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$99M Class Action Settlement Between Novartis and Sales Reps

A federal district court has issued a preliminary approval of a $99 million class action settlement between pharmaceutical sales company Novartis and sales representatives for wage and hour disputes. The sales reps filed suit against Novartis for improper classification of the employees as exempt and not eligible for overtime wages.

The settlement stems from two separate cases filed in New York and California in 2006. It’s believed that more than 7,000 current and former sales rep employees may be affected by the large settlement. Five classes of sales reps may receive compensation as part of the agreement.

The case may have been affected by a pending case Christopher v. SmithKlineBeecham Corp. regarding the employment classification of pharmaceutical sales representatives. A Novartis spokesperson said that they strongly believe that the U.S. Supreme Court will find that sales reps are exempt under the Fair Labor Standards Act, however, they agreed to the settlement due to the high costs of litigation.

To be eligible for compensation as part of the overtime settlement, a Novartis sales rep must have been employed from March 23, 2002 to April 7, 2007, in California or New York. Other employees may also be included in an additional subclass.

Source: BNA Online, “Novartis, Sales Reps Settle for $99 Million Nationwide Suit Based on Overtime Dispute,” 1/30/2012

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