Seventh Circuit: Pharmaceutical Sales Reps Exempt from Overtime under the FLSA

The U.S. Supreme Court is currently deciding a case on the question of whether pharmaceutical sales reps are exempt from the requirements of the Fair Labor Standards Act (FLSA) for overtime pay. In Susan Schaefer-LaRose v. Eli Lilly & Co., the Seventh Circuit ruled on the same question, approaching it from a different angle.

The Supreme Court is considering whether the pharmaceutical sales reps are exempt under an outside-sales exemption, and the issues in that case revolve around whether the reps are actually making sales. In the Seventh Circuit case, the court examined a different overtime exemption, one for “any employee employed in a bona fide executive, administrative, or professional capacity."

The Seventh Circuit found that the pharmaceutical sales reps were doing administrative work and that the exemption therefore applied. In classifying the reps' work as administrative, the court noted that the reps' work fulfilled several requirements for the "administrative" exemption:

• By maintaining regular contact with physicians and addressing their concerns, the reps performed work "directly related to the general business operations of the employers."
• The reps exercised a "significant measure of discretion and independent judgment" in their work, despite regulatory constraints on all workers in the pharmaceutical industry.

WeComply’s online Fair Labor Standards Act and Worker Classification training courses describe the differences between the "exempt" and "non-exempt" classifications and help companies avoid the hazards of misclassifying workers. 

Categories: Workplace Compliance
Tags: FLSA, Worker Classification