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April 10, 2012

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Joey

KD,
Your solution sounds a little spiteful. Wouldn't getting rid of incentive pay altogether just move the reps focus to the time clock instead of sales/revenue. Sounds like a recipe for mediocrity to me.

HRAthletics

Part of what drives these cases is the 2 or 3 year statute of limitations. You get an employee, or attorney, who doesn't care about the implications and sees a chance for a payday over a legal technicality. There's no way overtime was intended for pharma sales reps who call the clients they want, visit the clients they want and, if you have connections, can literally work the hours they want and still grow market share.

Speaking of growing market share, how is this not considered sales? You may not sell drugs to patients, but the patients don't decide what drugs they take. The customer is not the patient, it's clearly the physician. They make the decision as to which product is used. The lack of a direct buy/sell relationship doesn't change the fact that physicians are buyers and determine if you're growing market share or not.

Even still the administrative or professional exemption would still apply. Exercise of discretion, independent judgement, advanced knowledge in a field of science... Come on! Pharma reps are not Pepsi/Frito sales reps that primarily drop of product and occasionally perform light sales/customer service activities. They primarily find new business and sell. No one's explicitly telling the pharma rep where to go, what to do and who to interact with.

Any time a law starts with the word "fair", it means that it's really "unfair" for the high performers. I'm a registered Independent, but thank God for a Conservative leaning Supreme Court...

J Rieder

To me this sounds like it can open many cans of worms for other sales professionals who must sell through a distributor network.

For example, liquor sales. Supplier representatives cannot sell to the drinker - they sell to distributors who then sell to bars/stores. Does that fall within this same realm? Sounds like it to me. What would that to to Coors, AB, Corona and myriad of other businesses who must operate this way?

Interviewer

So many pharma reps don't make 100K. But some recruiter told them they could make that, and when they didn't make it their first year, or even their second year, they took one hour out of those 60-hour weeks to sit down and figure out what their overtime rate was for their base salary, and figured out they would make more in OT than they would in incentives. And suddenly, it became a different game.

Working 60 hour weeks for seemingly nothing, they have grown to resent the heck out of the decision they made to give up the work-life balance to make the big money that they can't seem to earn, no matter how many waiting rooms they sit in or physician dinners they organize.

I think HRAthletics brought up some excellent points that the justices will hammer on the attorneys to get a clear answer. Can't wait to see how the Supremes rule on this one.

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