Schaefer-LaRose v. Eli Lilly & Co.

Plaintiffs in consolidated cases claim that, during their tenures as pharmaceutical sales representatives employed by Lilly and Abbott, they were misclassified as exempt employees and denied overtime pay in violation of the Fair Labor Standards Act, 29 U.S.C. 201-19. The employers argued that the administrative exemption and the outside sales exemptions removed the sales representatives from overtime protections. The two district courts reached opposite conclusions. After considering an amicus brief from the Department of Labor, the Seventh Circuit held that, under regulations of the Department of Labor, the pharmaceutical sales representatives are classified properly within the administrative exemption to overtime requirements. The court did not address the outside sales exemption. The sales representatives were compensated on a salary basis and their work is directly related to the general business operations of the pharmaceutical companies; they were required to exercise a significant measure of discretion and independent judgment, despite the constraints placed on them, and on all representatives of the pharmaceutical industry, by the regulatory environment in which they work. View "Schaefer-LaRose v. Eli Lilly & Co." on Justia Law