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FLSA Class Action Defense Cases–Amendola v. Bristol-Myers: New York Federal Court Denies Plaintiff’s Request To Give Notice Of FLSA Class Action And To Equitably Toll Claims Period For Employees Who Later Join Class Action Litigation

FLSA Class Action Plaintiff not Entitled to give Notice of Litigation to Other Pharmaceutical Representatives of Bristol-Myers Squibb because Administrative Employee Exemption to Overtime Pay Likely Applies New York Federal Court Holds

Plaintiff filed a putative labor law class action against Bristol-Myers Squibb alleging violations of the federal fair Labor Standards Act (FLSA); specifically, the class action complaint alleged that Bristol-Myers misclassified its pharmaceutical representatives as exempt from overtime pay. Amendola v. Bristol-Myers Squibb Co., ___ F.Supp.2d ___ (S.D.N.Y. June 4, 2008) [Slip Opn., at 2]. As part of her discovery leading up to a motion to certify the litigation as a class action, plaintiff sought the names and addresses of defendant’s other pharmaceutical representatives, and asked the federal court to authorize that notice of the class action complaint be sent to those individuals and that the limitations period for absent class members to file claims be equitably tolled. Id. The district court denied the motion finding that while defendant’s pharmaceutical representatives are not exempt from overtime pay under the “outside salespersons” exemption, the “administrative employees” exemption likely applies. Id.

According to the class action complaint, plaintiff worked for Bristol-Myers from February 1998 through March 2006 and was “often required…to work more than forty hours per week” but never received overtime pay. Amendola, at 3. Plaintiff filed her class action on June 28, 2007 and promptly sought discovery of the names and contact information of all 4500 pharmaceutical representatives. Id. At a status conference, defense attorneys explained that the company’s pharmaceutical representatives “include four levels of seniority and are employed by five distinct business units, each of which is subdivided across several geographic regions”; the defense argued that pharmaceutical representatives are not “similarly situated” as required for the litigation to proceed as an FLSA collective action. Id. The district court responded by ordering defense counsel to provide the names of “two or three” representatives “randomly selected from each business unit, geographic region, and job level”; Bristol-Myers ultimately provided plaintiff with contact information for 350 employees and 6000 documents. Id., at 3-4. It also produced for deposition five witnesses, consisting of the “vice president or manager overseeing each of [the company’s] five business divisions.” Id., at 4. Plaintiff then renewed her request to notify the pharmaceutical representatives of the litigation; defense attorneys opposed the motion, arguing that at least one of four statutory or regulatory exemptions applied. Id., at 4-5.

The federal court began its analysis with a detailed summary of Bristol-Myers’ operations, and the various duties of its pharmaceutical representatives. See Amendola, at 5-11. The court found that the “geographic territory” of the pharmaceutical representatives was not material to whether they were “similarly situated,” id., at 12, and that the business unit and seniority level of the representatives also was not material to this inquiry, id., at 12-13. Accordingly, the focus of defense attorneys was whether the representatives were properly classified as exempt, id., at 13. The defense raised, and the district court analyzed, four exemptions to overtime pay, but the court found dispositive the administrative employee exemption, so we do not discuss here the other three. We note, however, that the court provided an extensive discussion of the “outside salespersons” exemption, see id., at 18-28, ultimately concluding that the promotional work performed by pharmaceutical representatives “does not constitute a sale” within the meaning of the exemption, id., at 24-25.

The district court agreed with defense attorneys that the “administrative” exemption – which “exempts form [the FLSA’s] compensation provisions ‘any employee employed in a bona fide executive, administrative, or professional capacity,’” Amendola, at 28 (citation omitted) – applied. The court relied in part on a 1945 Opinion Letter by the Department of Labor that concluded a pharmaceutical company’s “medical detailists” were exempt because they were “‘engaged principally in work apparently aimed at increasing the use of subject’s product in hospitals and through physicians’ recommendations’ – work which required ‘a high degree of technical knowledge.’” Id., at 32 (citation omitted). The DOL ‘s 1945 Opinion Letter found that these employees were engaged in “promotional or missionary work” that was directed to the company’s “general business operations.” Id., at 33. The district court also cited case law affirming that “marketing representatives” are exempt from overtime pay under the administrative employee exemptions, see id., at 34-35. Based on the evidence before the court, Bristol-Myers’ pharmaceutical representatives exercised discretion and independent judgment in the performance of their duties, see id., at 35-40.

The final matter addressed by the federal court was plaintiff’s request that “the claims of any [pharmaceutical representatives] who opt in to this litigation be deemed filed as of…the date she filed her complaint.” Amendola, at 43. (The court found that this issue was not moot, because employees may learn of the litigation even without the notice requested by plaintiff’s motion, id.) The district court found that plaintiff had not shown that the claims of such individuals should be equitably tolled because she had failed to demonstrate “the existence of extraordinary circumstances to justify this remedy.” Id., at 44. Accordingly, the court denied plaintiff’s motion in its entirety. Id., at 46.

NOTE: The federal court also discussed defense arguments that the pharmaceutical representatives fell within the scope of the “highly compensated employees” exemption, see Amendola, at 40-41, and the motor carrier exemption, see id., at 41-43.

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