Amendola v. Bristol-Myers Squibb Co.
| Decision Date | 04 June 2008 |
| Docket Number | No. 07 Civ. 6088(DLC).,07 Civ. 6088(DLC). |
| Citation | 558 F.Supp.2d 459 |
| Parties | Beth AMENDOLA, on behalf of herself and others similarly situated, Plaintiff, v. BRISTOL-MYERS SQUIBB COMPANY, and Does 1 through 20, inclusive, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Ilann M. Maazel, Elizabeth S. Saylor, Jonathan S. Abady, Emery Celli Brinckerhoff & Abady LLP, New York, NY, James A. Jones, Gillespie, Rozen, Watsky & Jones, P.C., Dallas, TX, David Sanford, Stefanie Roemer, Sanford, Wittels & Heisler, LLP, Washington, DC, Eric B. Kingsley, Kingsley & Kingsley, Encino, CA, for Plaintiff.
Bettina B. Plevan, Joshua F. Alloy, Proskauer Rose LLP, New York, NY, for Defendant Bristol-Myers Squibb Company.
This litigation raises the question of whether pharmaceutical representatives ("PRs") employed by a major pharmaceutical company are properly classified as exempt from the overtime compensation rules prescribed by the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). Plaintiff Beth Amendola ("Amendola") has moved for discovery of the names and addresses of the defendant's PRs, authorization for notice of this collective action to be sent to those potential plaintiffs, and equitable tolling of any claims they may file. Finding among other things that the defendant's PRs are not exempt from the FLSA's overtime compensation provisions under the exemption which applies to outside salespersons, but that they are likely subject to the exemption for administrative employees, the plaintiff is not authorized to send notice to the defendant's PRs. The request for equitable tolling is denied.
Amendola was employed by defendant Bristol-Myers Squibb Company ("BMS") as a PR from February 1998 through March 2006. She filed this action, individually and on behalf of other similarly situated BMS employees, on June 28, 2007, alleging that BMS often required her to work more than forty hours per week but never paid her overtime wages. She quickly demanded that BMS provide her with the names and contact information of all PRs, or, in the alternative, that BMS consent to the equitable tolling of any FLSA claims. BMS refused, and Amendola requested discovery tailored to and in anticipation of her motion for authorization of notice of this collective action to all PRs employed by BMS.
At a conference held to address the parties' disputes over the scope of discovery, BMS explained that its PRs include four levels of seniority and are employed by five distinct business units, each of which is subdivided across several geographic regions. BMS asserted that it would challenge Amendola's contention that all of its PRs are "similarly situated" for purposes of the FLSA collective action without regard to their seniority, business unit, or geographic location. The Court rejected Amendola's assertion that she immediately needed the names of all PRs — roughly 4,500 in total — employed by BMS during a three-year period. Instead, the Court instructed BMS to provide Amendola with the names of two or three PRs randomly selected from each business unit, geographic region, and job level. By October 19, BMS had provided Amendola with the names and addresses of 350 employees, as well as more than 6,000 documents. In response to Amendola's Rule 30(b)(6) notice, BMS produced five witnesses for depositions — one vice president or manager overseeing each of BMS's five business divisions. Amendola deposed solely these five witnesses, and BMS deposed Amendola.
Following this preliminary discovery, Amendola moved for authorization to send notice of this collective action to all of BMS's PRs.1 BMS has opposed the motion arguing principally that its PRs are exempted from the FLSA overtime compensation rules by one or more of four statutory and regulatory exemptions. Following a description of the evidentiary record presented by the parties on this motion, the Opinion will address each of these four exemptions.
BMS is a global pharmaceutical company with headquarters in New York. It employs about 2,400 PRs to promote BMS products to physicians, hospitals, clinics, and medical institutions across the United States.2 BMS, like other pharmaceutical companies, classifies these employees — who work from their own homes — as exempt from the FLSA. PRs receive a salary plus incentive compensation. They do not record the hours they work, nor do they receive payments for overtime work.
BMS's PRs are all employed within its U.S. Pharmaceutical Group. The U.S. Pharmaceutical Group consists of five separate business units: (i) Cardiovascular/Metabolics ("CV/Met"); (ii) Virology; (iii) Oncology; (iv) Immunoscience; and (v) Neuroscience. Within CV/Met, PRs are assigned to either "Primary Care" or "Specialty Sales." Those assigned to Specialty Sales "call on different customers, they have deeper product and disease state knowledge, they have deeper market and industry knowledge, [and] they are usually more experienced" than Primary Care PRs. Primary Care PRs typically receive lower base salaries than PRs assigned to Specialty Sales and BMS's four other business units. The five business units have separate management, training resources, customers, and incentive compensation structures.
The five business units are each divided geographically into "Regions," and then further divided into "Districts," which are in turn subdivided into "Territories." At least one PR is assigned to each Territory.
Finally, PRs are appointed to one of at least three levels of seniority: Territory Business Manager ("TBM"), Senior TBM, and Executive TBM. The Primary Care sector of CV/Met also has a trainee or Associate TBM ("ATBM") position. All PRs, at whatever level of seniority, are supervised by District Business Managers.
PRs are required to be in the field visiting medical providers from 8 a.m. to 5 p.m., and spend time in the evenings preparing for these visits. The goal of the visits is to influence the prescription practices of the providers. PRs record notes about their "calls" — as these visits are known in the pharmaceutical industry — in a "Call Max" system. They are required to attend online and in-person training, which includes instruction on the BMS "ENGAGE" method — a tool to teach PRs how to prepare for, conduct, and record calls to medical providers. BMS has developed a "core message" about each drug and trains PRs to relay that message on every visit. District Business Managers supervise PRs principally by joining them on their calls about once every month.
BMS provides a list of medical providers upon whom PRs are expected to call, and sets guidelines as to how many calls they should average per day. BMS assigns one to three drugs to each PR, and often specifies the order in which the drugs should be promoted during a call. A PR's adherence to these guidelines affects the employee's bonus.
PRs have flexibility in determining which provider to call upon on any given day and how often to do so, setting their own daily and weekly schedules. Subject to the approval of their supervisors, they can also add to and subtract from their lists of assigned providers. Amendola often did so, explaining that "[a]s long as you fulfilled your requirement, then you could add to your call list." She noted that in one instance an antibiotic she was assigned to promote had an indication appropriate for urologists and she decided to "pick ten urologists and start calling on them." This strategy resulted in the antibiotic becoming "a number one product" for her.
Physicians do not generally purchase drugs.4 Instead, they write prescriptions, which their patients present to pharmacies, or they order that drugs be administered within a hospital setting. Similarly, PRs do not sell drugs to providers or take orders for drugs from the providers on whom they call. PRs will ask the providers they visit, however, for a non-binding "commitment" to prescribe a BMS drug when it is appropriate for their patients.5 Amendola testified at her deposition that she would ask doctors for non-binding commitments to prescribe BMS drugs as "one other way to possibly move the business." Amendola taught these "closing skills" to other PRs.
BMS provides PRs with data about the prescribing practices of each medical provider on their lists. PRs tailor their presentations to each medical provider based, for instance, on the provider's past prescribing habits, patient population, and individual personality. They also use the data to structure their call schedules. As Amendola described,
Guidelines set by BMS and the U.S. Food and Drug Administration ("FDA") restrict the materials and information that PRs can present during their calls and that they can use to answer providers' questions.6 For example, PRs cannot highlight any information on the written materials that BMS provides for distribution to physicians, and PRs can only offer pre-approved information to the medical providers. Yet, PRs determine which visual aids to use in each presentation to a provider, as well as how many samples and promotional materials, if any, to distribute. Amendola explained that she "had a slew of promotional materials" and so "would pick the one that was appropriate for the doctor and use that." "To drive the business," Amendola testified that it was important to "allocate the right amount of samples to the right people." In deciding how to allocate the samples she was allotted, Amendola would determine "if an office was busy or not," "note the patient population," "go into the sample closet to see if there were any samples," and "look to see if...
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