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Supreme Court Holds Pharmaceutical Sales Reps Are Exempt

By Shirley O. Lerner
September 25, 2012

The U.S. Supreme Court's recent decision in Christopher v. SmithKline Beecham Corp., No. 11-204, 2012 U.S. LEXIS 4657 (2012), was not only a landmark decision for the pharmaceutical industry, but also provided important guidance for the application of the outside sales exemption in other settings, the interpretation of all FLSA exemptions, and the deference to be given the Department of Labor's interpretation of its own guidelines.

Over the past several years, wage and hour litigation has exploded as employees have increasingly challenged whether their employers have properly classified them as exempt from the minimum wage and 40-hour overtime standards under the Fair Labor Standards Act (FLSA), 29 U.S.C. ” 201 et seq. The risk of improperly classifying employees can be significant because employers who fail to pay overtime properly may be liable for double the amount due for the past two years, plus the employees' attorney fees. If the violation is found to be “willful,” the statute of limitations increases to three years.

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