lawsuit

In GlaxoSmithKline’s lawsuit over pharmaceutical representative overtime pay, the courts backed GlaxoSmithKline’s decision not to pay the reps overtime. In this case, unlike Johnson & Johnson, the court determined that GSK sales reps fall under the guidelines of outside sales representatives because they are motivated by commissions and they have freedom to work outside the office. 

So it currently appears that whether or not a pharmaceutical rep is eligible for overtime pay is somewhat determined by which court hears the lawsuit and by which company you work for and how much authority you have in your job. 

The court’s decision in GSK actually contradicted a brief filed by the US Department of Labor that supported pharmaceutical reps being paid overtime. So, even though the Department of Labor supports overtime for pharmaceutical reps, there’s no guarantee that the courts will agree with it. More lawsuits are still to come and the Supreme Court might wind up determining the whole thing in the end. As of now, though, there’s no reason for pharmaceutical representatives to give up the fight.

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Posted in Drugs/Medical, Emerging Issues, Employment, Pleading Ignorance | No Comments »

Not All Pharma Sales Reps Happy with Novartis Overtime Decision

July 21st, 2010. By

When it comes to lawsuits that affect a lot of folks, there are always those who feel they’ve come out ahead, and those who don’t…

If you read some of the comments floating around online about the Novartis overtime pay ruling that happened a couple of weeks ago, you just might be surprised. Most of us automatically assume that when someone sues for overtime pay—and wins!—that everyone’s hopping around with glee and a sort of “yeah! screw them!” attitude about the offending employer.

Not so with Novartis.

But it’s not because anyone seems to have a lot of love for Novartis. No, the issue is more about the bigger picture—and the age-old question of “what’s in it for me?”.

Well, if you’re a “sales” representative at Novartis, the “what’s in it for me?” question may be answered with a “not much.” Seems this decision sort of makes you a bit of a non-entity in the scheme of things—ie, the scheme of things being labelled “sales”. What do you do? Do you sell? No. Do you work on the marketing plans—as in a more senior, independent decision-maker role? Uh, no. So you, therefore, don’t meet the outside sales or administrative exemptions for overtime pay—and gee whiz—you can get—and should’ve gotten—overtime pay!

Note, I said “non-entity”. That’s not meant as a low blow here. The fact of the matter is Read the rest of this entry »

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Posted in Emerging Issues, Employment | 1 Comment »

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