## Facts

- Michael Shane Christopher and Frank Buchanan worked for SmithKline Beecham Corp. (GlaxoSmithKline) as pharmaceutical sales representatives.
- Prescription-drug marketing is regulated so that manufacturers cannot sell directly to consumers; physicians prescribe, and pharmacies dispense.
- The representatives’ primary duty was to visit physicians and seek nonbinding commitments to prescribe their employer’s drugs in appropriate cases.
- They typically worked about 40 hours per week in field calls plus an additional 10–20 hours on related work, without overtime pay.
- They were paid a salary plus incentive compensation tied to sales performance and worked with substantial autonomy and limited day-to-day supervision.
- In 2008 they sued under the Fair Labor Standards Act (FLSA) seeking overtime, asserting they were not “outside salesmen.”
- The Department of Labor, as amicus, argued the exemption did not apply because the representatives did not obtain orders or transfer title.

## Issues

1. Whether pharmaceutical sales representatives who obtain nonbinding physician commitments qualify as “outside salesmen” exempt from FLSA overtime under 29 U.S.C. § 213(a)(1) and DOL regulations.
2. Whether the Department of Labor’s interpretation advanced in litigation briefs should receive controlling deference in construing the regulations.

## Decision

- The Supreme Court affirmed the Ninth Circuit and held that the representatives qualified as “outside salesmen” under the most reasonable reading of the DOL regulations.
- The Court declined to give controlling deference to the Department of Labor’s interpretation first advanced in amicus briefs, citing lack of prior notice and the resulting unfair surprise.
- The Court construed “sale” broadly under 29 U.S.C. § 203(k), concluding that obtaining nonbinding commitments in this regulatory setting fits within “other disposition.”
- The Court relied on the representatives’ sales-like indicia—field-based work, irregular hours, limited supervision, and incentive-based compensation—as consistent with the purpose of the exemption.

## Legal Principles

- The FLSA “outside salesman” exemption applies when an employee’s primary duty is “making sales” as defined by § 203(k), including the catchall “other disposition,” not only title transfers.
- In a highly regulated industry where traditional consummated sales are not legally feasible for the employee, securing the maximum commitment the employee can obtain may qualify as “making sales” for exemption purposes.
- Promotional work is exempt when it is incidental to and in conjunction with the employee’s own sales or solicitations, rather than incidental to sales made by others.
- An agency interpretation of its regulations raised for the first time in litigation briefs may be denied controlling deference where it conflicts with regulatory text, longstanding practice, and fails to provide regulated parties fair warning; at most it receives weight proportional to its persuasiveness.

## Conclusion

The Court held that pharmaceutical sales representatives who obtain nonbinding prescribing commitments are exempt “outside salesmen” under the FLSA and refused controlling deference to the Department of Labor’s newly asserted litigation position that would have imposed retroactive overtime liability.


Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012)