Pharmaceutical companies seeking to deny overtime pay to outside sales representatives were overturned by a recent Supreme Court decision. The ruling mandates outside reps be covered by the federal hourly wage laws, Bloomberg reports.
Leading pharmaceutical companies had appealed the decision of a lower to court before it reached the Supreme Court. Now, companies like Novartis AG will be left holding the bag for enormous overtime pay disputes. According to Bloomberg, Novartis will be forced to pay approximately $100 million to about 2,500 past and current employees.
"This case involves one company - Novartis - that micromanages its reps and gives them far less discretion than is typical in the industry," lawyers for the plaintiffs told Bloomberg.
The Supreme Court also issued a ruling against Merck & Co., holding the company responsible for the same overtime pay. Merck said that sales representatives weren't eligible for such benefits because they merely represent doctors and do not actually sell anything. The decision was met with anger by the drug makers, who said that overturning the long-standing tradition of not paying overtime rates could inflict a significant financial burden upon the companies.
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