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  • USCIS Announces Revised Form I-9
    • U.S. Citizenship and Immigration Services (USCIS) published a Notice today in the Federal Register announcing a revised Form I-9. For more information, click here for details from our affiliate consulting firm, Workplace HR.
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  • OFCCP Issues New Compensation Directive and Rescinds Voluntary Guidelines and Compensation Standards

    • The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced today, February 26, that effective February 28, 2013 there will be significant changes in how the OFCCP addresses compensation in compliance audits and enforcement proceedings. These changes effectively open virtually every federal contractor’s actions, policies and practices that affect compensation to scrutiny, review and possible challenge by OFCCP.

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  • 2013 OFCCP Criminal Record Directive
    • The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) released a new Directive 306 on “Complying with Nondiscrimination Provisions: Criminal Record Restrictions and Discrimination Based on Race and National Origin.” The OFCCP’s Criminal Record Directive issued January 29, 2013, and is effectively immediately.
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Supreme Court Decision that Pharma Sales Reps are Exempt from Overtime Impacts More than Wage & Hour

By: David S. Fortney 

In Christopher v. SmithKline Beecham Corp., the Supreme Court, by a vote of five-to-four, affirmed the decision of the U.S. Court of Appeals for the Ninth Circuit, holding that pharmaceutical sales representatives qualify as outside salesmen under federal wage and hour law-the Fair Labor Standards Act (FLSA) and its regulations, as interpreted by the U.S. Department of Labor (DOL).  In its decision announced June 18, the Court in Christopher rejected DOL's view that was announced beginning in 2009, that these sales employees were entitled to overtime, based on a change in DOL's interpretation of its FLSA regulations.  Although the ruling directly applies to pharmaceutical sales employees, the decision also provides guidance in determining whether other employees may be exempt from the overtime under the FLSA's outside sales exemption.


The Supreme Court's conclusion that DOL's interpretation should not be afforded deference has broader significance than the specific questions raised under the interpretation of the wage and hour laws.  The Court rejected DOL's attempts to announce a retroactive change in DOL's interpretation of its regulations through amicus or "friend of the court" briefs that were filed in pending private litigation cases.  In concluding that DOL's retroactive change in its interpretations was an improper, "unfair surprise," the Court reasoned that:

Petitioners invoke the DOL's interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation was announced.  To defer to the agency's interpretation in this circumstance would seriously undermine the principle that agencies should provide regulated parties ‘fair warning of the conduct [a regulation] prohibits or requires.' . . . Indeed, it would result in precisely the kind of ‘unfair  surprise' against which our cases have long warned.  [Slip Op. 10-11]

In addition to the changes in the DOL's interpretations of the FLSA regulations challenged in Christopher, since 2009, the DOL has embarked on a number of policy and enforcement changes that have been announced through audit and enforcement proceedings.  DOL often has attempted to impose retroactive liabilities based on these changed views.  Christopher sets a powerful precedent against such "unfair surprise" interpretations and attempts by DOL and other agencies to improperly impose retroactive liabilities.  We anticipate that employers may raise arguments and defenses based on Christopher in response to a number of DOL actions that are not premised on legally-sound rulemaking and the resulting announcement of prospective changes.  Ultimately, the impact of this decision promises to go well beyond the rejection of DOL's interpretation of its wage and hour regulations. 

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