In the latest twist in the ongoing battle over whether sales reps should be paid overtime, a federal court in New Jersey last week ruled that an Alpharma rep is exempt from the overtime provisions of the Fair Labor Standards Act and, therefore, should not be paid overtime (Alpharma is now owned by King Pharmaceuticals).

The decision contradicts a US Labor Department brief filed recently in a Novartis case supporting overtime payments (see here) and, moreover, continues a very confusing trend in which different federal courts have come down squarely on either side of the issue, prompting some lawyers to say the debate is increasingly likely to end up before the US Supreme Court, even as drugmakers accelerate plans to eliminate more sales reps.

A primer: 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. In the case involving Alpharma, US District Court Judge Garrett Brown Jr. cited a recent case involving a Johnson Johnson/Ortho-McNeil rep, who was denied overtime by the US Court of Appeals for the Third Circuit (see this). Interestingly, in his ruling, he doesn’t refer to the recent Labor Department brief, and acknowledges the case “lacks the direct testimony of the plaintiffs regarding their autonomy and independent nature, (but) the underlying facts differ little from the facts in (the J&J lawsuit).”

Brown goes on to explain that sales rep Tito Jackson met three conditions cited by the drugmaker: he was compensated on a salary or fee basis at a rate of not less than $455 per week; his primary duty is performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and his primary duty includes exercising discretion and independent judgment “with respect to matters of significance.”

Hat tip to Bnet