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Who Wins What in the High Court's $100M Drug Sales Rep Ruling

As Novartis (NVS) and Schering drug sales reps look forward to their share of a $100 million overtime backpay award, employees at competing companies -- most of whom have been touched by overtime litigation -- might well be asking how the ruling affects them. Never fear, here is BNET's guide to the winners and losers, by company, in the pharmaceutical overtime war.

As long as you don't work at GlaxoSmithKline (GSK), Amgen (AMGN) and Johnson & Johnson's (JNJ) Ortho McNeil unit -- and as long as the lawsuits covering your company did not originate West of the Rockies (see map of the Ninth Circuit Court of Appeals in yellow) -- the chances are you'll get an overtime payout.

Companies are currently treated differently under the law because of the quirky -- and nonsensical -- way that the federal appeals courts are organized. They're structured by geography, so that courts of appeal in California can reach opposite rulings to those of New York. That's what happened in the sales rep overtime litigation. Novartis (NVS) and Merck's (MRK) Schering unit appealed rulings in the East that gave their employees overtime, and in both cases the U.S. Supreme Court denied them a hearing, leaving rulings favoring OT pay for reps in place.

That means any case covered by the Second Circuit Court of Appeals will now likely reach the conclusion that companies owe their salespeople overtime pay. Companies and cases in other jurisdictions, noting the lead of the high court, will likely also follow.

But in the Western states, the Ninth Circuit has ruled that reps don't get overtime. That ruling still stands -- unless it too is appealed. In that event, the Supreme Court would either have to take the case and (presumably) overturn it or it could vacate and remand the case for further deliberation in the Ninth Circuit. Either way, employees at GSK, Amgen and Ortho may still get overtime -- eventually.

In the meantime, here's how it stands:

  • Companies that will definitely have to pay overtime backpay: Novartis
    Merck (Schering-Plough)
    Boehringer Ingelheim
  • Pending cases, outcome unknown, that will likely follow the Supreme Court's lead if fully appealed: Pfizer (King), (case originating in Tennessee)
    Pfizer (Alpharma) (case originating in New Jersey)
    Bristol-Myers Squibb (case originating in New York)
    Abbott Labs (case originating in Illinois)
    AstraZeneca (case originating in Delaware)
    Takeda (case originating in Illinois)
  • Existing settlements favoring OT for reps: HealthFirst
    Kaiser Foundation Health Plan
  • Companies that do NOT currently have to pay overtime because their cases are covered by the 9th Circuit case: GlaxoSmithKline
    Johnson & Johnson's Ortho McNeil unit
Image by Flickr user lec, CC.
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