Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On July 19, 2010, in Jackson v. Alpharma, Inc., the United States District Court for the District of New Jersey held that Alpharma, Inc.’s pharmaceutical sales representatives qualify as exempt administrative employees under the Fair Labor Standards Act (FLSA). The court’s unpublished opinion relies in part on the Third Circuit’s holding in Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010). For more on the Third Circuit's decision, see Third Circuit Finds Pharmaceutical Sales Representatives Exempt.
Plaintiffs are former pharmaceutical sales representatives (“PSRs”) for Alpharma, Inc., a manufacturer of pain medication that is now owned by King Pharmaceuticals, who filed a collective action under the FLSA claiming they had been misclassified as exempt employees. The proceedings had been stayed pending the outcome of Smith v. Johnson & Johnson in the Third Circuit Court of Appeals. Following the Third Circuit’s decision in Smith, Alpharma filed a motion for summary judgment.
The court applied the three-prong test set forth in the FLSA regulations regarding the administrative exemption. Under the test, an administrative employee must (1) make no less than $455 per week; (2) perform “non-manual work directly related to the management or general business operations of the employer;” and (3) exercise sufficient “discretion and independent judgment with respect to matters of significance.” With the weekly salary requirement conceded by the parties, the court held that the second prong of the administrative exemption test was met, reasoning that the PSRs were involved in “marketing” and “promoting sales.” Continue reading on Littler's Wage & Hour Counsel blog.