Christopher v. Smithkline Beecham Corporation

132 S.Ct 2156 (2012)


The Fair Labor Standards Act (FLSA) imposes minimum wage and maximum hours requirements on employers, but those requirements do not apply to workers employed “in the capacity of outside salesman. Congress did not define the term “outside salesman,” but it delegated authority to the Department of Labor (DOL) to issue regulations “from time to time” to “define and delimit” the term. Under the general regulation, an outside salesman is any employee whose primary duty is making any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition. Sales include the transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property. “Promotion work” is “one type of activity often performed by persons who make sales, which may or may not be exempt outside sales work, depending upon the circumstances under which it is performed.” Promotion work that is “performed incidental to and in conjunction with an employee's own outside sales or solicitations is exempt work,” whereas promotion work that is “incidental to sales made, or to be made, by someone else is not exempt outside sales work.” D is a pharmaceutical company that sells prescription drugs. D has long focused their direct marketing efforts on the medical practitioners who possess the authority to prescribe the drugs. Employees known as “detailers” or “pharmaceutical sales representatives” provide information to physicians about the company's products in hopes of persuading them to write prescriptions for the products in appropriate cases. D hired Ps as detailers. Ps were responsible for calling on physicians in an assigned sales territory to discuss the features, benefits, and risks of an assigned portfolio of prescription drugs. P were tasked to obtain a nonbinding commitment from the physician to prescribe those drugs in appropriate cases, and the training that Ps received underscored the importance of that objective. Ps spent about 40 hours each week in the field calling on physicians and from 10 to 20 hours each week attending events, reviewing product information, returning phone calls, responding to e-mails, and performing other miscellaneous tasks. Ps were subject to only minimal supervision.  Pay included both a base salary and incentive pay. Ps earned $72k and $76k per year. D did not pay Ps time-and-a-half wages when they worked in excess of 40 hours per week. Ps alleged that D violated the FLSA by failing to compensate them for overtime. The District Court granted D's summary judgment. The Court of Appeals for the Ninth Circuit affirmed. The Supreme Court granted certiorari.