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New York Misclassification Update: Pharmaceutical Sales Reps File Class Action Lawsuit for Overtime Pay

above-the-bar-logo-no12Pharmaceutical giant Novo Nordisk, Inc. (“Novo”) was hit this week with a $70 million class and collective action lawsuit alleging misclassification of its sale representatives as exempt employees. Two plaintiffs and a class of sales representatives, who are current and former employees of the Danish manufacturer, are seeking overtime pay and have charged Novo with not paying its sales employees overtime wages in compliance with New York and federal law. The action was filed in the U.S. District Court for the Southern District of New York.

The two pharmaceutical sales reps, McKenzie Stepe of New Jersey and Karen Woolen of Texas, have alleged that the company required them to work over 40 hours a week but did not pay them overtime wages in violation of the FLSA and New York Labor law. If you have been denied your rightful wages or overtime pay, call our attorneys to help you determine if you have an action under the FLSA or state law. Our attorneys have helped many employees recover their rightful compensation.

The lawsuit charges Novo with misclassifying its sales representatives as exempt salaried workers. The class of workers allege that they are non-exempt and should have been paid for overtime. Two classes of employees are defined in the complaint depending on where they worked. The FLSA class is made up of all sales employees who worked in any state or U.S. territory from March 2009 until the present while the New York State class includes all sales representatives employed at Novo in New York for at least one day from March 2006 to the present who do not opt out.

The FLSA requires that covered, non-exempt employees be paid at least minimum wage and overtime at a rate of at least one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in a workweek. The FLSA provides an exemption from both minimum wage and overtime pay for employees who are employed as bona fide executive, administrative, professional and outside sales representatives. In order to qualify for an exemption, an employee must meet certain requirements regarding their job duties and be paid a salary of at least $455 per week.

In order to qualify for an outside sales exemption, the employee’s primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities for which a client or customer will pay consideration, and the employee must be customarily and regularly engaged away from the employer’s place of business. A job title alone does not make an employee exempt. For example, giving an employee the title of a sales representative whose only job duty is to answer phone calls and greet clients does not qualify for an exemption.

Many large drug companies have been and many are being sued by their sales employees for overtime pay. Because the Circuit Courts have been coming up with different interpretations of the FLSA regarding this classification, the U.S. Supreme Court will be hearing arguments in April, 2012 on this issue in another case, Christopher v. SmithKline Beecham Corp. In SmithKline Beecham, the Ninth Circuit held that a pharmaceutical sales representative was an outside salesman and therefore exempt from overtime. Our attorneys will keep you informed on how the Supreme Court rules on this issue.

Misclassification of workers is a serious national problem that not only affects an employee from earning his rightful wages but also impacts every taxpayer. Our attorneys have helped many misclassified employees recover their rightful wages. Call our Wage & Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to discuss if you have an action for unpaid wages or overtime pay.

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Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.

Web Sources:

Christopher v. SmithKline Beecham Corp., scotusblog.com