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Early May in America is known for several things.&nbsp; For most of us living outside the Sunbelt, the temperature manages to stay above 60 degrees consistently, flowers start to bloom in earnest, baseball season begins to heat up, and (perhaps most importantly), the annual tradition of waiting for television networks to announce what shows are being renewed for the fall is finally upon us.&nbsp; For fans of Big Bang Theory or any other CBS sitcom, it&rsquo;s a foregone conclusion that you will see your favorite characters returning in the fall.&nbsp; For the small, but dedicated fans of pretty much any show on NBC, but specifically Community or Parks and Recreation, however, these weeks bring another period of nail-biting as we anxiously await the news on pick-up or cancellation.
In many ways, pharmaceutical companies have been like those fans of 30 Rock awaiting word of their Liz Lemon&rsquo;s fate from above, with the Supreme Court playing the role of NBC executives.&nbsp; For years, drug companies have classified their sales representatives to be exempt from the FLSA&rsquo;s overtime requirements.&nbsp; A tidal wave of class action lawsuits in the past several years, however, have challenged that thinking (and resulted in great expense to companies like Eli Lilly &amp; Co. and Abbott Laboratories).&nbsp; Oral arguments regarding GlaxoSmithKline PLC&rsquo;s sales reps were heard before the Supreme Court just last month.&nbsp;
Unlike those fifteen fans of Awake that are still waiting for the dire news next week (folks, you know it&rsquo;s canceled), the Seventh Circuit has granted some relief for the drug companies in its decision in <a href="http://docs.justia.com/cases/federal/appellate-courts/ca7/10-3855/10-3855-2012-05-08.pdf">Schaefer-LaRose v. Eli Lilly &amp; Co</a>., No. 10-3855, and Jirak v. Abbott Laboratories, Inc., Nos. 11-1980 &amp; 11-2131 (7th Cir. May 8, 2012).&nbsp; The opinion, which addresses a pair of consolidated cases, involves the application of outside sales and administrative exemptions of the FLSA to drug reps.&nbsp;
In short, the drug company employers argued that both the sales and administrative exemptions applied to their reps.&nbsp; The court agreed that the employees&rsquo; duties were covered by the administrative exemption, and specifically held that that representatives were &ldquo;the public face of their employer to the most important decision-maker regarding the use of their companies&rsquo; products, the prescribing physicians.&rdquo;&nbsp; Thus, while the reps may not have ultimately closed the sale, they were still performing work directly related to the general business operations of the employer.
Perhaps unsurprisingly, given the inevitable decision on the outside sales exemption currently pending before the Supreme Court, the Seventh Circuit did not address the issue in its decision.
The Bottom Line:&nbsp; With the Supreme Court&rsquo;s decision on the outside sales exemption due in June, drug companies (and potentially other employers with similar sales representative structures) received a bit of good news with the decision that there is still more than one overtime exemption that may apply to their sales representatives.&nbsp;

Pharmaceutical Companies Receive A Late-Season Pick-up With Regard To Seventh Circuit Ruling On Administrative Exemption