Pharmaceutical sales reps make good money and work in the field by themselves without any significant supervision, so it seems like a "no-brainer" that they would be exempt employees under the outside sales exemption, Aaron R. Gelb, Esq., said in a BLR webinar titled "Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can't Afford To Make." However, plaintiffs' attorneys do not agree, and there has been an explosion of lawsuits in this area targeting pharmaceutical companies.

One of the first lawsuits challenging the exempt status of pharmaceutical reps was spawned from a gender discrimination class action. The affected employees held the title of sales rep, were hired for their sales background, and went through weeks of sales training, but the plaintiffs' attorneys claimed that they were not sales reps.

The case turned into full-frontal attack on the pharmaceutical industry. Over 30 lawsuits were filed by the same plaintiff's law firms--with potential liability in the billions of dollars.

This is the way that some plaintiffs' attorneys work; they file copycat lawsuits and try to pressure entire industries into changing a practice even if that change would ultimately harm the employees.

Employers assert that pharmaceutical reps are exempt under the administrative and outside sales exemptions. However, the dilemma (i.e., the only reason there is any question and a lawsuit) is that pharmaceutical reps do not fit perfectly under those exemptions.

To fit under the outside sales exemption, an employee's primary duty must be making "sales." But pharmaceutical reps do not "sell" in any normal sense of the word, because the FDA prevents them from actually exchanging pharmaceuticals for money.

Logically, the employers have contended that if pharmaceutical reps' primary duty is not sales then it is promotion of sales, which is "administrative" work.

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.