Labor: New trends in misclassification cases

An update on where courts stand on employee misclassification

Wage and hour class actions are here to stay. In 2012, misclassification lawsuits have burgeoned in new states, new industries and new areas of focus.

Where are they filed?

More clearly resolved is the issue of whether pharmaceutical sales representatives are exempt. Earlier this year, the Supreme Court in Christopher v. Smithkline Beecham Corp., resolved the split between the 9th (exempt) and 2nd Circuits (non-exempt). The high court affirmed the 9th Circuit’s position concluding that, under the most reasonable interpretation of the Department of Labor’s regulations and the Fair Labor Standards Act (FLSA), drug representatives qualified as outside sales employees even though regulations barred them from making traditional sales. Following the Supreme Court’s ruling, the district court judge in Burdine v. Covidien Inc., lifted a stay and granted Covidien’s motion for summary judgment, finding that Covidien sales representatives were not entitled to overtime pay. The pharmaceutical companies greeted these decisions with collective relief. Before the Supreme Court issued its decision, however, Novartis Pharmaceuticals Corporation settled their own nationwide wage and hour class action on behalf of 7,000 Novartis sales representatives for $99 million to eligible class members and $33 million in attorneys’ fees.

What are the new areas of emphasis?

Contributing Author

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Cheryl Orr

Cheryl Orr is a partner and co-chair of the national Labor & Employment Practice Group at Drinker Biddle & Reath LLP.  She concentrates her practice on...

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