Court Watch - POSTED: 2011/02/28 16:56
The U.S. Supreme Court refused to insulate the drug industry from having to pay overtime to thousands of sales representatives, turning away appeals from units of Novartis AG and Merck & Co.
The companies sought to overturn a federal appeals court’s conclusion that their salespeople are covered by a federal wage- and-hour law. The decision against the Novartis unit leaves the company with claims of as much as $100 million on behalf of 2,500 past and current employees.
Drugmakers are facing a wave of suits by sales representatives for overtime pay. More than a dozen suits have been filed, including cases against Johnson & Johnson, Bristol- Myers Squibb Co. and a GlaxoSmithKline Plc unit. Drug companies have long treated sales representatives as exempt from the overtime requirements, according to court papers filed by an industry trade group.
The lower court ruling “threatens untold costs in unforeseen liability,” the Pharmaceutical Research and Manufacturers of America argued in the Novartis case.
The rulings by the New York-based 2nd U.S. Circuit Court of Appeals came in two separate