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NEW YORK—A putative class action wage-and-hour lawsuit over the issue of overtime pay was filed Thursday in federal district court in New York on Thursday against pharmaceutical firm LEO Pharma Inc.
The lawsuit was filed by New York-based plaintiffs law firm Sanford Wittels & Heisler L.L.P., which last month reached a $99 million settlement in a wage-and-hour class action lawsuit filed against another pharmaceuticals firm, East Hanover, N.J.-based Novartis Pharmaceuticals Corp.
The latest lawsuit, Lori Hoel et al. vs. LEO Pharma Inc., charges Parsippany, N.J.-based LEO with misclassifying its sales representatives as salaried exempt employees and failing to pay overtime to its employees in violation of the Fair Labor Standards Act and of corresponding state wage-and-hour laws.
LEO, a subsidiary of Ballerup, Denmark-based LEO Pharma A/S, which in turn is owned by the LEO Foundation, specializes in dermatology and critical care products.
The lawsuit does not specify the number of employees involved. However, according to a press release issued by the company in December, since opening its U.S. headquarters in December 2009 with five employees, it has added 50 employees in its corporate headquarters and 151 employees to its nationwide sales force, including regional directors, district managers and sales representatives.
A company spokesman could not immediately be reached for comment.
Late last year, in another case on the same issue, the U.S. Supreme Court agreed to consider the February 2011 decision by the 9th U.S. Circuit Court of Appeals in Michael Christopher et al. vs. SmithKline Beecham Corp., in which the San Francisco-based appeals court ruled pharmaceutical sales reps of the GlaxoSmithKline P.L.C. unit are outside sales employees under the Fair Labor Standards Act of 1938 and are exempt from being paid overtime.
WASHINGTON—The U.S. Supreme Court's eventual decision on whether pharmaceutical sales representatives are entitled to overtime pay could have significant implications for the pharmaceutical industry and employers in general, observers say.