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Second Circuit Strips Pharmaceutical Sales Reps of Their Exempt Status

By Neil V. McKittrick and Rachel Reingold Mandel

The Second U.S. Circuit Court of Appeals recently held in In re Novartis Wage and Hour Litigation, No. 09-0437 (2nd Cir. July 6, 2010), that pharmaceutical sales representatives do not fall under any of the exemptions to overtime payment requirements under the Fair Labor Standards Act (“FLSA”). The court's decision exposes the two defendant pharmaceutical companies to significant damages in unpaid overtime as the result of having misclassified the employees and significantly impacts the classification of pharmaceutical sales representatives in the industry.

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