Judge Approves $99M Novartis Sales Rep Overtime Settlement

A federal judge granted final approval to a $99 million class action lawsuit settlement awarded to more than 7,000 Novartis Pharmaceuticals Corp. sales representatives who alleged overtime violations between 2000 and 2007.

U.S. District Judge Paul A. Crotty approved the Novartis sales rep class action settlement on May 31, following a January decision to grant preliminary approval. The final order and judgment allocated $70,758,500 to settlement awards for Class Members; $27,608,000 to attorneys’ fees; $400,000 to reimbursement of litigation fees; and $233,500 to class representatives and others involved in the case.

The Novartis overtime settlement will resolve a 2006 wage and hour class action lawsuit, In re Novartis Wage & Hour Litigation, alleging Novartis misclassified its sales reps as exempt from overtime pay. The sales reps argued their work cannot be considered “sales” because they’re not allowed to actually sell pharmaceuticals to physicians, pharmacies or patients. Rather, they interact with physicians to promote drugs, provide information, and coordinate events.

The class action settlement comes on the heels of a July 2010 decision by the 2nd U.S. Circuit Court of Appeals in New York ruling that Novartis sales reps are entitled to overtime pay under the federal Fair Labor Standards Act. Novartis asked the U.S. Supreme Court to review the decision, but it declined the review in February 2011.

The $99 million Novartis overtime settlement will cover more than 7,000 current and former Novartis sales representatives.