Federal Court Determines Pharmaceutical Sales Representatives Are Not "Outside Salesmen"

Zev Antell
Attorney
(866) 735-1102 Ext 381
Posted by Zev AntellApril 02, 2009 6:33 PM

On March 30th, a Connecticut Federal court found that the FLSA’s “Outside Salesman” exemption did not apply to Pharmaceutical Sales Representatives. In issuing its ruling the court resisted the temptation to concede to legal fictions created by other courts in order to justify withholding overtime compensation. Without getting too technical, at the core of the ruling is the fact that Pharmaceutical Sale Representatives do not actually sell anything. In fact, federal and state law precludes them from making the very sales that would make them exempt. Rather, their role is to inform health care providers about the benefits of a given drug and to attempt to convince those professionals to write prescriptions. In order to be exempt under the FLSA as an outside salesman, you first have to actually sell something. This decision means that thousands of Pharmaceutical Sales Representatives (sometimes referred to as “Drug Reps” or “Drug Representatives”) may be entitled to countless hours of previously unpaid overtime compensation. Overtime compensation is calculated as one and a half times your regular rate of pay for those hours beyond forty worked in a single week. Typically, Drug Reps make a good living, but the work requires long hours, often well beyond forty in a single week. Thus, it is not a stretch to think individual Drug Reps might be able to recover tens of thousands dollars for unpaid overtime accrued over just a couple of years.

For those readers interested in reading the court’s 3/30/09 opinion in Kuzinski v. Schering Corp., it is currently available at 2009 U.S. Dist. LEXIS 25702.

15 Comments

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Senior Rep
Posted by Senior Rep
April 08, 2009 7:41 AM

This is an interesting concept. Unfortunately, Big Pharma can fire me and fight this until my grandchildren are dust.

Dan
Posted by Dan
April 08, 2009 8:33 AM

Great post, and very informative.

I'm glad the CT Fed. Court acknowledge what I, as an ex-drug rep for over 10 years, have known for some time: pharmaceutical representatives do not sell anything.

However, it is a false perception that drug reps. work over 40 hours a week. Throughout my career, I possibly may work a 20 hour week with a pharma company as a drug rep, or less. Most drug reps have a similiar work week with 20 hours applied to their vocations.

So the overtime issues, while legally valid, are not realistic. Pharmaceutical represenatives do not work overtime, and any who conclude this are basing their conclusion on ignorance.

DJ
Posted by DJ
April 08, 2009 9:42 AM

Hey Dan:
Working 20 hours per week was stealing money from your employer. I, too, am a veteran of the pharma sales industry and I don't recall my Big Pharma employer ever telling me that LESS than 8-5 pm hours was acceptable. I can only assume that your 20 hour work week is why you are an ex-rep.

DJ
Posted by DJ
April 08, 2009 9:42 AM

Hey Dan:
Working 20 hours per week was stealing money from your employer. I, too, am a veteran of the pharma sales industry and I don't recall my Big Pharma employer ever telling me that LESS than 8-5 pm hours was acceptable. I can only assume that your 20 hour work week is why you are an ex-rep.

JB
Posted by JB
April 08, 2009 10:26 AM

Hey DJ:

Dan is correct. The article was very informative and it's a little harsh to say he wa stealing from his company. Your head is up your butt if you claim to be working 40+ hours in this position. Your claiming that your in your territory at 8am and you don't leave your territory until 5pm or later. I must say, that you must have found a very comfortable park bench because there is no way you're the one rep in the industry that puts in a 40+ work week. D-E-N-I-A-L! You must be in line for the CEO position by now. Good luck with that Dan...and yes, there is life after being a Pharm Rep.

DJ
Posted by DJ
April 08, 2009 12:31 PM

Hey JB:
Hit a nerve, didn't I? You and Dan both were stealing money from your employers by not working a full work-week. Talk about denial! I call taking money from an employer without earning it STEALING. I am sure your company did not agree that working part-time hours without their knowledge and taking full-time pay was acceptable.

RR
Posted by RR
April 08, 2009 5:15 PM

No wonder you work 8 to 5... you're busy during those hours posting back and forth with JB and Dan

Zev AntellInjuryBoard Attorney Member
Posted by Zev Antell
April 08, 2009 5:51 PM

Glad to see the article created some lively dialogue. I think it is safe to say that there are plenty of drug reps working in excess of 40 hours a week, otherwise this would be a non-issue. That said, I don’t mean to suggest that some folks work less than that. Here’s my simple analysis; if you’re a drug rep and you work more than 40 hours a week, you and your coworkers may have a case for substantial unpaid overtime. That case could be brought individually or as collective action (very similar mechanism to a class action). If you work less than 40 hours a week, than you don’t have a case and your employer is in compliance with the FLSA. If any of you have questions about your situation, please feel free to contact me through the email contact provided above

DJ
Posted by DJ
April 08, 2009 5:52 PM

Retired at 55 after 32 years in the business. That's what you get for working 8-5 pm and being excellent at what you do!

Senior Rep
Posted by Senior Rep
April 08, 2009 7:27 PM

Reps who claim that they don't work 40+ hours per week are usually out of the industry after a few years. After 26+ years, I have learned the only way to do this job is to work at least 40 hours. Also, I have had many, many overnights over the years, are they included? They would be easy to count - just look at expense reports. Reps who scoff at the hours required are one reason management doesn't respect us.

Successful rep
Posted by Successful rep
April 08, 2009 10:36 PM

I've been in the industry for 7 years, won every award offered, and kill numbers every year...I work 50+ hours/week when I'm given a new territory, then once the relationships are established, 25-30 is fine to maintain and grab business if done correctly. Plus, since dinners without speaker programs are now illegal, evenings will be cut back to less than 5-10 per year. Plus, if you do work a night, you just start a little later the next day...and it all equals out. Reps that work 40+ hours in todays market (use to be different) are inefficient and trying to fufill their internal need to be 'productive.'

successful rep
Posted by successful rep
April 08, 2009 10:39 PM

oh, and I forgot, any 'sales' job isn't about how many hours you work...it's about hitting revenue numbers and quota. I'd take a rep at 110% of quota working 20 hrs a week over the guy who works 50+ hours and is at 100% of quota...

I think the argument you guys are having is the exact point they make in the article...drug reps (and I'm one of 'em) are NOT salesmen...that's why most measure their work in hours, not productivity (quota attainment).

successful rep
Posted by successful rep
April 08, 2009 10:57 PM

Hey successful rep:
I am sure your company's policy is not to allow reps to work whatever hours they want as long as they deliver their numbers. I subscribe to the code of ethics that says if you take something from someone without their permission - in your case fewer work hours than 8-5 pm - it is stealing. If you want to work the hours you deem appropriate your best option is an independent rep. It is your business, you decide your work hours and you probably will make more money.

successful rep
Posted by successful rep
April 09, 2009 7:06 AM

you're silly...you should go work for the government. For-profit corporations are about results, not time and checking boxes.

It's reps with the '8-to-5' mindset and not the entreprenurial spirit that has ruined this field.

Senior Rep
Posted by Senior Rep
April 09, 2009 7:33 AM

Correction -- successful rep -- marketing has ruined this field.

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