D'Este v. Bayer Corp.
| Decision Date | 05 May 2009 |
| Docket Number | No. 07-56577.,07-56577. |
| Citation | 565 F.3d 1119 |
| Parties | Gina D'ESTE, on behalf of herself and others similarly situated, Plaintiff-Appellant, v. BAYER CORPORATION; Does, 1-50, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
James Alton Jones, Gillespie, Rozen, Watsky & Jones, P.C., Dallas, TX, Matthew D. Brinckerhoff, Emery Celli Brinckerhoff & Abady LLP, New York, NY, for Plaintiff-Appellant.
Benjamin Davidson, Esquire, Jennifer Elizabeth White-Sperling, Esquire, Morgan Lewis & Bockius, LLP, Irvine, CA, Shannon B. Nakabayashi, Esquire, Thomas M. Peterson, Morgan, Lewis & Bockius, LLP, San Francisco, CA, Melinda S. Riechert, Morgan, Lewis & Bockius LLP, Palo Alto, CA, for Defendants-Appellees.
D.C. No. CV-07-03206-JFW-PLA, Central District of California, Los Angeles.
Before: DANIEL M. FREEDMAN,* ANDREW J. KLEINFELD and SANDRA S. IKUTA, Circuit Judges.
We respectfully request that the Supreme Court of California exercise its discretion to decide the certified questions set forth in Part II of this order.
A. The caption of the case is:
No. 07-56577
GINA D'ESTE, on behalf of herself and
others similarly situated, Plaintiff-Appellant
v
BAYER CORPORATION; DOES, 1-50
Defendants-Appellees
B. The names and addresses of counsel for the parties are:
For Plaintiffs-Appellants: James A. Jones, Gillespie, Rozen, Watsky & Jones, P.C., 3402 Oak Grove Ave., Suite 200, Dallas, Texas, 75204.
For Defendants-Appellees: Melinda S. Riechert, Morgan, Lewis & Bockius LLP, 2 Palo Alto Square, 3000 El Camino Real, St. 700, Palo Alto, California 94306-2122; Thomas M. Peterson and Shannon B. Nakabayashi, Morgan, Lewis & Bockius LLP, One Market, Spear Tower, San Francisco, California 94105; Jennifer White-Sperling, Morgan, Lewis & Bockius LLP, 5 Park Plaza, Suite 1750, Irvine, California, 92614.
C. Designation of the party to be deemed petitioner: Plaintiff-Appellants
Pursuant to Rule 8.548 of the California Rules of Court, a panel of the United States Court of Appeals for the Ninth Circuit, before which this appeal is pending, requests that the Supreme Court of California answer the questions presented below. This court will accept the California Supreme Court's decisions on these questions. Our phrasing of the questions is not intended to restrict the California Supreme Court's consideration of the case. The questions certified are:
1. The Industrial Welfare Commission's Wage Orders 1-2001 and 4-2001 define "outside salesperson" to mean "any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer's place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities." 8 Cal.Code Regs., tit. 8, §§ 11010, subd. 2(J); 11040, subd. 2(M). Does a pharmaceutical sales representative (PSR) qualify as an "outside salesperson" under this definition, if the PSR spends more than half the working time away from the employer's place of business and personally interacts with doctors and hospitals on behalf of drug companies for the purpose of increasing individual doctors' prescriptions of specific drugs?
2. In the alternative, Wage Order 4-2001 defines a person employed in an administrative capacity as a person whose duties and responsibilities involve (among other things) "[t]he performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his employer's customers" and "[w]ho customarily and regularly exercises discretion and independent judgment." Cal.Code Regs., tit. 8 § 11040, subd. 1(A)(2)(a)(I), 1(A)(2)(b). Is a PSR, as described above, involved in duties and responsibilities that meet these requirements
Gina D'Este worked for Bayer Pharmaceuticals for thirteen years as a pharmaceutical sales representative. Bayer's job description states that her job was to "[p]romote and sell Bayer Pharmaceutical Division's anti-infective products to targeted offices and hospital-based, high-potential physicians, including specialists." Bayer gave D'Este a roster of doctors and hospitals in her area and a list of Bayer products for which she was responsible. D'Este's job was to communicate information about her Bayer products to her roster of doctors and seek their non-binding commitment to write prescriptions for those products. She was also responsible for communicating with hospitals in her territory to influence them to add the Bayer products for which she was responsible to their formularies.
Bayer refers to its PSRs as a sales force and individual PSRs as salespersons; Bayer also trains its PSRs in what it calls sales skills. Specifically, Bayer trained D'Este in a "consultative" selling method of engaging doctors in a dialogue about the products in order to influence their prescribing behavior. D'Este was trained on a message and had to adhere closely to the information provided by Bayer about its products. Otherwise, she had the freedom to develop her own strategy for communicating with and influencing doctors. D'Este learned to customize her sales presentations "based upon physician style, time constraints, prescribing habits, and managed care status." D'Este also received training in how to handle questions from doctors about the different products for which she was responsible. D'Este was responsible for planning speaking events and could choose the speakers from the list provided by Bayer.
Bayer compensated PSRs in part based on their success in increasing sales of Bayer products in their areas. Bayer tracked prescriptions written and filled for D'Este's list of products by the doctors in D'Este's territory. D'Este was rewarded when sales figures exceeded certain quotas. According to Bayer, D'Este earned between $81,000 and $103,000 per year during the 2000-2004 period at issue here.
Although Bayer describes D'Este and other PSRs as a sales force, PSRs do not complete sales transactions with doctors. PSRs do not receive any payment from doctors for Bayer products, nor do they sign binding contracts for sales with doctors. Doctors do not place orders for Bayer products with PSRs. Rather, PSRs are limited to influencing doctors to increase the number of prescriptions they write for each drug. D'Este also solicited hospitals to include Bayer pharmaceuticals on their formularies, and on occasion signed contracts with hospitals to do so. The hospitals, however, would buy the pharmaceutical products from a wholesaler, not from D'Este or Bayer.
As a PSR, D'Este had flexibility regarding how she spent her day. She developed her own schedule for meeting with the doctors on her list. She received little or no daily supervision, and saw her manager once every six to eight weeks. D'Este could take care of personal obligations during the day, although Bayer expected her to make eight to ten calls per day on doctors in the field. D'Este routinely worked more than eight hours a day and more than forty hours a week. She also often worked weekends. In addition, her job required that she frequently have lunch and dinner with doctors. During the course of her employment, she regularly had working lunches with doctors at least three times a week.
During the course of her employment at Bayer, D'Este was treated as an exempt employee. She did not receive any additional overtime compensation or meal breaks, but she was also not required to keep or maintain set hours.
In 2004, D'Este left Bayer after Bayer reduced its work-force. In 2007, she brought this lawsuit in California state court on behalf of herself and others similarly situated, claiming she had been wrongly classified as an exempt employee and was entitled to back pay and damages under California's wage and hour laws. The district court granted summary judgment in favor of Bayer, finding that D'Este was exempt under California's outside sales exemption and declining to reach the question whether D'Este was exempt under California's administrative exemption. D'Este timely appealed.1
The question whether PSRs are exempt under California's outside salesperson and administrative exemptions is the central issue in multiple class action lawsuits in the Ninth Circuit as well as in other circuits. In addition to the three cases pending before the Ninth Circuit, at least four other class action suits have been filed in federal court in the Central District of California. See Yacoubian v. Ortho-McNeil Pharm., Inc., No. 07-00127 (C.D.Cal. Feb. 6, 2009); Delgado v. Ortho-McNeil, Inc., No. 07-00263 (C.D.Cal. Feb. 6, 2009); Rivera v. Schering Corp., No. 08-1742 (C.D.Cal. Aug. 14, 2008); Brody v. Astrazeneca Pharm., LP, No. 06-6862(C.D. Cal. June 11, 2008). In addition, a class-action arising under California law has been filed in federal court in the Southern District of New York. See In re Novartis Wage & Hour Litig., No. 06-1794, 2009 WL 63433 (S.D.N.Y. Jan.12, 2009).
In light of the scope of the pending litigation regarding the classification of PSRs under California Labor Code section 1171, we respectfully submit that the questions we pose are worthy of a decision by the California Supreme Court. See Cal. Rules of Court 8.548(a). The answers given by the California Supreme Court will dispose of the three pending appeals currently before the Ninth Circuit, as well as guide the decisions in the other federal cases applying California law.
In order to assist the California Supreme Court in evaluating our request, we briefly explain why we believe there is no controlling precedent or clear state court guidance on the question whether PSRs are exempt under the outside salesperson exemption.
Section 510 of the California Labor Code requires employers to compensate non-exempt employees for...
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