Supreme Court Gets Final Say on Overtime

With conflicting lower court decisions over whether pharmaceutical sales reps should be paid for overtime, the Supreme Court has agreed to settle the matter. The court will hear the case brought by two former GSK reps that were denied their overtime claim by a Circuit Court.

For years the industry has warned that overtime suits may swamp the industry with potentially billions of retroactive payments.

The biggest challenge for the Court will be to untangle conflicting stances from the various circuit courts. Last year a lower court decisions granted overtime payments to sales representatives at Novartis and Merck, finding that sales reps at Novartis and Schering Plough (now Merck) did not qualify for the "sales" exemption and were in fact owed overtime pay.

In the suit reps claimed that their primary responsibility was to visit physicians' offices, drop off drug samples, and deliver scripted messages about the company's products. Echoing the opinion of much of the pharmaceutical industry, the company argued that these workers are outside salespersons and therefore exempt from overtime pay under federal and state law.

Interestingly, The Department of Justice has argued along with the reps, that the employees were not eligible for an "outside sales exemption" and, in fact, were not engaged in sales activities.

A decision is not expected until June 2012.