Category Archives: Compensation

Overtime Compensation and Outside Salespersons

The Fair Labor Standards Act (FLSA) mandates that employers must pay overtime to certain employees who work more than 40 hours a week. “Exempt” from the FLSA’s overtime requirements are certain employees who are categorized as “outside salesmen.” The FLSA does not define the term “outside salesman.”  Rather, Congress left the definition of “outside salesman” to the United States Department of Labor.

Respondent GlaxoSmithKline (“GSK”) refused to pay overtime to petitioners Michael Christopher and Frank Buchanan, whom it employed as pharmaceutical sales representatives. GSK considered the petitioners to be outside salesmen. The Secretary of Labor had previously established that an outside salesman must, in some sense, make sales. Christopher and Buchanan claimed that their non-committal agreements to supply physicians with certain medications did not qualify as sales.

The Supreme Court concluded that the Department of Labor’s current interpretation, as presented in its amicus brief in support of the petitioners, was unpersuasive.  The Court held that these employees qualified as outside salesmen under the most reasonable interpretation of the Department of Labor’s regulations, thus barring them from receiving overtime compensation.

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