Are Drug Sales Reps FLSA Exempt? Supreme Court to Resolve Split in the Circuits

Contributed by Jon Hoag

The courts currently disagree as to whether pharmaceutical sales representatives meet the outside sales exemption under the Fair Labor Standards Act (FLSA).  The U.S. Supreme Court will review the 9th Circuit’s decision in Christopher v. SmithKline Beecham Corp. d/b/a GlaxoSmithKline, 635 F. 3d 383 (9th Cir. 2011), where the 9th Circuit found that the Act’s outside sales exemption barred the claims of a proposed class of drug sales representatives.  Last year, the 2nd Circuit reached the opposite conclusion and permitted the plaintiff drug sales representatives to pursue their FLSA overtime claims against the pharmaceutical company. 

The Supreme Court’s review of this matter will resolve the split in the circuits and provide much needed clarity for the pharmaceutical industry regarding the exemption status of its pharmaceutical sales representatives.  In addition, the decision is anticipated to have broader implications because the court will likely review the appropriate level of deference that courts should give to the Department of Labor’s (DOL) interpretations of the FLSA.  The 9th Circuit rejected the DOL’s view that pharmaceutical sales representatives do not meet the outside sales exemption whereas the 2nd Circuit found that it should defer to the DOL’s interpretations of the Act.  If the justices take up this latter issue, employers will have a better understanding of just how much authority and influence the DOL has on the courts with respect to enforcing the FLSA.