In what can only be called a refreshing display of common sense, the Supreme Court ruled 5-4 that pharmaceutical representatives are exempt outside salespeople. For those not following the case, the difficulty in analyzing such representatives under the exemption arises because the reps don't actually sell anything because prescriptions must be written by a doctor.  The facts showed, however, that the reps made sales calls and were paid commissions based on the sales of the drugs within their territories, just like salespeople. 

Perhaps the most important and far reaching part of the decision is the rejection of the Department of Labor's hypertechnical analysis of the term "sale" as being non-binding, and instead focusing on the practical reality that these employees are outside sales people for all intents and purposes.  The majority summed up its opinion as follows: "Our point is that, when an entire industry is constrained by law or regulation from selling its products in the ordinary manner, an employee who functions in all relevant respects as an outside salesman should not be excluded from that category based on technicalities."  The Court even went so far as to note that pharmaceutical reps have been treated as outside salespeople for 40 years without any intervention or concern from the Department of Labor, which suggests that the practice was lawful.

The takeaway from the case is that the Supreme Court is trying to push the lower courts to close the floodgates on these overtime cases, many of which are based on nothing more than creative legal arguments as opposed to legitimate violations of the law.  Highly paid white collar employees are in no way "wronged" by being paid a salary, even if a technical argument can be made as to why their job description does not match a duties test which was crafted by Congress 75 years ago.  Hopefully, the lower courts will get the message.

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