Novartis sales reps fighting for overtime pay just got a powerful ally. The US Department of Labor filed an amicus brief with a federal appeals court contending that a lower court was wrong to toss their lawsuit,The Pink Sheet's Brenda Sandburg reports.
In an Oct. 13 filing, the department argued the district court "committed legal error" in concluding that sales reps are outside sales persons and, therefore, are exempt from overtime requirements of the Fair Labor Standards Act (here is the Labor Department brief).
"Because the reps do not sell any drugs or obtain any orders for drugs, and can at most obtain from the physicians a non-binding commitment to prescribe [Novartis'] drugs to their patients when appropriate, the reps do not meet the regulation's plain and unmistakable requirement that their primary duty must be 'making sales,'" the Labor Department stated.
The Labor Department also rejected the lower court's finding that sales reps are exempt from overtime as administrative employees, the Pink Sheet writes. To qualify for the exemption, employees must exercise discretion and independent judgment "with respect to matters of significance." The DOL said sales reps don't have that kind of independence since they're given lists of docs to visit and must present scripted messages.
"The fact that the DOL submitted an amicus brief is quite significant," Jeremy Heisler, of Sanford Wittels & Heisler, who is representing the Novartis sales reps, tells the Pink Sheet. He notes that under Supreme Court precedent, an appeals court must give deference to Department of Labor regulations and briefs submitted on issues involving how those regs were created and are applied. He estimates Novartis owes about $100 million in overtime pay.
At least 16 drug makers have been sued by sales reps for overtime pay. The Novartis suit, which was filed in March 2006 and involves some 2,500 reps, was the first. The litigation, however, has taken a confusing path, because different district courts have reached opposite conclusions.
In the first rulings on the issue, a district court in California decided sales reps are outside salespeople and so not entitled to overtime pay. But the Labor Department noted, except for the Novartis case, district courts within the Second Circuit have concluded the outside sales exemption doesn't apply to sales reps because they don't make sales.
[To see the complete story requires a subscription. Full disclosure - Ed Silverman is an editor at The Pink Sheet].
8 Comments
ED: Another Pink Sh1t advertisement??? give us a break... The rag sucks
Dear Mole,
Thanks for the note. But let's be clear - I have always posted items that were first reported by other media and provided the appropriate credit - up high in the item - along with a link. In the past, I have linked to The RPM Report, a sister publication, more than once - and this was long before I was associated with The Pink Sheet professionally.
How do I choose which items I want to post from other media? If they're interesting and/or important. This item qualified - it's about a federal agency siding with sales reps in long-running and confusing litigation that has sizeable implications for drug makers and their employees.
And I was involved in obtaining the Department of Labor brief (which you can read by way of the link). I handed it off to the reporter to write, instead of posting it myself because I have an obligation to find the best stories for the Pink Sheet, not just the best items for Pharmalot. In other words, I shared.
And please be advised that I placed the disclaimer at the bottom of the item because readers should know if they will have easy access to a link or not. It's a common courtesy that, when I first started Pharmalot nearly three years ago, I regularly extend to readers who ought to know if a publication requires payment. That's not an advertisement. If I were to link to Nature, for instance, I would place the same info.
I'm sorry if you don't like the Pink Sheet, but that doesn't negate the value of this story or my obligation to be courteous and candid. Try looking at this way. Hope this helps.
Cheers, Ed
Ed: I was stunned to see that you are back - glad to see I only missed the first 6 days. Advertise the pink Sheet as much as you want. In case people haven't noticed, PHARMALOT supports the old adage - some of the best thing is life ARE FREE! (But meanwhile someone has to feed the beast!)
Pharma rep for 10 plus yrs now do Device. Could this be a bigger joke LOL. This all has to do with dinner programs I'm sure.Well maybe if the FDA banned these overpriced charades this would not even come up ! Most drug reps open their mouth to the total of about 15-20 minutes a day for a six figure salary that includes for the most part just delivering lunch and now this. This just goes to show the arrogance of these reps unreal !
Great post and info, Ed. Glad you resurrected Pharmalot,
Dan
SOOOOOOOOO great to have you back. You were missed, amigo.
Industry Vet - When I heard about Drug Rep Overtime I thought it was about the companies asking for some of their money back. Hasn't anyone heard of the "4T's" Tuesday-to-Thursday-Ten-to-Two\\
Any rep who sues for this is just putting a nail in their own coffin.
I spent 15 years as a rep, just left 11 months ago to teach A&P and Biology full time at University.
The way the industry has went over last few years, firing reps for bullcrap reasons, ruining people who gave years of their life serving a company, I hope these reps suing win win win.
Majority of reps (Primary Care) do not make 6 figures like stated above.
It was a great field when I entered, but a complete joke when (and why) I decided to leave.
Now I train future docs in A&P.