Supreme Court rules on pharmaceutical sales reps under Fair Labor Standards Act

[JURIST] The US Supreme Court [official website] ruled 5-4 [opinion, PDF] Monday in Christopher v. SmithKline Beecham Corp. [SCOTUSblog backgrounder] that pharmaceutical sales representatives (PSRs) qualify as outside salespeople under the Fair Labor Standards Act (FLSA) [text], making them ineligible for overtime under the act. The Department of Labor (DOL) had stated that PSRs are not outside salespersons and can thus apply for overtime. This decision and whether the court must defer to it is as a valid departmental regulation interpretation were also in question in this case. In the majority decision, Justice Samuel Alito said that the DOL's history and definitions are not consistent with its position on PSRs. In disregarding the interpretation of the DOL, he noted:

In this case, there are strong reasons for withholding the deference that Auer generally requires. Petitioners invoke the DOL's interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation was announced. To defer to the agency's interpretation in this circumstance would seriously undermine the principle that agencies should provide regulated parties "fair warning of the conduct [a regulation] prohibits or requires."
Justice Stephen Breyer dissented from the opinion, concluding that the PSRs duties do not qualify as those of "outside salespeople" even under well-established definitions of the DOL. His opinion was joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.

The court heard oral arguments [JURIST report] in the case in April. The Solicitor General argued for the definition of sales presented in their amicus brief [text, PDF], which the court noted differed from the arguments they made to the Ninth Circuit. Justice Anthony Kennedy particularly criticized the DOL's updates of its regulations: "[I]t's gone on for 70 years, and you're—instead of doing a regulation, amended regulation, as Justice Breyer indicates, you're filing amicus briefs quietly in different—different courts. It seems to me that's not nearly as fair or straightforward or as candid as—as an agency ought to be." Last summer, the court ruled on another aspect of FLSA's wording [JURIST report]: that the language "filed any complaint" refers to both oral and written complaints.

 

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