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By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
27 June 2012
Hotel Labor Lawyer update on recent United States Supreme Court decision affecting wage an hour (overtime) requirements
In this article, Jon McNutt, an associate in JMBM's Labor & Employment Group, reviews the United States Supreme Court's recent decision concerning overtime exemption under the Fair Labor Standards Act.
The Fair Labor Standards Act's (the "Act") outside salesperson exemption has been a hotly contested issue for many years. To qualify for this overtime exemption under the Act, an employee's primary duty must be "making sales" and the employee must be "customarily and regularly" engaged in making sales outside the employer's place of business. Employers and plaintiffs have clashed over the types of duties that meet the criteria -- including whether individuals who lay the groundwork for a product's sale are, in fact, salespersons.
On June 18, 2012, the United States Supreme Court in Christopher v. GlaxoSmithKline Beecham provided guidance on this issue and handed employers a victory. In Christopher, two former GlaxoSmithKline pharmaceutical sales representatives filed a class-action lawsuit claiming that they were not paid for hours they worked each week outside the normal business day. Their jobs required them to meet with doctors in their offices to pitch Glaxo products, but also to attend conventions, dinners, and golf outings. GlaxoSmithKline argued that their job duties and work away from the employer's business exempted them from overtime pay, whereas the employees claimed that since they were not actively involved in the product sale, they should receive overtime pay.