THE TRUTH AS WE SEE IT…Pay Me! I Want to Play Golf!

Posted by on June 18, 2012

By a 5-4 vote, the Supreme Court today upheld a long standing definition of exemption
from overtime for “outside” salespeople. They ruled against two former sales representatives for a unit of Britain’s GlaxoSmithKline Plc. In stipulating that outside salespeople were in fact exempt from the federal personal overtime rules as defined in the FLSA (Fair Labor Standards Act).

So why do I care or better yet, why should you care?

I am a huge believer in “fairness” and if you “know the rules of the game”, don’t complain.  I believe that if you know that a restaurant allows smoking, don’t go to it. You knew in advance, Idiot! I don’t need the Government telling me that the restaurant can’t allow smoking because I may be too stupid to read their signs.  Give me a break!

Well this case, dealt with the proverbial “goal post” movement. See, these two sales
representatives, who had resigned from Glaxo, thought they were entitled to overtime because they had to play golf with doctors on weekends, eat out at fancy restaurants with them and occasionally go to nighttime events (rock concerts, baseball games, hockey games, you know, all that crappy stuff).  This clearly was not done in the 40 hours
they were paid for.  Working in your pajamas every morning at home with a cup of Joe and a doughnut until noon was I suppose.

They would have never sued if it wasn’t for the DOL (Officially U.S. Department of Labor,
better known as the Doofus Operation League), telling these two malcontents that they were entitled to overtime. To support them, in 2009, DOL filed an uninvited amicus brief (that means listen to us because we are smart) in which it made an abrupt about-face (they moved the goal posts) and asserted that there can be no sales without a formal transfer of title. You see, Congress forbids any binding agreement by a doctor to prescribe a specific drug, ergo; you can’t sign a sales contract saying you will push a drug. If you are a drug dealer, you can! Absolute advantage, right, economics students?

This was enough for the DOL, even though the salespersons’ jobs required them to not only meet with doctors in their offices, but also to attend conventions, dinners, even golf outings (job description when they were hired) where the end goal was not merely to make physicians aware of the medically appropriate uses of a particular drug, but rather, it was to convince physicians actually to prescribe the drug in appropriate cases. They were trained how to “close the sale”—i.e., to ask for that commitment from their customer-physicians to prescribe, where medically appropriate and consistent with product labeling The DOL argued  that a consummated sales transaction never occurred, so pay overtime. I got it! These guys were deaf, unable to read and stupid! They couldn’t have known that was what the job was all about. I’m starting to feel sorry for them!

Never mind that the FLSA specifically exempted specific jobs to avoid unintended effects on individuals or industries that were not engaged in the oppressive labor
practices. To qualify for sales employee exemption, all of the following tests must be met : For “outside” salespeople, the law stipulated that for “outside salespeople” the employee’s primary duty must be making sales (as defined in the FLSA which meant a specific order need not be signed), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and the employee must be customarily and regularly engaged away from the employer’s place or places of business    For the first 60 years of the law, this was excepted as the correct and appropriate

The reasons for exempting outside salesmen were “fairly apparent” from the start: Hourly standards “primarily devised for an employee on a fixed hourly wage” are incompatible with the “individual character of the work of an outside salesman” because he “works away from his employer’s place of business, is not subject to the personal supervision of his employer, and his employer has no way of knowing the number of hours he works per day.”

This lawsuit led to a flood of law suits against pharmaceutical companies from outside salespeople claiming overtime for golfing. This industry must hire the dumbest people in
the world. Who da thunk!

Mmmm, I golf, I teach, I’m deaf, I’m stupid, I don’t consummate a contract – I SMELLLLLLL A LAWSUIT!

This all started because the rules of the game got changed. Goal Posts moved!  Thank heavens for our Founding Fathers who set up the Judiciary as an independent body.  Someone has to make sure the game is fair!

Thank you for your Interest in Minnesota School of Business.