On April 16th, the United States Supreme Court heard oral arguments in
Christopher v. SmithKline Beecham Corp.(GlaxoSmithKline). At issue is whether pharmaceutical sales representatives (PSRs) are "outside salesmen" and therefore exempted from overtime-pay requirements of the Fair Labor Standards Act of 1938 (FLSA).
Glaxo classifies its PSRs as "outside salesmen" who are not entitled to overtime pay for hours worked in excess of forty in a workweek. The PSRs allege that they usually worked ten to twenty hours per week outside of regular business hours, for which they should have received overtime pay. The PSRs argue that they should not be classified as "outside salesmen" because they cannot sell samples, take orders for medications or negotiate contracts with physicians; they can only try to convince physicians to prescribe Glaxo products.
This case has wide-ranging ramifications for not only the pharmaceutical industry but other sales industries. We will report on the decision in this case which is expected this summer. Employers utilizing the services of sales representatives or independent contractors without payment of overtime wages should review their policies to ensure FLSA compliance.
