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Bloomberg Drugmakers don’t have to pay overtime to their sales representatives, the US Supreme Court ruled in a decision that saves the industry billions of dollars and marks a defeat for the Obama administration. The justices, voting 5-4 in a case involving a GlaxoSmithKline Plc unit, said pharmaceutical salespeople are exempt from a federal wage-and-hour law. More than a dozen similar cases had been filed against drugmakers -- including Johnson & Johnson, Bristol-Myers Squibb Co. and units of Novartis AG and Merck & Co. -- by workers charged with persuading doctors to prescribe the company’s products. Business groups said billions of dollars were at stake. The Obama administration threw its support behind the sales representatives in a 2009 court filing. The administration said the exemption in the Fair Labor Standards Act for “outside salesmen” doesn’t apply to drug-industry representatives. The court today said that position wasn’t entitled to any special deference because the Labor Department laid out its views in court papers rather than through a formal rulemaking proceeding. The case split the court along ideological lines. Justice Samuel Alito wrote the majority opinion, joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas. Two former Glaxo salesmen, Michael Shane Christopher and Frank Buchanan, argued that the sales exception doesn’t apply because drug industry representatives only promote the product -- and don’t actually sell it -- during their visits to doctors’ offices. Glaxo said its representatives are trained in sales techniques, learning how to obtain a commitment from doctors to prescribe the company’s medicines. Glaxo also said its salespeople are paid in part through incentives that are tied to sales volume and market share in assigned territory. The drug industry said the 2009 Labor Department filing marked a reversal of 70 years of practice in the industry. The suit, which sought class action status, targeted GlaxoSmithKline LLC, a US unit of the London-based drugmaker. The case is Christopher v. SmithKline Beecham, 11-204. READ FULL SOURCE ARTICLE The BasicsProject.org informational and educational pamphlet series is now available for Kindle and iPad. Click here to find out more... The BasicsProject.org informational and educational pamphlet series is now available for Kindle and iPad. Click here to find out more... The New Media Journal and BasicsProject.org are not funded by outside sources. We exist exclusively on tax deductible donations from our readers and contributors. Please make a tax deductible donation today.
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