Over a year ago, the Federal Appeals Court ruled that Novartis sales reps are not exempt from overtime provisions of the Fair Labor Standards Act and this means they should be paid overtime. The drugmaker has agreed to a $99 million settlement, according to lawyers for the reps.
The issue on hand is whether sales reps are exempt from overtime provisions of the Fair Labor Standards Act. The FLSA overtime compensation requirement does not apply to employees who work as outside salespeople, but the law does require employers to pay overtime for hours worked beyond 40 hours a week, unless a FLSA exemption applies. Drugmakers argue their sales reps are, indeed, outside salespeople who close sales because the primary customer is the physician. The reps argue that a direct sale doesn’t occur because medicines are actually purchased by patients and hospitals, which receive the drugs from wholesalers. Where is the line for exemptions drawn?
Until now drugmakers have been fighting efforts by their current and former sales reps to win overtime pay. The topic is so controversial and has divided the courts. Rulings have been so conflicting that the US Supreme Court agreed last November to review the debate. A ruling is expected this summer.
“Novartis Pays $99M To Settle Overtime Rep Suit.”PharmaLot. (2012) <http://www.pharmalot.com/2012/01/novartis-pays-99m-to-settle-overtime-rep-suit/>.[related_posts limit=”5″]