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September 16, 2011
Lessons Learned from Lawsuits Challenging Employee Classification

Wage and hour cases offer many lessons to employers--even if they address an issue that is specific to a particular industry. In a BLR webinar titled "Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can't Afford To Make," Aaron R. Gelb, Esq., discussed the relevance of lawsuits filed by plaintiffs' attorneys challenging the exempt status of pharmaceutical reps.

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Why do cases involving pharmaceutical reps matter to your organization? They offer instructive warnings to all employers, especially large ones, he said:

  • Every employer has positions that do not fit comfortably into one of the exemptions.
  • Large employers may have thousands of employees in these ambiguous job classifications.
  • Your organization could have significant damages exposure.
  • The law is still very unclear. We are interpreting statutes that were written in the 1930s.
  • Plaintiffs' attorneys use this to their advantage by relying on the principle that exemptions must be "narrowly construed" and arguing that if employers want to change the law they should lobby Congress to do so.
  • Most importantly, industry practices will not, in most cases, insulate your organization.
  • Careful consideration should be given as to whether a position is exempt.

Aaron R. Gelb, Esq., is a shareholder at Vedder Price PC and a member of the firm's Labor and Employment Practice Area. Based out of the firm's Chicago office, he represents employers in all aspects of equal employment opportunity, wrongful discharge and labor relations litigation before federal and state courts, federal, state and local fair employment and administrative agencies such as the EEOC, the Department of Labor, and National Labor Relations Board. Gelb also partners with human resources consultants to develop a multi-disciplinary approach that combines the operations expertise of experienced HR professionals with an attorney's legal knowledge to develop real-world solutions in a cost-effective manner. He can be contacted at agelb@vedderprice.com.

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