Novartis pays $99 million to settle federal FLSA lawsuit

A judge recently approved a preliminary settlement of $99 million in a class-action wage and hour case for U.S. sales representatives against pharmaceutical company Novartis AG.

About 7,700 current and former Novartis sales representatives claimed that the company did not compensate them for overtime hours outside the business day. Some of the claims go back as far as 2000.

This would represent the first major settlement of a pharmaceutical overtime case. The case was in litigation for almost six years.

Courts split on whether drug reps are entitled to overtime
The Department of Labor has stated that pharmaceutical sales reps are eligible to receive overtime because they do not qualify for the outside salesperson exemption. But some courts have sided on both sides of the aisle in these cases, with some lower courts ruling in favor of the sales reps and some appeals courts deciding they are exempt. The U.S. Supreme Court is already set to hear arguments in a similar wage and hour case for sales representatives against GlaxoSmithKline.

The decision in the Novartis case can have great impact on how future cases will be decided in Fair Labor Standards Act (FLSA) cases against other drug manufacturers.

Inside vs. Outside Salesperson Classification
One issue that courts usually consider in these cases is whether you are an inside salesperson or an outside salesperson. An inside salesperson generally works selling a product from an office setting. An inside salesperson is normally considered an hourly, non-exempt employee eligible to receive overtime pay and commissions.

An outside salesperson works in the field bringing in leads or selling products door to door and is generally considered exempt from receiving overtime pay. However, sales people are often misclassified by their employers, which cheats them out of their hard-earned wages every day.

Read more: Are you misclassified as an outside salesperson?

Are you a misclassified salesperson?
If you are working over 40 hours a week, but something doesn’t add up on your check call our employment lawyers to start a free, no obligation case review. We can review your job duties for free to determine if you are paid correctly under the FLSA. Contact us toll-free at 1-888-449-2068 or send us a confidential contact form.

Kennedy Hodges does not represent the case above, but we have recovered back pay for employees in all industries nationwide. Contact us for a free consultation.