|September 5, 2011|
Previously published on September 1, 2011
Over the past two years, plaintiffs across the United States have brought several wage and hour lawsuits against pharmaceutical manufacturers. Most of these cases claim that pharmaceutical sales representatives are entitled to overtime compensation under the Fair Labor Standards Act (FLSA) and related state statutes, with employers arguing the representatives are exempt under the outside sales exemption or the administrative exemption, or both. Because of the unique nature of the pharmaceutical industry, in which companies and sales representatives are prohibited from selling directly to doctors or patients, it is unclear what effect the courts' rulings in pharmaceutical cases will have on the medical technology industry, including medical device manufacturers.
However, cases have begun to challenge the exempt status of certain medical device employees. For example, in Reynolds v. Hologic, Inc., No. C 11-00462 EMC, currently pending before the United States District Court for the Northern District of California, the court recently conditionally certified a FLSA collective action class of Hologic "in-servicing trainers." According to the plaintiffs' complaint, the primary job duty of these in-servicing trainers is to perform product training for Hologic customers. The plaintiffs claim that their positions do not qualify for any of the FLSA's exemptions. In particular, the complaint alleges that the plaintiffs do not meet the FLSA's administrative exemption because their duties involve the performance of routine mental, manual, mechanical, and physical work rather than the exercise of discretion and independent judgment. Therefore, the plaintiffs are seeking overtime pay, as well as meal and rest break pay damages under California state law.
It is likely that wage and hour cases involving employees of pharmaceutical and medical device companies will continue to commence and percolate over the coming years. To avoid potential liability for misclassification under the FLSA and related state statutes, employers may wish to consult with outside counsel to develop a comprehensive compliance strategy. In addition, employers should carefully consider what steps they are prepared to take to address any potential misclassification issues before commencing an internal or external audit of their practices. Outside counsel experienced in conducting such audits can help employers navigate these issues and develop a comprehensive wage and hour compliance strategy.