Christopher v. SmithKline Beecham - update - LawMemo Employment Law Blog

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Christopher v. SmithKline Beecham - update
February 09, 2012 by Ross Runkel at LawMemo

Christopher v. SmithKline Beecham Corp. (11-204)
Issue: Whether pharmaceutical sales representatives were exempt from FLSA overtime-pay requirements as "outside salesmen."

Christopher, a pharmaceutical sales representative (PSR), sued the employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay overtime. The trial court granted the employer's motion for summary judgment and denied Christopher's motion to amend the judgment based on the trial court's failure to consider an amicus brief filed by the Secretary of the Department of Labor (DOL). The 9th Circuit affirmed. The issue on appeal was whether Christopher was an "outside salesmen" exempt from the FLSA's overtime-pay requirement. The court found he was exempt.

With respect to the Secretary's appearance as amicus supporting Christopher, the court concluded it owed no deference to the Secretary's current interpretation of the regulations and disagreed with that interpretation. The court found the regulations merely "parrot" section 3(k) of the FLSA and, as such, acquired no special authority by paraphrasing the statutory language. Gonzales v. Oregon, 546 US 243, 257 (2006). In view of many similarities between PSRs and salespeople in other fields, pharmaceutical industry norms, and the acquiescence of the Secretary over the last seventy-plus years, the court could not accord even minimal Skidmore deference to the position expressed in the amicus brief.

[In contrast to the 9th Circuit, the 2nd Circuit adopted the Secretary's position that PSRs did not meet the requirements of the outside sales exemption "when an employee promotes to a physician a pharmaceutical that may thereafter be purchased by a patient from a pharmacy ... the employee does not in any sense make a sale." In re Novartis Wage & Hour Litigation, 611 F3d 141 (2d Cir. 2010).]

Case below: Christopher v. SmithKline Beecham Corp (9th Cir 02/14/2011)
Official docket sheet
Certiorari granted: November 28, 2011.
Oral argument: Monday, April 16, 2012.

Questions presented in petition for certiorari:

The outside sales exemption of the Fair Labor Standards Act exempts from the overtime requirements of the Act "any employee employed... in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary .)." 29 U.S.C. § 213(a)(1). The Secretary of Labor has implemented various regulations that "define and delimit" the outside sales exemption and, filing as amici in this and other related matters, has interpreted these regulations to find the exemption inapplicable to pharmaceutical sales representatives. A split exists between the Second and Ninth Circuits concerning whether this interpretation is owed deference and whether the outside sales exemption of the Fair Labor Standards Act applies to pharmaceutical sales representatives.

The questions presented are:

(1) Whether deference is owed to the Secretary’s interpretation of the Fair Labor Standards Act’s outside sales exemption and related regulations; and

(2) Whether the Fair Labor Standards Act’s outside sales exemption applies to pharmaceutical sales representatives.

Briefs on the merits: