Articles Posted in pharmaceutical sales reps

After years of litigation, our New York wage and hour lawyers successfully settled a major case against a prominent New York City eatery on behalf of 32 plaintiffs, who alleged that the Defendant had violated New York Labor Law by illegally withholding gratuities.

Although the Defendant denied (and continues to deny) the material allegations and claims asserted, the restaurant agreed to settle, rather than risk extended litigation or a large public trial that could decimate the business’ brand. All told, after attorney’s fees and other costs, the plaintiffs received over $507,000 – a huge sum of money for any business to pay, particularly a restaurant trying to survive in the ferociously competitive New York food service industry.

Fortunately, the servers who fought to get this tip rule violation corrected can now rebuild their finances and move forward with their lives and careers. While the settlement was unquestionably a big victory for the plaintiffs, the resolution still feels slightly bittersweet. Why did it take so much effort, legal and otherwise, to compel this employer to adhere to the law and treat hardworking servers justly? More broadly, why do so many restaurants (and other businesses) in New York and beyond fail to nurture their biggest asset: their people?

Last Tuesday, Bentonville, Arkansas based super-retailer Walmart agreed to pay out $5.3 million for violating the federal government’s overtime rules. 4,500 plus Walmart employees across the U.S. will collect $4.8 million in damages and back wages, and the retailer will also pay nearly $500,000 in penalties.

Why is Walmart being hit?

The federal Fair Labor Standards Act requires companies to pay certain employees overtime. Walmart failed to pay managers and coordinators of various centers and warehouses for work done more than 40 hours a week. A U.S. Department of Labor Wage and Hour Division investigation found that, in failing to pay out this overtime, Walmart violated the law. A neutral “third-party” administrator will pay out the damages and back pay to the employees.

Last Monday, Justices at the U.S Supreme Court debated whether pharmaceutical sales representatives (a.k.a. “detailers“) should be entitled to overtime pay for their efforts.

At the heart of the debate is a pretty simple, straightforward question: should these detailers — the people who go into doctors’ offices and try to convince physicians to purchase medications from their drug companies — be considered salespeople… or not?

• If so, then Federal Law can exempt the drug companies from having to pay these people for overtime.

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