Just last August, the U.S. Court of Appeals for the 2nd Circuit issued a ruling that sent shock waves through segments of the healthcare industry. Then, as affected employers began responding to that decision, the 9th Circuit reached an apparently contradictory decision that may have raised more questions than it answered.

Dueling Decisions

In the first, the 2nd Circuit held that pharmaceutical sales representatives (PSRs) were not exempt from overtime as outside sales persons under the Fair Labor Standards Act (FLSA). In Re Novartis Wage & Hour Litigation. In making its decision, the court relied heavily on a Department of Labor legal brief, which strongly urged a finding that the PSRs were not exempt as outside sales persons.

The DOL's contention that PSRs were not exempt caught the industry off-guard and seemingly contradicted the position taken by the DOL for over 70 years. Since the inception of the outside-sales exemption in 1938, the DOL had remained silent on the issue and acquiesced to findings that PSRs qualified for the outside sales exemption.