(June 20, 2012, Weil News)
Employment Litigation partner Gary D. Friedman spoke with Law360
’s Abigail Rubenstein about the multifaceted impact of the US Supreme Court’s recent holding, in favor of GlaxoSmithKline PLC, that a proposed class of pharmaceutical sales representatives were exempt from overtime under the outside sales classification under the Fair Labor Standards Act (FLSA).
One such potential impact is to inhibit federal agencies’ use of court filings to make substantive regulatory changes. Friedman noted that all federal agencies must now scrutinize their approach to interpreting their own regulations. Further, he added, “‘[s]hrouding their interpretive process from public scrutiny or engaging in unfair surprise will result in the courts’ giving these agency interpretations minimal deference.’”
Regarding the Court’s expansive interpretation of the FLSA’s outside sales exemption, Friedman explained that the ruling’s “‘broad interpretation of 'sales' under the FLSA and the regulations provides considerable grist for other employers seeking to classify their employees as exempt under the outside sales definition.’” The Court, he added, focused on function, rather than formality, and placed great weight on the FLSA's language exempting those who are employed in the capacity of an outside salesman. “‘Other industries that employ workers who act in a saleslike capacity are likely to draw sustenance from the court's interpretation of 'sales' from a functional and practical, rather than formulaic, perspective,’” Friedman said.
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