Christopher v. SmithKline Beecham Corp.
635 F.3d 383
| 9th Cir. | 2011Background
- Christopher and Buchanan worked as pharmaceutical sales representatives for Glaxo from 2003 to 2007 and alleged FLSA overtime violations.
- Glaxo classified PSRs as outside salesmen, exempt from overtime, and the district court granted summary judgment for Glaxo.
- PSRs travel to physicians, present drug information, provide samples, and seek commitments to prescribe; compensation is largely salary with uncapped incentives.
- Industry context: Rx-only drugs require physician authorization; distribution to distributors/pharmacies and physician-focused detailing govern sales; PhRMA Code regulates interactions with physicians.
- The court analyzes the outside sales exemption under 29 U.S.C. § 213(a)(1) and 29 C.F.R. Part 541, reviewing de novo.
- The Ninth Circuit affirms the district court, holding PSRs are exempt outside sales employees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do PSRs meet the outside sales exemption? | Christopher argues PSRs do not make sales. | Glaxo contends PSRs primarily perform outside sales and fit the exemption. | PSRs are exempt outside sales employees. |
| Should the Secretary's position receive deference? | Secretary's view should be given deference under Auer/Chevron. | Deference is warranted or Secretary's view is persuasive. | No controlling deference to the Secretary; disagree with her interpretation. |
| How should 'sales' vs. 'promoting' be construed in pharma? | PSRs promote; not selling, thus not exempt. | Pharma practice treats detailing as selling; a sale occurs via physician commitment. | PSRs engage in 'sales' activity and are exempt; detailing constitutes exempt outside sales work. |
Key Cases Cited
- Jewel Tea Co. v. Williams, 118 F.2d 202 (10th Cir.1941) (outside salesman rationale; inherent autonomy and commissions)
- Bratt v. Cnty. of Los Angeles, 912 F.2d 1066 (9th Cir.1990) (narrow, fact-intensive exemption inquiries)
- Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (9th Cir.2009) (reaffirmed narrow construction of exemptions)
- Nigg v. U.S. Postal Serv., 555 F.3d 781 (9th Cir.2009) (statutory exemption interpretation framework)
- Gonzales v. Oregon, 546 U.S. 243 (2006) (rejects mere parroting of statutes by agency interpretations)
- Auer v. Robbins, 519 U.S. 452 (1997) (deference to agency interpretations of its own regulations)
- In re Novartis Wage & Hour Litig., 611 F.3d 141 (2d Cir.2010) (Second Circuit scrutiny of secretary's outside-sales interpretation)
- Reiseck v. Universal Commc'ns of Miami, Inc., 591 F.3d 101 (2d Cir.2010) (distinction between selling and promoting in publishing context)
- IMs Health, Inc. v. Mills, 616 F.3d 7 (1st Cir.2010) (industry-wide detailing and sales practices in pharma)
- Yi v. Sterling Collision Centers, Inc., 480 F.3d 505 (7th Cir.2007) (industry practice informed by Posner observations)