The U.S. Supreme Court today rejected an interpretation by the Department of Labor (DOL) that pharmaceutical sales representatives are hourly employees subject to overtime day.
The 5-4 decision, in Michael Shane Christopher, et al., Petitioners v. SmithKline Beecham Corp. dba GlaxoSmithKline, restores the DOL's position on the issue that existed for decades prior to 2009, when a newly agenda-driven DOL sought to make pharmaceutical representatives into hourly employees because they did not actually sell, or transfer, property to a buyer but merely promoted the product.
The justices' prevailing opinion observes:
The DOL’s current interpretation—that a sale demands a transfer of title—is quite unpersuasive. It plainly lacks the hallmarks of thorough consideration. Because the DOL first announced its view that pharmaceutical sales representatives are not outside salesmen in a series of amicus briefs, there was no opportunity for public comment, and the interpretation that initially emerged from the DOL’s internal decision-making process proved to be untenable. The interpretation is also flatly inconsistent with the FLSA. The statute defines 'sale' to mean, inter alia, a 'consignment for sale,' and a 'consignment for sale' does not involve the transfer of title.
The Supreme Court decision affirms an earlier ruling by the 9th U.S. Circuit Court of Appeals. The Supreme Court heard arguments on the appeal in April 2012.