Tuesday, June 17, 2008, 2:18 PM

FLSA Suits by Drug Reps Face a New Challenge, Maybe They Aren't Outside Salespeople, But They May Be Exempt Administrative Employees!

Posted by Kim Licata
The United States District Court for the Southern District of New York has recently ruled against a pharmaceutical rep plaintiff Beth Amendola's quest to notify other reps of her pending FLSA suit against pharmaceutical giant Bristol-Myers Squibb Co. ("BMS") because the court found that it appeared that drug sales reps may fall under the administrative employee exemption of the FLSA.

Amendola worked as a pharmaceutical rep for BMS for 8 years. During her time with BMS, Ms. Amendola's principal job duty involved encouraging provider to prescribe BMS products to patients and appropriately distribute drug samples. She was supplied with a list of drugs to promote and a list of medical providers to visit by BMS. Her promotion of BMS products was principally through customized presentations based in part on data provided by BMS about the particular providers prescription habits and practice needs. She visited the providers during the day, preparing for each visit the night before.

By June 2007, Ms. Amendola had enough of her schedule and filed suit against BMS alleging BMS failed to pay her overtime wages for her hours over 40 per week. As part of the discovery of this suit, Ms. Amendola collected information for 350 pharmaceutical representatives and then wished to send notice to them of her lawsuit. The court found such notice was not appropriate under its interpretation of the FLSA's exemptions.

In a mixed bag, the court rejected a commonly offered exemption's applicability to drug reps, while the court offered Big Pharma hope for the applicability of another exemption, the administrative exemption. The court found that the outside sales exemption did not apply to BMS drug reps principally because the reps' promotion of the BMS products did not involve the "sale" of goods or services or the use of purchase orders to sell products. However, the court reasoned that the administrative exemption well apply to drug reps in much the same way that the exemption was held to apply to "medical detailists" for drug companies in a 1945 DOL opinion letter [click here for the text of the 1945 opinion letter]. The applicability of this exemption, as noted previously in this blog, depends on the employee's ability to independently exercise judgment and discretion in his or her job. Because of the likelihood that BMS would succeed in arguing the applicability of the administrative exemption, the court refused Ms. Amendola's request to give notice.

Challenging the outside salesperson exemption for drug reps was a topic of this blog previously on March 27, 2008, and can be read by clicking here.

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