Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FLSA

In Smith v. Johnson & Johnson, 2008 WL 5427802 (D.N.J. Dec. 30, 2008), NJ found that pharmaceutical salesman do not qualify for the outside salesman exemption to the FLSA. In other words, they must be paid overtime for all hours worked over 40 in a workweek.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

What a joke ... just lazy sales reps (or NO, I guess were not "sales" reps) that probably got fired because their manager knows they were lazy, so they file a lawsuit for some BS like this. I'm sure this is the beginning of a domino effect but I think it's ridiculous.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

yeah you're right. Why have the company act legally and ethically? no reason

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

This type of case is about employee exploitation industry wide. Many years ago, reps were called "detail man" and worked a 9-5 shift or no more than 40 hours per week. However, companies found a way to reclassify them as salesman in order to have reps work longer hours and not compensate reps accordingly. Let's face it, we do not sell anything and only go out to spit out canned messages created by the marketing team. In fact, it would be illegal for reps to sell pharmaceuticals to customers.
What these companies do is categorically invalid and unjust.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

So when do the greedy attornys get involved to get us greedy reps some money. I smell class action lawsuit. SWEEEEEET! and no, I don't care what you say about me. I just wanna get paid sucka!

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

Wait a minute - think about this for a minute. Lawsuits are expensive to file and take tons of time. Attorneys want to get paid too and if a case is weak will steer clients to other courses of action. To make a blanket statement that, "rep probably got fired because their manager knows they were lazy, so they file a lawsuit for some BS" is not clear reasoning and quite naive about the legal system. This case is a win for reps as is the Connecticut case that is more recent where the company asked for a summary judgement and was not given one - opening the door for real discovery and a process to look into the phony claim by pharma that all reps are "sales" reps.

It is well known that "detail men" worked 40 hours. On the other hand current reps have had to sign documents attesting they will get gas, samples, car repairs, do paperwork and reports all on personal time. If reps are not getting paid commissions any more (and at Schering they are not), they do not take orders, they have no control over their call order (PCAM anybody?), complete education and paperwork after regular hours, are required to be in the field from 8:30-5:00 and are not getting paid for the excess, what is so "ridiculous" about a lawsuit aimed at calling to task the slave driver that is your company? Work out your hourly rate with all this extra 'required' time and maybe you'll re-think who is ridiculous.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

Dat's right biatch! I wants my money!!

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

So if what you say is valid, when I work a trade show on the weekends, I can take two days off during the week.

We are salaried employees, hours do not figure into it. Plane and simple. Show me the labor law that states that "detail men" can only work 40 hours. This is not a child labor or hourly paid job.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

Minimum Wage and Overtime Premium Pay Standards Applicable to Non supervisory NONFARM Private Sector Employment Under State and Federal Laws
July 24, 2009

Look at your pay stubs, it breaks your salary by hours and states that you work 40 hours.

These are not my opinions, its the law. Accordingly, Pharmaceuticals Sales Reps do not fulfill the elements for exceptions under Fair Labor Laws.
Overview:
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a work week at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any work week. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days. The Act applies on a work week basis. An employee's work week is a fixed and regularly recurring period of 168 hours —seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different work weeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular work week must be paid on the regular pay day for the pay period in which the wages were earned.

Who is Covered:
The Fair Labor Standards Act (FLSA) establishes standards for minimum wages, overtime pay, record keeping, and child labor. These standards affect more than 100 million workers, both full-time and part-time, in the private and public sectors. The Act applies to enterprises with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell, or work on goods or materials that have been moved in or produced for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies (i.e., the Act does not cover enterprises with less than this amount of business). However, the Act does cover the following regardless of their dollar volume of business: hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally, or physically disabled or gifted; preschools, elementary, and secondary schools and institutions of higher education; and federal, state, and local government agencies. Employees of firms that do not meet the $500,000 annual dollar volume test may be covered in any work week when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods. The Act covers domestic service workers, such as day workers, housekeepers, chauffeurs, cooks, or full-time babysitters, if they receive at least $1,500 (2007) in cash wages from one employer in a calendar year, or if they work a total of more than eight hours a week for one or more employers. (This calendar year threshold is adjusted by the Social Security Administration each year.) An enterprise that was covered by the Act on March 31, 1990, and that ceased to be covered because of the increase in the annual dollar volume test to $500,000, as required under the 1989 amendments to the Act, continues to be subject to the overtime pay, child labor, and record keeping requirements of the Act. The Act exempts some employees from its overtime pay and minimum wage provisions, and it also exempts certain employees from the overtime pay provisions alone. Because the exemptions are narrowly defined, employers should check the exact terms and conditions for each by contacting their local Wage and Hour Division office within the Department of Labor’s Employment Standards Administration (ESA). The following are examples of employees exempt from both the minimum wage and overtime pay requirements: • Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals (as defined in the Department of Labor's regulations); 1
• Employees of certain seasonal amusement or recreational establishments;
• Employees of certain small newspapers and switchboard operators of small telephone companies;
• Seamen employed on foreign vessels;
• Employees engaged in fishing operations;
• Employees engaged in newspaper delivery;
• Farm workers employed on small farms (i.e., those that used less than 500 "man-days" of farm labor in any calendar quarter of the preceding calendar year); and
• Casual babysitters and persons employed as companions to the elderly or infirm. The following are examples of employees exempt from the overtime pay requirements only:
• Certain commissioned employees of retail or service establishments; • Auto, truck, trailer, farm implement, boat, or aircraft salespersons employed by non-manufacturing establishments primarily engaged in selling these items to ultimate purchasers;
• Auto, truck, or farm implement parts-clerks and mechanics employed by non-manufacturing establishments primarily engaged in selling these items to ultimate purchasers;
• Railroad and air carrier employees, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans;
• Announcers, news editors, and chief engineers of certain non-metropolitan broadcasting stations;
• Domestic service workers who reside in their employers' residences;
• Employees of motion picture theaters; and
• Farm workers. Certain employees may be partially exempt from the overtime pay requirements. These include:
• Employees engaged in certain operations on agricultural commodities and employees of certain bulk petroleum distributors;
• Employees of hospitals and residential care establishments that have agreements with the employees that they will work 14-day periods in lieu of 7-day work weeks (if the employees are paid overtime premium pay within the requirements of the Act for all hours worked over eight in a day or 80 in the 14-day work period, whichever is the greater number of overtime hours); and
• Employees who lack a high school diploma, or who have not completed the eighth grade, who spend part of their work weeks in remedial reading or training in other basic skills that are not job-specific. Employers may require such employees to engage in these activities up to 10 hours in a work week. Employers must pay normal wages for the hours spent in such training but need not pay overtime premium pay for training hours. Basic Provisions/Requirements The Act requires employers of covered employees who are not otherwise exempt to pay these employees a minimum wage of not less than $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Youths under 20 years of age may be paid a minimum wage of not less than $4.25 an hour during the first 90 consecutive calendar days of employment with an employer. Employers may not displace any employee to hire someone at the youth minimum wage. Employers may pay employees on a piece-rate basis, as long as they receive at least the equivalent of the required minimum hourly wage rate. Employers of tipped employees (ie., those who customarily and regularly receive more than $30 a month in tips) may consider such tips as part of their wages, but employers must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also meet certain other conditions. The Act also permits the employment of certain individuals at wage rates below the statutory minimum wage under certificates issued by the Department of Labor:
• Student learners (vocational education students);
• Full-time students in retail or service establishments, agriculture, or institutions of higher education; and
• Individuals whose earning or productive capacities for the work to be performed are impaired by physical or mental disabilities, including those related to age or injury.

The Act does not limit either the number of hours in a day or the number of days in a week that an employer may require an employee to work, as long as the employee is at least 16 years old. Similarly, the Act does not limit the number of hours of overtime that may be scheduled.

However, the Act requires employers to pay covered employees not less than one and one-half times their regular rates of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt.

Employers must keep records on wages, hours, and other information as set forth in the Department of Labor's regulations. Most of this data is the type that employers generally maintain in ordinary business practice.

The Act prohibits performance of certain types of work in an employee's home unless the employer has obtained prior certification from the Department of Labor. Restrictions apply in the manufacture of knitted outerwear, gloves and mittens, buttons and buckles, handkerchiefs, embroideries, and jewelry (where safety and health hazards are not involved). Employers wishing to employ homeworkers in these industries are required to provide written assurances to the Department of Labor that they will comply with the Act's wage and other requirements, among other things.

The Act generally prohibits manufacture of women's apparel (and jewelry under hazardous conditions) in the home except under special certificates that may be issued when the employee cannot adjust to factory work because of age or disability (physical or mental), or must care for a disabled individual in the home. Special provisions apply to state and local government employment. It is a violation of the Act to fire or in any other manner discriminate against an employee for filing a complaint or for participating in a legal proceeding under the Act.

The Act also prohibits the shipment of goods in interstate commerce that were produced in violation of the minimum wage, overtime pay, child labor, or special minimum wage provisions. Employee Rights Employees may find out how to file a complaint from local Wage and Hour Division offices, or from the program's toll-free help line at 1-866-4USWAGE. In addition, an employee may file a private suit, generally for the previous two years of back pay (three years in the case of a willful violation) and an equal amount as liquidated damages, plus attorney's fees and court costs. Compliance Assistance Available More detailed information about the FLSA, including copies of explanatory brochures and regulatory and interpretative materials, is available on the Wage and Hour Division's Web site, or by contacting the local Wage and Hour Division offices. Another compliance assistance resource, the elaws Fair Labor Standards Act Advisor, helps answers questions about workers and businesses that are subject to the FLSA. For additional assistance, contact the Wage and Hour Division help line at 1-866-4USWAGE. Penalties/Sanctions The Department of Labor uses a variety of remedies to enforce compliance with the Act's requirements. When Wage and Hour Division investigators encounter violations, they recommend changes in employment practices to bring the employer into compliance, and they request the payment of any back wages due to employees. Willful violators may be prosecuted criminally and fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage or overtime pay requirements are subject to civil money penalties of up to $1,100 per violation. When the Department of Labor assesses a civil money penalty, the employer has the right to file an exception to the determination within 15 days of receipt of the notice. If an exception is filed, it is referred to an Administrative Law Judge for a hearing and determination as to whether the penalty is appropriate. If an exception is not filed, the penalty becomes final. The Department of Labor may also bring suit for back pay and an equal amount in liquidated damages, and it may obtain injunctions to restrain persons from violating the Act. Relation to State, Local, and Other Federal Laws State laws also apply to employment subject to this Act. When both this Act and a state law apply, the law setting the higher standards must be observed.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

District Court Rules Pharmaceutical Sales Representatives Are Not Exempt under FLSA “Outside Sales” Exemption Last week, in a Fair Labor Standards Act (“FLSA”) case, a federal judge denied summary judgment to a pharmaceutical company after finding that the former sales representatives were non-exempt employees entitled to overtime payment.* In the complaint, the employees alleged that their employer, Schering Corporation (“Schering”) misclassified them as “exempt” employees and as a result, failed to pay them overtime wages in violation of the FLSA.* In response to the allegations, Schering argued that the former employees were pharmaceutical sales representatives and thus, fell within the FLSA’s outside sales exemption.* The district court rejected Schering’s argument, finding that the pharmaceutical sales representatives did not fit within the outside sales exemption because they did not “make sales or obtain contracts or orders,” as required under the regulations.* Moreover, the court noted that the sales representatives did not have the capacity to carry out sales with the physicians that they visited because their employer prohibited them from entering into contracts with physicians for the prescription or purchase of their employer’s product.* Relying on the plain meaning of the statutory and regulatory texts that define the FLSA’s outside sales exemption, the court concluded that the employees did not “sell” or make a “sale” under the FLSA and must receive time-and-a-half for all hours worked in excess of 40 hours a week. The takeaway from this case is that the standard for determining whether an employee falls within the “outside sales” exemption is not whether the term “sales” is included in her title, but rather whether the employee actually sells something within the scope of her duties.* The order and opinion in Kuzinski et al, v. Schering Corp., No. 3:07cv233 (D. Conn. March 30, 2009) is available here.* For information on The Employment Law Group® law firm’s Wage and Hour Practice, click here. This entry was posted on Thursday, April 9th, 2009 at 9:24 am and is filed under Fair Labor Standards Act. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

Yes. It is. You should take off two days during the week. Please read the posts following yours in great detail.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

I want my REPARATIONS!!!

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

Keep your eyes on the ball, don't sit back when it is time to come forward, keep accurate records of your overtime and you just may get them.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

WHERE/HOW/WHEN DO WE SIGN UP??? PLEASE ADVISE.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

AMEN AMEN AMEN.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

True. It is gross abuse. Pharma companies have worked people to the bone. If you are faking it, that's different. But those of us who make the calls and do everything else we are asked to become stress cases. The way that employees are squeezed and stretched is WRONG. They should be ashamed.

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

http://www.pharmaovertime.com/
Call em up I guess!

 

Re: Overtime Lawsuit Determines that pharmaceutical salesman not truly sales under FL

Are you serious? Pharma work is such an easy job that your statement further confirms to me what a bunch of entitled little brats you all are. Go get a real job and then I'll listen.