Employment Alert: Second Circuit’s Novartis Ruling is a Wake-Up Call for Pharma Companies and Others Requiring Overtime Pay for Sales Reps under the FLSA

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A recent ruling against Novartis by the United States Court of Appeals for the Second Circuit threatens to change the way that pharmaceutical companies—and perhaps others—compensate sales reps. In the Novartis case, approximately 2,500 current and former pharmaceutical sales representatives of Novartis Pharmaceuticals Corp. had commenced a class action against Novartis for its failure to pay them overtime. The lower court ruled in favor of Novartis, but the Second Circuit reversed the decision and held that the sales representatives were not exempt from the overtime pay requirements of the Fair Labor Standards Act (the FLSA).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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