The U.S. Supreme Court has ruled that pharmaceutical sales representatives are not entitled to overtime pay under the federal Fair Labor Standards Act (FLSA), affirming the Ninth Circuit Court’s decision.

What happened? The petitioners, former GlaxoSmithKline sales representatives, filed a lawsuit claiming they worked 40 hours during normal business hours and an additional 10 to 20 hours attending events and performing other miscellaneous tasks.

Under the FLSA, employers must pay overtime to employees who work in excess of 40 hours per week. However, the law exempts certain kinds of jobs—including outside sales personnel—from overtime requirements.

The petitioners filed suit, alleging their employer violated the FLSA by failing to compensate them for overtime. GlaxoSmithKlein requested a summary judgment, arguing that petitioners were “outside salesman”, and therefore exempt from the FLSA’s overtime compensation requirement.

What is outside sales exemption? Outside sales personnel are exempt from both minimum wage and overtime requirements. There is no minimum salary requirement for the outside sales personnel exemption. To qualify for the outside sales personnel exemption, an employee must:

• Have a primary duty that consists of making sales or obtaining orders or contracts for services or the use of facilities for which a consideration will be paid by the client or customer
• Customarily and regularly work away from the employer's place or places of business

U.S. Supreme Court ruling. In a 5-4 vote, the U.S. Supreme Court determined that “outside salesman,” as defined by Department of Labor (DOL) regulations, includes pharmaceutical sales representatives “whose primary duty is to obtain nonbinding commitments from physicians to prescribe their employer’s prescription drugs in appropriate cases.”

Update: For more information on this ruling, read Supreme Court Says No Overtime for Pharma Sales Reps.

Christopher ET AL. v. SmithKline Beecham Corp., DBA GlaxoSmithKline ( Opinion )