The US Department of Labor (DOL) filed an amicus brief with a federal appeals court in support of Novartis sales reps fighting for overtime compensation.
DOL filed the brief after a district court in New York “committed legal error” by classifying Novartis reps as “outside sales,” a designation exempting them from overtime pay under the Fair Labor Standards Act.
Sales representatives on a detail do not qualify as outside sales personnel, since they don't make direct sales as defined by the exemption, according to the DOL brief.
“The reps do not sell or take orders for Novartis' drugs; rather, they provide information to target physicians about Novartis' drugs with the goal of persuading the physicians to prescribe those drugs to their patients,” the brief stated.
“Although the reps' duties bear some of the indicia of sales…the fact that the reps do not actually ‘make sales' conclusively demonstrates that the position is not that of an outside salesperson,” according to the brief.
DOL said the reps don't qualify for an administrative exemption either—a second provision in the law that would prevent overtime pay—since reps are obligated to adhere to a “core message” provided by Novartis, such as clinical studies, brochures or other scripted sales materials.
While DOL concedes that reps do exercise some discretion when it comes to meeting with physicians—specifically what time of day to visit a physician and how to best execute their presentations, for example –“they do not exercise discretion and independent judgment with respect to matters of significance,” according to the brief.
Over 2,500 reps working for Novartis in New York, California and other states comprise the plaintiffs in the case. The case will be held in the 2nd US Circuit Court of Appeals.