re: #215 iossarian

Speaking of health care costs and benefits, the Supreme Court issued a ruling on whether drug reps are classified as inside or outside salespersons under the Fair Labor Standards Act. In a 5-4 ruling (Alito, joined by Chief Justice Roberts, Scalia, Kennedy and Thomas) found that the reps were outside salespersons and not entitled to certain additional benefits, including overtime:

In his opinion, Alito noted the DOL’s vague language and problematic definitions, but he also wrote that the two GSK drug reps, who earned an average of more than $70,000 a year, were hardly the kind of employees that the Fair Labor Standards Act was intended to protect.

David Finegold, a senior vice president at Rutgers University with an expertise in the biopharmaceutical industry, said the opinion was not surprising given the Supreme Court’s recent spate of split decisions along the same idealogical lines.

“The historic precedent is that they (sales reps) haven’t been subject to overtime and the court was essentially saying, we’re staying with the status quo,’’ Finegold said.

The industry’s leading trade group, Pharmaceutical Research and Manufacturers of America, had argued before the Supreme Court in April that an opinion against GlaxoSmithKline would result in pharmaceutical companies paying out billions in back overtime pay.

Matthew Bennett, the trade group’s senior vice president, expressed support for the court’s decision. “The Supreme Court’s opinion is consistent with the longstanding sales practices of our member companies,’’
he said yesterday in a statement.