Term: 2011
Docket: 11-204
Michael Shane Christopher, Et Al., Petitioners v. Smithkline Beecham Corporation Dba Glaxosmithkline
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11-204 CHRISTOPHER V. SMITHKLINE BEECHAM CORP. DECISION BELOW: 635 F.3d 383 CERT. GRANTED 11/28/2011 QUESTION PRESENTED: The outside sales exemption of the Fair Labor Standards Act exempts from the overtime requirements of the Act "any employee employed ... in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary ...)." 29 U.S.C. § 213(a)(1). The Secretary of Labor has implemented various regulations that "define and delimit" the outside sales exemption and, filing as amici in this and other related matters, has interpreted these regulations to find the exemption inapplicable to pharmaceutical sales representatives. A split exists between the Second and Ninth Circuits concerning whether this interpretation is owed deference and whether the outside sales exemption of the Fair Labor Standards Act applies to pharmaceutical sales representatives. The questions presented are: (1) Whether deference is owed to the Secretary's interpretation of the Fair Labor Standards Act's outside sales exemption and related regulations; and (2) Whether the Fair Labor Standards Act's outside sales exemption applies to pharmaceutical sales representatives. LOWER COURT CASE NUMBER: 10-15257
The U.S. Supreme Court case Michael Shane Christopher, et al., v. SmithKline Beecham Corporation DBA GlaxoSmithKline in 2011 revolved around the issue of overtime pay for pharmaceutical sales representatives under the Fair Labor Standards Act (FLSA). The petitioners, Michael Shane Christopher and Frank Buchanan Jr., were former sales reps who sued their employer, GlaxoSmithKline (GSK), arguing that they should have been paid overtime because their primary duties did not involve "sales" as defined by FLSA. GSK countered that its reps were exempt from FLSA's overtime-pay requirements due to being outside salespersons or administrative employees. The court ruled in favor of GSK with a 5-4 decision stating that although pharmaceutical reps do not close traditional sales deals, they are involved enough in selling activities to be classified as outside salespeople under FLSA regulations.
In the dissenting opinion for the case of Michael Shane Christopher, et al. v. SmithKline Beecham Corporation DBA GlaxoSmithKline, Justice Breyer argued that pharmaceutical sales representatives should be classified as outside salespeople and thus exempt from overtime pay under the Fair Labor Standards Act (FLSA). He disagreed with the majority's interpretation of "sales," arguing that it was too narrow and did not take into account industry-specific practices in which a sale can occur without a formal transfer of title. Furthermore, he contended that these employees were hired for their sales experience and skills, received training in selling techniques, worked away from office premises without direct supervision most of their time while promoting specific products to doctors with an aim to convince them to prescribe those drugs - all characteristics typical of an outside salesman role according to FLSA regulations. Therefore, they should qualify for exemption from overtime pay requirements.
