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U.S. Appeals Court Rules Novartis Salespeople Covered by FLSA Overtime Law

July 10, 2010

According to a recent wage and hour ruling that our Riverside, California employment attorneys have been following, sales representatives of Novartis AG, are supported by federal, New York state, and California state wage and hour laws that require overtime compensation.

In a United States Court of Appeals ruling in New York last week, pharmaceutical "sales representatives," who have the responsibility of visiting doctor's offices to give drug samples to doctors, and educate them with scripted pharmaceutical information describing the drugs, are entitled to overtime payment.

In the decision, the U.S. Court of Appeals overturned a 2009 district court ruling, and claimed that the Novartis representatives are not subject to federal and state "outside salesman" or "administrative" exemptions to overtime compensation. In its opinion, the three-judge panel held that representatives are not outside salesman, and not exempt from the Fair Labor Standards Act (FLSA) or state laws, as the employees were not actually engaged in "selling" the drugs.

After the December decision of last year, the sales representatives were reportedly supported by the U.S. Department of Labor (DOL), as the DOL filed an amicus appeal brief. The court decision from last week relied on the DOL laws defining "outside salesman" and "administrative" employees, and ruled that because the employees were controlled and lacked the "independent judgment" in their duties necessary to make them classify as administrative employees, they were not exempt.

This ruling applies to around 2,500 Novartis former and current representatives from March 2000 to April 2007, who are entitled to overtime pay under FLSA if they work or have worked over 40 hours per week. This ruling could have big consequences for employers who engage in employee misclassification within the pharmaceutical industry.

In cities throughout Orange County, California, contact our wage and hour attorneys at Howard Law, PC today.

Novartis Salespeople Covered by Law Requiring Overtime, Appeals Court Says, Bloomberg, July 7, 2010

Federal Appeals Court Rules Pharmaceutical 'Sales' Reps Entitled to Overtime Pay, PR Newswire, July 6, 2010

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)