WASHINGTON — Representatives of pharmaceutical companies who visit doctors’ offices to promote their companies’ products are not entitled to overtime, the Supreme Court ruled Monday in a 5-to-4 decision that broke along ideological lines.
A contrary decision would have exposed the pharmaceutical industry to billions of dollars in potential liability.
The question in the case, Christopher v. SmithKline Beecham Corp., was whether the marketing work performed by representatives of drug companies was sales calls or something else. The Fair Labor Standards Act, which generally requires extra pay for overtime, exempts workers employed ‘‘in the capacity of outside salesman.’’
Justice Samuel A. Alito Jr., writing for the majority, acknowledged that the marketing representatives do not themselves sell anything and merely ‘‘obtain nonbinding commitments from physicians to prescribe their employer’s prescription drugs in appropriate cases.’’
But that was enough, he wrote, to make them sales representatives for purposes of the relevant laws and regulations, one of which defined sales to include exchanges, consignments, or ‘‘other dispositions.’’
“We think that the catchall phrase ‘other disposition’ is most reasonably interpreted as including those arrangements that are tantamount, in a particular industry, to the paradigmatic sale of a commodity,’’ Alito wrote.
In dissent, Justice Stephen G. Breyer wrote that a ‘‘nonbinding commitment’’ is not a sale.
‘‘Like a ‘definite maybe,’ an ‘impossible solution,’ or a ‘theoretical experience,’’’ he wrote, ‘‘a ‘nonbinding commitment’ seems to claim more than it can deliver.’’’
The case was brought by Michael Christopher and Frank Buchanan, both of whom worked for SmithKline Beecham Corp. for about four years starting in 2003. They said they worked not only the hours set by the company — from 8:30 a.m. to 5 p.m., visiting eight to 10 doctors a day — but an additional 10 or 20 hours a week.
They were not required to punch a time clock, received only minimal supervision, and were paid more than $70,000 a year.
They received bonuses based on the sales volume or market share of the drugs they promoted in their assigned territories. The bonuses added 25 percent or more to their pay.
According to briefs in the case, there are more than 90,000 such representatives, who are often called detainers. Their median compensation is about $93,000.
Monday’s decision affirmed a ruling from a three-judge panel of the US Court of Appeals for the Ninth Circuit in San Francisco. That court held that the plaintiffs were not eligible for overtime because their work was a form of salesmanship adapted to how prescription drugs are sold.
Alito agreed, writing that drug company representatives ‘‘bear all the external indicia of salesmen.’’ They are, he said, hired for their sales experiences and trained ‘‘to close each sales call by obtaining the maximum commitment possible.’’
Chief Justice John G. Roberts Jr. and justices Antonin Scalia, Anthony M. Kennedy, and Clarence Thomas joined the majority opinion.
In dissent, Breyer wrote that the term ‘‘sales’’ did not capture what the representatives did. At most, he said, a representative ‘‘might convince a doctor to prescribe a drug for a particular kind of patient.’’ Much more would need to happen, though, before a sale was made.
A suitable patient would have to appear, and the doctor would have to follow through by prescribing the drug. The patient would have to present the prescription to a pharmacist, although some studies say patients often fail to order the prescribed drug.
If the patient followed through, the pharmacist would have to dispense a brand name rather than generic version of the drug. Even then, Breyer wrote, ‘‘it is the pharmacist, not the detainer, who will have sold the drug.’’
Justices Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan joined Breyer’s dissent.