Outside ? Salespersons ?Of ?Prescription?Pharmaceuticals Exempt Under The FLSA.
The? Plaintiffs ?were ?employed ?as ?outside salesmen selling pharmaceuticals for SmithKline Beechman. ?Plaintiff brought suit alleging that he was not paid overtime consistent with the Fair Labor Standards Act ?(FLSA).?? ?The? Defendant claimed they were exempt.
The Plaintiffs sold prescription drugs by calling on physicians and attempting to convince them to prescribe the company?s drugs. ?Each salesperson is responsible for a particular ?drug bag? of medications.?? Each salesperson carried a small sample of drugs to distribute to physicians and they have no direct contact with patients.?? No drugs were sold directly to patients.?? Plaintiffs visited?? between?? 8-10? ?physicians?? each?? day between the hours of 8:30a.m and 5:00 p.m. Plaintiffs claimed that they worked an additional?20 hours a week outside normal work hours for which they received no overtime pay. ?Plaintiffs received ?salary? and ?incentive ?based compensation.
The Defendant claimed that Plaintiffs were exempt under the ?outside salesman? provision of the FLSA, or alternatively under the ?administrative ?exemption? ?29 ?U.S.C. ?Section?213(a)(1).?? Plaintiffs argued that they were not selling anything, only promoting the sales. ?The Department of Labor filed an amicus brief supporting ?the ?Plaintiff?s? position.?? ?The ?trial court ruled that the DOL?s current interpretation was inconsistent with the statutory language and its?? prior?? pronouncements,? ?and?? also? ?defied common sense. The Ninth Circuit agreed.
The Ninth Circuit concluded that it owned no deference ?to ?the ?Secretary? of ?Labor?s interpretation,?? and?? that?? its?? interpretation?? was clearly wrong.?? ?According? to ?the ?Ninth ?Circuit: ?An agency does not acquire special authority to interpret its own words when, instead of using its expertise and experience to formulate a regulation, it has elected merely to paraphrase the statutory language.? (quoting Gonzales v. Oregon, 546 U.S.?243, 257 (2006)). ?Moreover, the court found that the Secretary?s interpretation favorable to Plaintiffs was ?clearly? erroneous ?and ?inconsistent ?with ?her own interpretations.
The court ruled that the Plaintiffs? argument was inconsistent with ?the structure and realities of the heavily regulated pharmaceutical industry,? which the court described in considerable detail. ?Plaintiffs? argument also fails to account for the fact that the ?relevant ?purchasers? in the pharmaceutical industry, and the appropriate foci of our inquiry, are not the end-users of the drug but, rather, the prescribing physicians whom they importune frequently.?
The Ninth Circuit considered and disagreed with a holding of the Second Circuit Court of Appeals, which considered that same issue, the same DOL interpretation,??? ?and??? ?ruled??? ?that??? ?prescription ?pharmaceutical salesmen are not exempt wit meaning of the FLSA. ?See In re Novartishin the Hour Litig, 611 F.3d 141 (2d Cir. 2010). now exists a split in the circuits.
Christopher v. SmithKline Beecham Corpo