Supreme Court Weighs Overtime Pay for Drug Firm Representatives

On Monday, the Supreme Court heard oral arguments in a case that will determine whether pharmaceutical representatives are entitled to overtime pay, Reuters reports (Vicini, Reuters, 4/16).

Background

The class-action lawsuit was filed by two former GlaxoSmithKline drug representatives, who claim they were not compensated for the additional 10 to 20 hours they worked each week beyond their regular work hours to meet with physicians and other potential clients (Sherman, AP/U-T San Diego, 4/16).

The plaintiffs argue that they are entitled to the extra pay under the Federal Labor Standards Act. The law requires companies to provide overtime compensation to employees, but it includes exemptions for a variety of cases, including workers who are considered "outside salesmen" (Reuters, 4/16).

According to the New York Times, the question at the center of the case is whether the representatives' work can be considered sales.

Monday's Arguments

Paul Clement -- the lawyer for GSK -- argued that the two plaintiffs are "pharmaceutical sales representatives" who "were hired for sales jobs," adding that they were "given sales training ... assigned to sales territory" and that they were "evaluated and compensated as salespeople." Chief Justice John Roberts noted that Clement "stopped one step short" of saying the plaintiffs "make sales."

Malcolm Stewart -- an attorney for the Department of Labor, which is supporting the plaintiffs' case -- noted that the representatives are identified in the industry as "detailers" and not as sales representatives because they were tasked to "set in motion a chain of events that will make those sales more likely to occur."

Justice Elena Kagan said that line of reasoning is "blind to the way the industry actually works," adding, "The real work is done by the detailer getting the doctor to say, 'Yeah, I'm going to start prescribing this where it's medically appropriate'" (Liptak, New York Times, 4/16).

Several of the justices also questioned future limits on overtime pay if the Supreme Court rules in the plaintiffs' favor (AP/U-T San Diego, 4/16). If that happens, it could mean that drugmakers might be forced to pay billions in overtime to more than 90,000 drug representatives, the Times reports (New York Times, 4/16).