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High court: No OT pay for drug sales reps

he Supreme Court ruled against sales representatives for

he Supreme Court ruled against sales representatives for a pharmaceutical company yesterday. The court is also expected to soon rule on the Obama administration’s health plan. (March 31, 2012) Credit: Getty Images

The Supreme Court has ruled that sales representatives for pharmaceutical companies do not qualify for overtime pay under federal law, a big victory for the drug industry.

The 5-4 decision Monday, reflecting the court's conservative majority, will affect the roughly 90,000 people who try to persuade doctors to prescribe certain drugs.

Two salesmen who once worked for drugmaker GlaxoSmithKline filed a class-action lawsuit claiming that they were not paid for the 10 to 20 hours they worked each week, on average, outside the normal business day. Their jobs required them to meet with doctors in their offices, but also to attend conventions, dinners, even golf outings.

Many sales jobs are exempt from overtime pay under the Fair Labor Standards Act. But unlike typical salespeople who often work on commission, pharmaceutical sales representatives cannot seal a deal with doctors. Federal law, in fact, forbids any binding agreement by a doctor to prescribe a specific drug.

Justice Samuel Alito, writing for the majority, said the drug sales reps' "end goal was not merely to make physicians aware of the medically appropriate uses of a particular drug. Rather, it was to convince physicians actually to prescribe the drug in appropriate cases." Chief Justice John Roberts and Justices Anthony Kennedy, Antonin Scalia and Clarence Thomas joined with Alito.

In dissent, Justice Stephen Breyer said the reps do not consummate sales and so should be allowed to claim overtime. Breyer referred to the reps as "detailers," as they are known in the industry. "The detailer's work, in my view, is more naturally characterized as involving 'promotional activities designed to stimulate sales . . . made by someone else,' " Breyer said, quoting from federal regulations.

Justices Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor signed Breyer's dissent.

The Obama administration backed the sales reps and argued that they do not make sales, as the law requires for a job to be exempt from overtime.

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