We frequently get inquiries from salespeople in various industries wondering if they are entitled to overtime if they work more than forty (40) hours in a workweek, as is generally required under federal and state overtime laws. The Fair Labor Standards Act (FLSA) provides for several exemptions from overtime requirements, one of which is known as the “outside sales exemption.” An outside salesman is any employee whose primary duty is making sales within the meaning of the FLSA under 29 U.S.C. § 203(k).
The United States Supreme Court recently examined this issue in the case of Christopher v. SmithKline Beecham Corp., where the question was whether pharmaceutical sales representatives qualifed as outside salesmen under the FLSA. The group of plaintiff salespeople contended that there is no sale unless a transfer of title occurs, so therefore they are not outside salesmen. The Court determined that obtaining a nonbinding commitment from a physician to prescribe SmithKline Beecham’s drugs falls under the category of “other disposition” in 29 U.S.C. § 203(k) and therefore constitutes a sale under the FLSA. The plaintiffs were thus exempt from overtime requirements of the FLSA.
While outside salesmen may be exempt from the overtime requirements of the FLSA, as in the SmithKline Beecham case there is often a valid question as to whether or not the exemption applies. If you have questions, please contact us for a free consultation.
