Supreme Court Issues Long-Awaited Decision In Christopher v. SmithKline Beecham Corp

The U.S. Supreme Court has issued a long-awaited decision in Christopher v. SmithKline Beecham Corp., holding in a 5-4 decision that pharmaceutical sales employees are exempt outside salespeople. The decision may be read here. The case is significant for several reasons.

The central issue in Christopher was whether the pharmaceutical sales representatives were actually involved in "sales." The U.S. Department of Labor in "friend of the court" briefs has taken the position in recent years that an employee is making a sale only where the employee is involved in the transfer of title to customers. Pharmaceutical reps are "only" obtaining informal commitments from doctors to prescribe certain drugs. The Court rejected the DOL's interpretation, finding it was not supported by the statute.

The decision also is significant in that it reminds employers that not every administrative decision will be supported by the courts. In a period where the National Labor Relations Board is scrutinizing social media policies, and the Equal Employment Opportunity Commission is attacking background checking procedures, it is worth remembering that these interpretations of federal agencies may not stand up to judicial scrutiny in the medium term. No employer wants to be the "test case," but employers should discuss this aspect of administrative guidance with counsel when formulating their compliance strategies...