GlaxoSmithKline Sales Rep Illinois Overtime

GlaxoSmithKline sales representatives who work in Illinois may have been misclassified as exempt from Illinois overtime and could be eligible for paid overtime for their work as Illinois GlaxoSmithKline sales representatives. Lawsuits involving Illinois pharmaceutical sales representatives have been filed, alleging pharmaceutical companies violated overtime laws by misclassifying Illinois pharmaceutical sales reps as exempt from overtime.

Under the Fair Labor Standards Act (FLSA), employees are entitled to overtime pay for working more than 40 hours in a workweek. However, employees who are involved in outside sales are typically considered exempt from overtime pay. That is because people involved in outside sales have unlimited earning potential due to their commissions—the more they sell, the more they can make.

For a long time, pharmaceutical sales representatives were considered exempt from overtime pay. They could be considered exempt on one of two counts: either as outside sales people or under the administrative exemption, if they have discretion and authority in their job.

Some lawsuits, however, resulted in the courts determining that some pharmaceutical sales reps are not exempt from overtime pay—that is, they should be paid overtime for their hours worked—because they do not fall under either the outside sales exemption or the administrative exemption.

A lawsuit was filed in Illinois against Abbott Laboratories, Inc., alleging that Abbott's pharmaceutical sales representatives should have been paid overtime for hours worked over 40 in a week. Abbott Laboratories defended itself, saying that its pharmaceutical sales representatives qualified for both the administrative exemption and the outside sales exemptions. The US District Court for the Northern District of Illinois disagreed with Abbott, finding that the sales rep's activities did not result in a sale or order and that they did not exercise sufficient discretion and independent judgment in their jobs.

A lawsuit filed against GlaxoSmithKline alleged that GlaxoSmithKline sales representatives should be paid overtime because they do not meet the requirements for overtime exemptions. The Ninth Circuit Court of Appeals (covering western states) found that GSK sales representatives are not entitled to overtime because they are defined as "salesmen," filling the requirement for outside sales exemption.

The judges in the GlaxoSmithKline sales representative lawsuit found that pharmaceutical salespeople earned compensation that made up to 41 percent of their gross income, making them ineligible for overtime pay.

This finding contradicts the Second Circuit Court of Appeals, which found in the Novartis sales representative lawsuit that Novartis sales representatives should be eligible for overtime pay because their job is not directly involved in sales. Novartis appealed that decision to the US Supreme Court, but the Supreme Court refused to hear the appeal, leaving the lower court's decision in favor of the sales representatives in tact.

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Last updated on May-10-11