Did pharma reps win by losing their overtime pay lawsuit?

Pharmaceutical reps lost their class action lawsuit seeking overtime pay. Dow Jones (FINS: Losing Overtime is a Win for Drug Reps) asserts that, “the ruling may have actually saved the jobs of thousands of pharmaceutical sales reps.” The argument: if drug companies had to pay reps a big settlement, they would have instituted another round of layoffs as a response. That’s at least what two executives from pharma recruiting companies said.

I’m not really buying it. Despite relatively hard times recently, big pharma companies are generally well capitalized and able to pay whatever they owe. Any ruling against the companies seemed unlikely to dramatically affect future costs, because the companies would have just adjusted their policies and pay formulas to conform. Therefore I don’t think widespread layoffs would have ensued.

All in all, I’m not sure recruiters were the best source for this story!


June 21, 2012

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