The Court said that the DOL's new interpretation is entitled to no deference at all because it would impose massive liability for conduct that occurred before the interpretation was announced, there had been no enforcement actions suggesting the industry was acting unlawfully, DOL gave no opportunity for public comment, and the interpretation is "flatly inconsistent" with the FLSA.

The FLSA definition of "sale" includes consignments, which do not involve a transfer of title. Although DOL regulations say that sales include the transfer of title, that does not mean a sale must include a transfer of title. The regulations also use the phrase "other disposition" which - in this unique regulatory environment - includes the work of pharmaceutical sales representatives. The representatives also bear all the exterior indicia of salesmen (average salaries exceeding $70,000, work that is difficult to standardize to a particular time frame, etc.)

The DISSENT reasoned that sales of drugs are made by pharmacists, not pharmaceutical sales representatives. The pharmaceutical sales representative neither make sales nor promote "their own sales." (The dissent agreed that the DOL's current views expressed in briefs are not entitled to any weight.)

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: 

• Brief for the Petitioners 
• Brief for Respondent  
• Reply Brief for Petitioners 
  
  
• Brief for the United States as Amicus Curia Supporting Petitioners 
• Brief of National Employment Lawyers Association and National Employment Law Project as Amici Curiae in Support of Petitioners 
• Brief Amicus Curiae for Medical Professional in Support of Petitioners 
• Brief of Certified Class of Pharmaceutical Representatives from Johnson & Johnson as Amici Curiae in Support of Petitioners 
• Brief of Pharmaceutical Representatives as Amici Curiae in Support of Petitioners 
• Brief for the Center for Constitutional Jurisprudence in Support of Respondent
• Brief for the Chamber of Commerce of the United States of America in Support of Respondent
• Brief for the Equal Employment Advisory Commission in Support of Respondent
• Brief for the Natoinal Federation of Independent Business Small Business Legal Center in Support of Respondent
• Brief for Pharmaceutical Research and Manufactuers of America (PhRMA) in Support of Respondent
• Brief for the Washington Legal Foundation, the Allied Education Foudation, and the CATO Institute in Support of Respondent

Certiorari Documents: 

• Petition for certiorari 
• Brief for respondent 
• Brief of Chamber of Commerce of the United States of America as Amicus Curiae in Support of Respondent 
• Brief of Pharmaceutical Research and Manufacturers of America (PhRMA) as Amicus Curiae in Support of Respondent 

• For Petitioners: Michael R. Pruitt; 40 North Center Street, Suite 200; Mesa, AZ  85201; mpruitt@jacksonwhitelaw.com; (480) 464-1111. 
• For Respondent: Paul D. Clement; Bancroft PLLC; 1919 M Street, N.W., Suite 470; Washington, DC  20036; pclement@bancroftpllc.com; (202) 234-0090; and Neal D. Mollen; Paul Hastings LLP; 875 15th Street, NW; Washington, DC  20005; nealmollen@paulhastings.com; (202) 551-1700.