NOVARTIS OVERTIME SETTLEMENT

Novartis, one of the world’s largest pharmaceutical companies, has agreed to pay a staggering $99 million to resolve a class action brought by sales representatives for unpaid overtime. This very issue, of whether pharmaceutical sales representatives are entitled to overtime is scheduled to be decided by the United States Supreme Court later this year. These cases revolve around the issue of the administrative and outside sales overtime exemptions. In the Novartis case, the company won summary judgment on the exemption issue at the District Court level. However, the Second Circuit reversed on appeal, finding the sales representatives not exempt and thus entitled to unpaid overtime. The Supreme Court will have to rule on the outside sales exemption, which will be interesting, since pharmaceutical salespeople do not sell any products. Sales people merely “pitch” the products to doctors, who in turn, prescribe the drugs to patients. We will update you following the Supreme Court’s ruling, which will affect overtime eligibility for all salespeople nationwide.