Violations of the Fair Labor Standards Act (FLSA) have become prominent in the pharmaceuticals industry in recent years. The FLSA pertains to standards in minimum wage, overtime pay, recordkeeping, and youth employment. Many pharmaceutical companies have been withholding overtime wages from pharmaceutical representatives that have been working over forty hours per week.
The Overtime section of the FLSA states: “Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days.”
Many pharmaceutical companies have misclassified their reps as exempt from FLSA’s overtime requirement when in fact they were not. Pharmaceutical reps have begun joining together in the face of this wage injustice. For example, in January 2012, a $99 million settlement for Novartis reps, who were unlawfully deprived of overtime wages, was preliminarily approved by a federal court in New York.
Last week the Arizona law firm, JacksonWhite filed a collective action lawsuit against Otsuka America Pharmaceuticals, Inc. for not paying its employees the overtime wages they are entitled under the FLSA. The Complaint was filed on behalf of all Otsuka pharmaceutical representatives employed in the U.S. from May 2009 up to the present.
Otsuka has never paid its employees overtime wages despite requiring them to work much more than 40-hour work weeks. Otsuka’s violation of the FLSA could cost them up to two times the amount of overtime wages that Otsuka should have been paying their pharmaceutical reps over the past three years.
JacksonWhite also has a collective action lawsuit against GlaxoSmithKline, another pharmaceutical company, that is awaiting a decision by the Supreme Court. If the Supreme Court sides with the pharmaceutical reps from Glaxo, then it is probable that the Otsuka reps will also win their case and a precedent would be established for all other pharmaceutical reps.
Reps interested in participating in the Otsuka collective action lawsuit must provide written consent to join. Reps who delay joining may lose damages that are owed to them. Reps from other companies may also be able to join in this case or file a new lawsuit against the company that they work for.