Schaefer-LaRose v. Eli Lilly & Co., 679 F.3d 560

Pharmaceutical companies Lilly and Abbott employ plaintiffs as sales representatives to interact with physicians in a highly regulated industry.
Plaintiffs allege they were misclassified as exempt under FLSA and entitled to overtime; defendants contend representatives are exempt under administrative (and potentially outside sales) exemptions.
Two district courts reached opposite results; the Seventh Circuit consolidates the cases for opinion.
The court concentrates on whether representatives’ primary duty is work directly related to management/general business operations and whether they exercise discretion/independent judgment.
The Department of Labor filed as amicus in one case and urged that reps are not exempt; the court ultimately holds they are exempt administrative workers under regulations.
The court does not resolve whether outside sales exemption would apply and remands to enter judgment for Abbott where applicable; Lilly case is affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether pharmaceutical sales reps are exempt under the administrative exemption	Schaefer-LaRose: reps perform promotional work not directly related to admin functions	Lilly/Abbott: reps perform admin tasks directly supporting management operations	Yes; reps are exempt administrative employees
Whether the court should apply or defer to outside sales exemption	Plaintiffs contend outside sales exemption may apply	Court should not reach outside sales issue in these cases	Court does not decide outside sales; AFFIRMS Lilly ruling and remands Abbott cases for entry of Abbott judgment

Haywood v. North American Van Lines, Inc., 121 F.3d 1066 (7th Cir. 1997) (directly related admin work; customer-facing responsibilities as admin functions)
Roe-Midgett v. CC Services, Inc., 512 F.3d 865 (7th Cir. 2008) (field claims processing; front-line claims handling as admin work)
Novartis Wage & Hour Litigation, 611 F.3d 141 (2d Cir. 2010) (sales reps not exempt; factors below support non-exemption)
Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010) (facts show independence; case potentially supportive of admin exemption in discovery context)
Martin v. Cooper Electric Supply Co., 940 F.2d 896 (3d Cir. 1991) (admin/productivity dichotomy; production focused businesses versus admin roles)
John Alden Life Insurance Co., 126 F.3d 1 (1st Cir. 1997) (marketing reps; admin/servicing role ancillary to main business)
Reiseck v. Universal Communications of Miami, Inc., 591 F.3d 101 (2d Cir. 2010) (advertising sales context; not controlling for pharma context)