As part of our big, new redesign of the Alliance for Justice website, the Justice Watch blog has moved. To be sure you're getting all the latest news about the fight for a fairer America, visit us at www.afj.org/blog

Friday, December 9, 2011

Corporate Court Grants Cert in Overtime Pay Case

On November 28, the Corporate Court granted cert in the case of Christopher v. SmithKline Beecham Corp. At stake in this case is the ability of employees to get time-and-a-half pay for overtime work, as guaranteed under federal law.

This case arose from a dispute between Michael Shane Christopher and his employer, SmithKline Beecham, a drug company. As a “pharmaceutical representative,” Christopher’s work consisted mainly of visiting doctors’ offices and encouraging doctors to prescribe appropriate SmithKline drugs to patients. He sometimes worked more than 40 hours per week, but did not receive time-and-a-half pay for his overtime work. He and another plaintiff sued on behalf of themselves and a class of all other similar employees working for SmithKline for time-and-a-half pay, which is generally guaranteed to workers under the federal Fair Labor Standards Act (FLSA).

SmithKline claims that Christopher is not entitled to overtime pay because he is an “outside salesman,” and thus falls into one of several narrowly-drawn classes of employees exempted from the FLSA’s overtime pay requirement. Christopher argues that he should not be categorized as an outside salesman because he does not actually sell anything.

Through the FLSA, Congress delegated to the Secretary of Labor the authority to define terms such as “outside salesman.” The Secretary of Labor has issued regulations providing that an “outside salesman” must in some sense make sales. According to the secretary, who filed an amicus brief in this and a related case, these regulations do not exempt drug companies from paying pharmaceutical representatives like Christopher overtime.

It is a well-established principle of federal law that courts generally defer to agencies’ interpretations of statutes and of their own regulations. However, in this case, the Ninth Circuit Court of Appeals agreed with SmithKline that the secretary’s interpretation deserved no deference because the secretary merely “parroted” federal law in writing the regulations. As a result, the Ninth Circuit substituted its judgment for the judgment of the agency, and decided that Christopher was in fact an outside salesman who did not merit overtime pay.

Although this case raises the technical question of the degree of deference a reviewing court should give to agency interpretations of its own regulations, it is important to remember the core dispute at issue in this case. Christopher worked longer hours than a full-time employee is expected to work.  Federal law demands that such workers receive overtime pay, unless they fall into specific, narrowly drawn categories.  Congress delegated the authority to define the boundaries of these categories to the Secretary of Labor, who has determined that employees in Christopher’s position should receive overtime pay.

If the Supreme Court sides with the drug companies, it will not only constitute an earthquake in administrative law, it would also deny overtime to roughly 90,000 drug company employees in Christopher’s situation.

1 comment:

Unknown said...

I can sympathize with the plaintiff; so much of u.s law is designed to leave enough ambiguity to drive an aircraft carrier through it. This is how we end up with the rule of men and not the rule of law. Congress passes a law that sounds great and then leaves the interpretations to agencies that are bought and sold by same corporations that the law was supposed to prevent abuses by. In my state, I can't collect unemployment because I am not a full time worker(I am scheduled to work 64 hours per pay period); the state still takes money out of my check and sends me a statement showing what balance I have in my "unemployment account; when we have a work slow down,I can't draw a dime! The "law" has become a SCAM!