Supreme Court Rules That Pharma Reps Are Exempt

Author:Mr David Barron
Profession:Cozen O'Connor

In what can only be called a refreshing display of common sense, the Supreme Court ruled 5-4 that pharmaceutical representatives are exempt outside salespeople. For those not following the case, the difficulty in analyzing such representatives under the exemption arises because the reps don't actually sell anything because prescriptions must be written by a doctor. The facts showed, however, that the reps made sales calls and were paid commissions based on the sales of the drugs within their territories, just like salespeople.

Perhaps the most important and far reaching part of the decision is the rejection of the Department of Labor's hypertechnical analysis of the term "sale" as being non-binding, and instead focusing on the practical reality that these employees are outside sales people for all intents and purposes. The majority summed up its opinion as follows: "Our point is that, when an entire industry is constrained by law or regulation from selling its products in the ordinary manner, an employee who functions in all relevant respects as an outside salesman should not be excluded from that category based on technicalities." The Court...

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