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March 7, 2012

Alleging that workers are “free human beings” who are entitled to “work a livable number of hours at a livable wage,” two plaintiffs on March 5th filed a lawsuit in a federal district court in New York claiming that Novo Nordisk Inc. is liable for more than $70 million in overtime pay, damages, and penalties allegedly owed to the company’s pharmaceutical sales representatives (Stepe v. Novo Nordisk Inc., S.D.N.Y., No. 12-cv-1581, complaint filed 3/5/12).

McKenzie Stepe, a former sales representative for Novo Nordisk, and Karen Woolen, who is still employed by the company, filed a complaint in the U.S. District Court for the Southern District of New York alleging that the company violated the Fair Labor Standards Act and the New York Labor Law by misclassifying sales representatives as overtime-exempt salaried workers.

The plaintiffs are proposing that their federal overtime allegations proceed as a nationwide collective action under FLSA procedures. They will also ask that they be permitted to pursue the state law allegations on behalf of a class consisting of all sales
representatives who were employed in New York state during the six-year period before the filing of the lawsuit.

For at least three years, Stepe and Woolen allege, the company has misclassified its sales representatives as overtime exempt under the FLSA, including four different categories of diabetes care specialists.

The plaintiffs’ primary job responsibility, they claim, has been “to call on practicing physicians and other healthcare personnel in order to provide them with company-created information pertaining to Novo Nordisk products.”

“[I]n fact,” the complaint alleges, “these employees are not exempt from federal or state wage and hour laws.” Stepe and Woolen both allege that they worked more than 40 hours per week without receiving overtime compensation, and they assert that similarly
situated sales representatives also worked without “proper overtime compensation.”

Contending that the company engaged in willful violations of the FLSA, the sales representatives said they are seeking to represent every individual who worked as a full-time sales representative in a U.S. state, commonwealth, or territory during the three years before the filing of the lawsuit.

The plaintiffs estimate there are approximately 2,000 such individuals.

The New York Labor Law has a six-year statute of limitations, and Stepe and Woolen are proposing that they be allowed to pursue the state law claims as a class action under the procedures followed in federal district courts.

The complaint alleges that Novo Nordisk employs more than 100 sales representatives in New York state.  Classification of pharmaceutical sales representatives under the FLSA and state laws has been disputed by industry and employee representatives in a number of lawsuits.

The U.S. Supreme Court will hear argument April 16 to consider whether the Fair Labor Standards Act’s outside sales exemption covers drug sales representatives who visit doctors to encourage them to prescribe their employer’s prescription drugs (Christopher v. SmithKlineBeecham Corp. d/b/a GlaxoSmithKline, U.S., No. 11-204).  03.07.2012

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