Littler Mendelson, P.C. • www.little r.com • 1.888.littler • info@lit tler.com
©2012 Littler Mendelson , P.C. All rights re served.
A S A P ®
A Timely Analysis of Legal Developments
Earlier this week, GlaxoSmithKline PLC (Glaxo), formerly known as SmithKline Beecham
Corporation, led its brief in the U.S. Supreme Court in
Christopher v. SmithKline Beecham
Corporation
, one of the only Supreme Court cases to address the overtime exemptions under
the Fair Labor Standards Act (FLSA), and the rst to address the criteria for the outside sales
exemption. At issue is whether pharmaceutical sales representatives (PSRs) qualify for the outside
sales exemption because pharmaceuticals are generally purchased by end-users at pharmacies,
which purchase from wholesale distributors. The Court’s decision may have far-reaching
implications, not only for the pharmaceutical industry, but also for other industries that depend
on representatives to call on customers at their place of business to generate sales, although the
actual sales orders are placed by customers through a centralized order and distribution center or
similar process. The case is also signicant because it may determine the extent to which courts
are required to defer to U.S. Department of Labor’s (DOL) changing interpretations of federal
employment statutes and regulations.
Petitioners’ Position
Petitioners Michael Shane Christopher and Frank Buchanan (Petitioners), former SmithKline PSRs,
are seeking to reverse the Ninth Circuit Court of Appeals’ decision1 holding that: (1) Glaxo’s PSRs
were properly classied as exempt under the “outside sales” exemption, and (2) the court was not
required to defer to the DOL’s
amicus brief
, on behalf of petitioners, interpreting the exemption.
PSRs Do Not Actually Sell
First, as to the outside sales exemption, Petitioners argue that PSRs are not engaged in sales
because they do not actually sell Glaxo products to anyone. Rather, Petitioners argue, PSRs
“promote” Glaxo products to healthcare providers. Petitioners claim that PSRs “provide medical
professionals who prescribe pharmaceuticals with the ‘details’ of pharmaceutical products, seeking
to educate the prescribers with the ultimate goal of inuencing their prescribing decisions.”
Petitioners also rely heavily on the fact that PSRs are prohibited by federal law from actually selling
pharmaceuticals. Moreover, Petitioners attempt to set the theme for their argument by throughout
their brief repeatedly referring to PSRs as “detailers” (an antiquated term in the industry with far
fewer sales-related connotations).
March 2012 Supreme Court to Decide Significant Case on the
Outside Sales Overtime Exemption
By Richard Black and Brad ley Strawn
