The Supreme Court will soon review whether sales representatives working for GlaxoSmithKline are eligible for overtime pay.

The Supreme Court has agreed to review a lower court's decision which held that sales representatives working for GlaxoSmithKline are not eligible for overtime pay under federal wage and hour law. That case involves two former Glaxo salesmen who believe that an exception in the U.S. Fair Labor Standards Act for outside salespeople does not include them, because representatives don't actually sell the product when they visit doctors in their offices. According to their argument, salespeople are paid to promote pharmaceutical products to doctors in their offices in an effort to influence their prescribing habits, thereby boosting sales. Glaxo says that its sales representatives are paid partly through incentives based on sales volumes and market share, and are not eligible for overtime.

In 2009, the plaintiffs won a victory of sorts when the Labor Department ruled in their favor, saying that the exception in the US Fair Labor Standards Act is applicable only when a salesperson is involved in the actual sale of a product or a consummate transaction. However, a San Francisco federal appeals court rejected the Labor Department’s interpretation of the exception. The Supreme Court has now decided to review the San Francisco court's decision.

At stake are the overtime rights of more than 90,000 sales representatives at GlaxoSmithKline. The lawsuit is seeking class-action status. California employment lawyers will be waiting for the Supreme Court’s decision because there are several such lawsuits also pending against companies like Johnson & Johnson, Bristol-Myers, Merck and Novartis.

The Supreme Court is expected to hear arguments next year. A decision is also expected by the middle of 2012.