Nine major drug companies are being sued by thousands of US sales representatives in class action lawsuits seeking to recover tens of millions of dollars in overtime, which the representatives say is due, but has never been paid.
The companies - Amgen, AstraZeneca, Bayer, Boehringer Ingelheim, Eli Lilly & Co, GlaxoSmithKline, Roche, Johnson & Johnson and Pfizer – are being sued in federal and state courts in California, Connecticut, New Jersey and New York. The representatives claim that they were denied overtime payments because the companies had incorrectly classified them as exempt from state and federal laws requiring overtime to be paid to employees who work more than 40 hours a week. The cases cover periods of between two and six years, based on federal and state statutes of limitations, and seek back pay and damages.
The overtime laws state that employees should be exempt from overtime if they are involved in making sales, but the representatives’ suits say they do not sell drugs or take orders for them. Their lawyers point out that they work very long hours, sometimes more than 60 hours a week.
These are the first cases in which workers are claiming to have been incorrectly classified as overtime-exempt by their pharmaceutical company employers, but a number of high-profile settlements have recently been agreed in other sectors. For example, in November 2006, IBM agreed to pay $65 million to 32,000 staff who claimed they had been illegally denied overtime, while two investment banks - Morgan Stanley and UBS AG - have paid out $42.5 million and $89 million, respectively, to settle similar claims.
Most of the drugmakers have made no comment on the lawsuits, but spokesmen for AstraZeneca, J&J and Pfizer have been quoted as saying they will contest them vigorously.