J&J Sales Rep Denied Overtime Pay By Court
5 CommentsBy Ed Silverman // February 3rd, 2010 // 9:19 am
An appeals court upheld a decision in favor of Johnson & Johnson in a lawsuit alleging the drugmaker misclassified sales reps as exempt from overtime pay. The U.S. Court of Appeals for the Third Circuit ruled that Patty Lee Smith, a former sales representative for J&J’s Ortho-McNeil unit, wasn’t due overtime because she wasn’t exempt from the overtime provisions of the Fair Labor Standards Act.
The FLSA’s overtime compensation requirement doesn’t apply to employees who work as outside salespeople, but the law does require employers to pay overtime for hours worked beyond 40 hours a week, unless a FLSA exemption applies. What are those exemptions? If an employee’s primary duty is to obtain orders or contracts (as defined by the statute) and regularly does so away from the employer’s place of business. Drugmakers argue their sales reps are, indeed, outside salespeople who close sales because the primary customer is the physician.
There are a number of lawsuits over this issue in which reps argue that a direct sale doesn’t occur because meds are actually purchased by patients and hospitals, which receive the drugs from wholesalers. They received some support in October, when the US Labor Department filed an amicus brief in case involving Novartis reps, saying overtime should be paid (see here). Nonetheless, this is the latest setback for reps (see here).
As for Smith, she worked for McNeil Pediatrics in 2006, marketing the Concerta attention deficit disorder drug. She was given a list of target docs and told her to complete an average of ten visits per day, visiting every doc on her list at least once each quarter, according to court documents. J&J gave her a budget for the visits and the money could be used to take docs to lunch or to sponsor seminars.
Smith worked off of a prepared message provided by J&J, although she had some discretion. And J&J gave her pre-approved visual aids and did not permit her to use other aids. In all, she claims she worked that, despite a degree of freedom, she worked more than 40 hours and was sometimes accompanied by a supervisor. Nonetheless, the court upheld summary judgment in J&J’s favor (here is the order).
pharmavet
Any rep whos even working a 40 hour week is stretching it. I don’t include time waiting for their office order at Quizno’s.
Ana
Help making February 7 “International Day in Memory of SSRI Fatalities”
You just have to join Bloggers Unite:
There are more at my blog but explanations are all at Bloggers Unite.
February 7 was the day Traci Johnson was found dead at Eli-Lilly’s facilities during Cymbalta clinical trial for urinary incontinence.
It was in 2004.
Thank you!
Ana
JimK
I know absolutely nothing about pharmaceutical sales but I doubt very much that any sucessful sales rep is working less than 40 hours per week.
JimK
The title of this piece is misleading; Smith was not denied FLSA coverage because she is a sales rep but was denied because she fell under the category of administrative employee. The court left the sales rep issue open.
Rich
After more than 25 years as a pharma representative I just laugh at the court.
1) You work more than a 40 hour week when you take into account calls on “targeted” doctors.
2) You do not get orders except in the old days when you sold new products to independent drug stores. Not many of those around.
3)It seems like J&J wants it both ways a) they give the representative some discresion in what they can say.. doesn’t that leave the company open for off label promotion, b) but they have a detail piece that they use and PI.
4) Gave money for meetings (at night) with Doctors or Grand Rounds.. The rep does not do the talking but rather some “expert” sells the doctors.
5)At this point I would hate to be a new rep. as they do not have relationships with the doctors (sometimes they do not even know what they look like) and all they do is drop samples and get a signature. Move on to the next call on an office.