Skip to main content

(414) 276-2850

Supreme Court: Pharmaceutical Reps Not Entitled to Overtime Pay under the FLSA

Posted by Attorney Roger L. Pettit in Human Resources / Comments

In Christopher et. al. v. SmithKline Beecham Corp. the Supreme Court ruled Monday that pharmaceutical representatives aren’t entitled to overtime under the Fair Labor Standards Act (FLSA) (Click on the this link for the opinion: http://www.supremecourt.gov/opinions/11pdf/11-204.pdf).  The FLSA overtime requirement does not apply to workers who are considered “outside salesmen” under 29 U.S.C. 213(a)(1).  For the discussion of the definition of “outside salesmen”, see page 1 of the above link.

In this case the petitioners were pharmaceutical sales reps for GlaxoSmithKlein and spent on average 10-20 hours per week “attending events and performing other miscellaneous tasks” in addition to a 40 hour work week.  The petitioners filed a claim asserting that they were owed overtime pay and the pharmaceutical company argued that the petitioners were “employed in the capacity of outside salesmen” under § 213(a)(1).  The Supreme Court agreed with GlaxoSmithKlein and therefore the reps are exempt from the FLSA overtime rules.

Because the FLSA excludes individuals “employed…in the capacity of [an] outside salesman” the Court analyzed the definition of “capacity” under the FLSA, the DOL regulations and relevant case law.  The court wrote that the petitioners’ work falls in the category of “other disposition”, a catch-all phrase,  which is part of the definition of “capacity” under the DOL regulations.  As a result, overtime completed by pharmaceutical reps is not compensatory under the overtime rules of the FLSA because they are working "in the capacity of outside salesmen."   The Supreme Court noted that the reps “are hardly the kind of employees that the FLSA was intended to protect.”  I’m sure pharmaceutical companies are pleased with the outcome of this case.  What do you think?

Attorney Roger L. Pettit
Attorney Roger L. Pettit