Big Supreme Court Win For Pharmaceutical Industry

The U.S. Supreme Court ruled today that pharmaceutical sales representatives employed by GlaxoSmithKline were exempt from overtime pay under the federal Fair Labor Standards Act's "outside salesman" exemption. The Court's decision in Christopher v. Smithkline Beecham Corp. resolves conflicting views expressed by a number of federal courts.

For a more-complete discussion of this development, read our Legal Alert.

Ultimately, the Court's ruling dealt with whether a GSK sales representative was "making sales" within the meaning of the U.S. Labor Department's "outside salesman" exemption regulations. This necessitated the Court's interpretation of the term "sale" as it is used in the FLSA. The relevant Labor Department regulations contain additional requirements for exempt status, so employers should not take the Court's ruling to be broader than it is (especially those outside of the somewhat unique setting of the pharmaceutical industry).

Also, employers should keep in mind that the Court's decision did not involve the requirements or parameters of any sales- or selling-based exemptions under the wage-hour laws of states or other jurisdictions.

The Court refused to defer to USDOL's views expressed in a friend-of-the-Court brief to the effect that the sales...