Justice ALITO delivered the opinion of the Court.
The Fair Labor Standards Act (FLSA) imposes minimum wage and maximum hours requirements on employers, see 29 U.S.C. §§ 206-207 (2006 ed. and Supp. IV), but those requirements do not apply to workers employed "in the capacity of outside salesman," § 213(a)(1). This case requires us to decide whether the term "outside salesman," as defined by Department of Labor (DOL or Department) regulations, encompasses pharmaceutical sales representatives whose primary duty is to obtain nonbinding commitments from physicians to prescribe their employer's prescription drugs in appropriate cases. We conclude that these employees qualify as "outside salesm[e]n."
Congress enacted the FLSA in 1938 with the goal of "protect[ing] all covered workers from substandard wages and oppressive working hours." Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981); see also 29 U.S.C. § 202(a). Among other requirements, the FLSA obligates employers to compensate employees for hours in excess of 40 per week at a rate of 1½ times the employees' regular wages. See § 207(a). The overtime compensation requirement, however, does not apply with respect to all employees. See § 213. As relevant here, the statute exempts workers "employed ... in the capacity of outside salesman." § 213(a)(1).
Congress did not define the term "outside salesman," but it delegated authority to the DOL to issue regulations "from time to time" to "defin[e] and delimi[t]" the term. Ibid. The DOL promulgated such regulations in 1938, 1940, and 1949. In 2004, following notice-and-comment procedures, the DOL reissued the regulations with minor amendments. See 69 Fed.Reg. 22122 (2004). The current regulations are nearly identical in substance to the regulations issued in the years immediately following the FLSA's enactment. See 29 C.F.R. §§ 541.500-541.504 (2011).
Three of the DOL's regulations are directly relevant to this case: §§ 541.500, 541.501, and 541.503. We refer to these three regulations as the "general regulation," the "sales regulation," and the "promotion-work regulation," respectively.
The general regulation sets out the definition of the statutory term "employee employed in the capacity of outside salesman." It defines the term to mean "any employee ... [w]hose primary duty is ... making sales within the meaning of [29 U.S.C. § 203(k)]"
The sales regulation restates the statutory definition of sale discussed above and clarifies that "[s]ales within the meaning of [29 U.S.C. § 203(k)] include the transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property." 29 C.F.R. § 541.501(b).
Finally, the promotion-work regulation identifies "[p]romotion work" as "one type of activity often performed by persons who make sales, which may or may not be exempt outside sales work, depending upon the circumstances under which it is performed." § 541.503(a). Promotion
Additional guidance concerning the scope of the outside salesman exemption can be gleaned from reports issued in connection with the DOL's promulgation of regulations in 1940 and 1949, and from the preamble to the 2004 regulations. See Dept. of Labor, Wage and Hour Division, Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition (1940) (hereinafter 1940 Report); Dept. of Labor, Wage and Hour Division, Report and Recommendations on Proposed Revisions of Regulations, Part 541 (1949) (hereinafter 1949 Report); 69 Fed.Reg. 22160-22163 (hereinafter Preamble). Although the DOL has rejected proposals to eliminate or dilute the requirement that outside salesmen make their own sales, the Department has stressed that this requirement is met whenever an employee "in some sense make[s] a sale." 1940 Report 46; see also Preamble 22162 (reiterating that the exemption applies only to an employee who "in some sense, has made sales"). And the DOL has made it clear that "[e]xempt status should not depend" on technicalities, such as "whether it is the sales employee or the customer who types the order into a computer system and hits the return button," Preamble 22163, or whether "the order is filled by [a] jobber rather than directly by [the employee's] own employer," 1949 Report 83.
Respondent SmithKline Beecham Corporation is in the business of developing, manufacturing, and selling prescription drugs. The prescription drug industry is subject to extensive federal regulation, including the now-familiar requirement that prescription drugs be dispensed only upon a physician's prescription.
Respondent hired petitioners Michael Christopher and Frank Buchanan as pharmaceutical sales representatives in 2003. During the roughly four years when petitioners were employed in that capacity,
Petitioners spent about 40 hours each week in the field calling on physicians. These visits occurred during normal business hours, from about 8:30 a.m. to 5 p.m. Outside of normal business hours, petitioners spent an additional 10 to 20 hours each week attending events, reviewing product information, returning phone calls, responding to e-mails, and performing other miscellaneous tasks. Petitioners were not required to punch a clock or report their hours, and they were subject to only minimal supervision.
Petitioners were well compensated for their efforts. On average, Christopher's annual gross pay was just over $72,000, and Buchanan's was just over $76,000.
Petitioners brought this action in the United States District Court for the District of Arizona under 29 U.S.C. § 216(b). Petitioners alleged that respondent violated the FLSA by failing to compensate them for overtime, and they sought both backpay and liquidated damages as relief. Respondent moved for summary judgment, arguing that petitioners were "employed... in the capacity of outside salesman," § 213(a)(1), and therefore were exempt from the FLSA's overtime compensation requirement.
The Court of Appeals for the Ninth Circuit affirmed. See 635 F.3d 383. The Court of Appeals agreed that the DOL's interpretation
The Ninth Circuit's decision conflicts with the Second Circuit's decision in In re Novartis Wage and Hour Litigation, 611 F.3d 141, 153-155 (2010) (holding that the DOL's interpretation is entitled to controlling deference). We granted certiorari to resolve this split, 565 U.S. ___, 132 S.Ct. 760, 181 L.Ed.2d 480 (2011), and we now affirm the judgment of the Ninth Circuit.
We must determine whether pharmaceutical detailers are outside salesmen as the DOL has defined that term in its regulations. The parties agree that the regulations themselves were validly promulgated and are therefore entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). But the parties disagree sharply about whether the DOL's interpretation of the regulations is owed deference under Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). It is to that question that we now turn.
The DOL first announced its view that pharmaceutical detailers are not exempt outside salesmen in an amicus brief filed in the Second Circuit in 2009, and the Department has subsequently filed similar amicus briefs in other cases, including the case now before us.
Although Auer ordinarily calls for deference to an agency's interpretation of its own ambiguous regulation, even when that interpretation is advanced in a legal brief, see Chase Bank USA, N.A. v. McCoy, 562 U.S. ___, ___, 131 S.Ct. 871, 880, 178 L.Ed.2d 716 (2011); Auer, 519 U.S., at 461-462, 117 S.Ct. 905, this general rule does not apply in all cases. Deference is undoubtedly inappropriate, for example, when the agency's interpretation is "`plainly erroneous or inconsistent with the regulation.'" Id., at 461, 117 S.Ct. 905 (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989)). And deference is likewise unwarranted when there is reason to suspect that the agency's interpretation "does not reflect the agency's fair and considered judgment on the matter in question." Auer, supra, at 462, 117 S.Ct. 905; see also, e.g., Chase Bank, supra, at ___, 131 S.Ct. at 881. This might occur when the agency's interpretation conflicts with a prior interpretation, see, e.g., Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994), or when it appears that the interpretation is nothing more than a "convenient litigating position," Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 213, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988), or a "`post hoc rationalizatio[n]' advanced by an agency seeking to defend past agency action against attack," Auer, supra, at 462, 117 S.Ct. 905 (quoting Bowen,
In this case, there are strong reasons for withholding the deference that Auer generally requires. Petitioners invoke the DOL's interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation was announced. To defer to the agency's interpretation in this circumstance would seriously undermine the principle that agencies should provide regulated parties "fair warning of the conduct [a regulation] prohibits or requires." Gates & Fox Co. v. Occupational Safety and Health Review Comm'n, 790 F.2d 154, 156 (C.A.D.C.1986) (SCALIA, J.).
This case well illustrates the point. Until 2009, the pharmaceutical industry had little reason to suspect that its longstanding practice of treating detailers as exempt outside salesmen transgressed the FLSA. The statute and regulations certainly do not provide clear notice of this. The general regulation adopts the broad statutory definition of "sale," and that definition, in turn, employs the broad catchall phrase "other disposition." See 29 C.F.R. § 541.500(a)(1). This catchall phrase could reasonably be construed to encompass a nonbinding commitment from a physician to prescribe a particular drug, and nothing in the statutory or regulatory text or the DOL's prior guidance plainly requires a contrary reading. See Preamble 22162 (explaining that an employee must "in some sense" make a sale); 1940 Report 46 (same).
Our practice of deferring to an agency's interpretation of its own ambiguous regulations undoubtedly has important advantages,
Accordingly, whatever the general merits of Auer deference, it is unwarranted here. We instead accord the Department's
We find the DOL's interpretation of its regulations quite unpersuasive. The interpretation to which we are now asked to defer—that a sale demands a transfer of title—plainly lacks the hallmarks of thorough consideration. Because the DOL first announced its view that pharmaceutical sales representatives do not qualify as outside salesmen in a series of amicus briefs, there was no opportunity for public comment, and the interpretation that initially emerged from the Department's internal decisionmaking process proved to be untenable. After arguing successfully in the Second Circuit and then unsuccessfully in the Ninth Circuit that a sale for present purposes simply requires a "consummated transaction," the DOL advanced a different interpretation in this Court. Here, the DOL's brief states unequivocally that "[a]n employee does not make a `sale' for purposes of the `outside salesman' exemption unless he actually transfers title to the property at issue." U.S. Brief 12-13.
This new interpretation is flatly inconsistent with the FLSA, which defines "sale" to mean, inter alia, a "consignment for sale." A "consignment for sale" does not involve the transfer of title. See, e.g., Sturm v. Boker, 150 U.S. 312, 330, 14 S.Ct. 99, 37 S.Ct. 1093 (1893) ("The agency to sell and return the proceeds, or the specific goods if not sold ... does not involve a change of title"); Hawkland, Consignment Selling Under the Uniform Commercial Code, 67 Com. L.J. 146, 147 (1962) (explaining that "`[a] consignment of goods for sale does not pass the title at any time, nor does it contemplate that it should be passed'" (quoting Rio Grande Oil Co. v. Miller Rubber Co. of N. Y., 31 Ariz. 84, 87, 250 P. 564, 565 (1926))).
The DOL cannot salvage its interpretation by arguing that a "consignment for sale" may eventually result in the transfer of title (from the consignor to the ultimate purchaser if the consignee in fact sells the good). Much the same may be said about a physician's nonbinding commitment to prescribe a particular product in an appropriate case. In that situation, too, agreement may eventually result in the transfer of title (from the manufacturer to a pharmacy and ultimately to the patient for whom the drug is prescribed).
In support of its new interpretation, the DOL relies heavily on its sales regulation, which states in part that "[s]ales [for present purposes] include the transfer of title to tangible property," 29 C.F.R. § 541.501(b) (emphasis added). This regulation, however, provides little support for the DOL's position. The DOL reads the sales regulation to mean that a "sale" necessarily includes the transfer of title, but that is not what the regulation says. And it seems clear that that is not what the regulation means. The sentence just subsequent to the one on which the DOL relies, echoing the terms of the FLSA, makes clear that a "consignment for sale" qualifies as a sale. Since a consignment for sale does not involve a transfer of title, it is apparent that the sales regulation does not mean that a sale must include a transfer of title, only that transactions involving a transfer of title are included within the term "sale."
In light of our conclusion that the DOL's interpretation is neither entitled to Auer deference nor persuasive in its own right, we must employ traditional tools of interpretation to determine whether petitioners are exempt outside salesmen.
We begin with the text of the FLSA. Although the provision that establishes the overtime salesman exemption does not furnish a clear answer to the question before us, it provides at least one interpretive clue: It exempts anyone "employed... in the capacity of [an] outside salesman." 29 U.S.C. § 213(a)(1) (emphasis added). "Capacity," used in this sense, means "[o]utward condition or circumstances; relation; character; position." Webster's New International Dictionary 396 (2d ed. 1934); see also 2 Oxford English Dictionary 89 (def. 9) (1933) ("Position, condition, character, relation"). The statute's emphasis on the "capacity" of the employee counsels in favor of a functional, rather than a formal, inquiry, one that views an employee's responsibilities in the context of the particular industry in which the employee works.
The DOL's regulations provide additional guidance. The general regulation defines an outside salesman as an employee whose primary duty is "making sales," and it adopts the statutory definition of "sale." 29 C.F.R. § 541.500(a)(1)(i). This definition contains at least three important textual clues. First, the definition is introduced with the verb "includes" instead of "means." This word choice is significant because it makes clear that the examples enumerated in the text are intended to be illustrative, not exhaustive. See Burgess v. United States, 553 U.S. 124, 131, n. 3, 128 S.Ct. 1572, 170 L.Ed.2d 478 (2008) (explaining that "[a] term whose statutory definition declares what it `includes' is more susceptible to extension of meaning. . . than where . . . the definition declares what a term `means'" (alteration in original; some internal quotation marks omitted)). Indeed, Congress used the narrower word "means" in other provisions of the FLSA when it wanted to cabin a definition to a specific list of enumerated items. See, e.g., 29 U.S.C. § 203(a) ("`Person' means an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons" (emphasis added)).
Second, the list of transactions included in the statutory definition of sale is modified by the word "any." We have recognized that the modifier "any" can mean "different things depending upon the setting," Nixon v. Missouri Municipal League, 541 U.S. 125, 132, 124 S.Ct. 1555,
Third, Congress also included a broad catchall phrase: "other disposition." Neither the statute nor the regulations define "disposition," but dictionary definitions of the term range from "relinquishment or alienation" to "arrangement." See Webster's New International Dictionary 644 (def. 1(b)) (1927) ("[t]he getting rid, or making over, of anything; relinquishment or alienation"); ibid. (def. 1(a)) ("[t]he ordering, regulating, or administering of anything"); 3 Oxford English Dictionary, supra, at 493 (def. 4) ("[t]he action of disposing of, putting away, getting rid of, making over, etc."); ibid. (def. 1) ("[t]he action of setting in order, or condition of being set in order; arrangement, order"). We agree with the DOL that the rule of ejusdem generis should guide our interpretation of the catchall phrase, since it follows a list of specific items.
The specific list of transactions that precedes the phrase "other disposition" seems to us to represent an attempt to accommodate industry-by-industry variations in methods of selling commodities. Consequently, we think that the catchall phrase "other disposition" is most reasonably interpreted as including those arrangements that are tantamount, in a particular
Nothing in the remaining regulations requires a narrower construction.
Given our interpretation of "other disposition," it follows that petitioners made sales for purposes of the FLSA and therefore are exempt outside salesmen within the meaning of the DOL's regulations. Obtaining a nonbinding commitment from a physician to prescribe one of respondent's drugs is the most that petitioners were able to do to ensure the eventual disposition of the products that respondent sells.
That petitioners bear all of the external indicia of salesmen provides further support for our conclusion. Petitioners were hired for their sales experience. They were trained to close each sales call by obtaining the maximum commitment possible
Our holding also comports with the apparent purpose of the FLSA's exemption for outside salesmen. The exemption is premised on the belief that exempt employees "typically earned salaries well above the minimum wage" and enjoyed other benefits that "se[t] them apart from the nonexempt workers entitled to overtime pay." Preamble 22124. It was also thought that exempt employees performed a kind of work that "was difficult to standardize to any time frame and could not be easily spread to other workers after 40 hours in a week, making compliance with the overtime provisions difficult and generally precluding the potential job expansion intended by the FLSA's time-and-a-half overtime premium." Ibid. Petitioners—each of whom earned an average of more than $70,000 per year and spent between 10 and 20 hours outside normal business hours each week performing work related to his assigned portfolio of drugs in his assigned sales territory— are hardly the kind of employees that the FLSA was intended to protect. And it would be challenging, to say the least, for pharmaceutical companies to compensate detailers for overtime going forward without significantly changing the nature of that position. See, e.g., Brief for PhRMA as Amicus Curiae 14-20 (explaining that "key aspects of [detailers'] jobs as they are currently structured are fundamentally incompatible with treating [detailers] as hourly employees").
The remaining arguments advanced by petitioners and the dissent are unavailing. Petitioners contend that detailers are more naturally classified as nonexempt promotional employees who merely stimulate sales made by others than as exempt outside salesmen. They point out that respondent's prescription drugs are not actually sold until distributors and retail pharmacies order the drugs from other employees. See Reply Brief for Petitioners 7. Those employees,
Petitioners' theory seems to be that an employee is properly classified as a nonexempt promotional employee whenever there is another employee who actually makes the sale in a technical sense. But, taken to its extreme, petitioners' theory would require that we treat as a nonexempt promotional employee a manufacturer's
Petitioners additionally argue that detailers are the functional equivalent of employees who sell a "concept," and they point to Wage and Hour Division opinion letters, as well as lower court decisions, deeming such employees nonexempt. See Brief for Petitioners 47-48. Two of these opinions, however, concerned employees who were more analogous to buyers than to sellers. See Clements v. Serco, Inc., 530 F.3d 1224, 1229-1230, n. 4 (C.A.10 2008) (explaining that, although military recruiters "[i]n a loose sense" were "selling the Army's services," it was the Army that would "pa[y] for the services of the recruits who enlist"); Opinion Letter from Dept. of Labor, Wage and Hour Division (Aug. 19, 1994), 1994 WL 1004855 (explaining that selling the "concept" of organ donation "is similar to that of outside buyers who in a very loose sense are sometimes described as selling their employer's `service' to the person for whom they obtain their goods"). And the other two opinions are likewise inapposite. One concerned employees who were not selling a good or service at all, see Opinion Letter from Dept. of Labor, Wage and Hour Division (May 22, 2006), 2006 WL 1698305 (concluding that employees who solicit charitable contributions are not exempt), and the other concerned employees who were incapable of selling any good or service because their employer had yet to extend an offer, see Opinion Letter from Dept. of Labor, Wage and Hour Division (Apr. 20, 1999), 1999 WL 1002391 (concluding that college recruiters are not exempt because they merely induce qualified customers to apply to the college, and the college "in turn decides whether to make a contractual offer of its educational services to the applicant").
Finally, the dissent posits that the "primary duty" of a pharmaceutical detailer is not "to obtain a promise to prescribe a particular drug," but rather to "provid[e] information so that the doctor will keep the drug in mind with an eye toward using it when appropriate." Post, at 2177. But the record in this case belies that contention. Petitioners' end goal was not merely to make physicians aware of the medically appropriate uses of a particular drug. Rather, it was to convince physicians actually to prescribe the drug in appropriate cases. See App. to Pet. for Cert. 40a (finding that petitioners' "primary objective was convincing physicians to prescribe [respondent's] products to their patients").
* * *
For these reasons, we conclude that petitioners qualify as outside salesmen under the most reasonable interpretation of the DOL's regulations. The judgment of the Court of Appeals is
Justice BREYER, with whom Justice GINSBURG, Justice SOTOMAYOR, and Justice KAGAN join, dissenting.
The Fair Labor Standards Act (FLSA) exempts from federal maximum hour and
The Court describes the essential aspects of the detailer's job as follows: First, the detailer "provide[s] information to physicians about the company's products in hopes of persuading them to write prescriptions for the products in appropriate cases." Ante, at 2163. Second, the detailers "cal[l] on physicians in an assigned sales territory to discuss the features, benefits, and risks of an assigned portfolio of respondent's prescription drugs," and they seek a "nonbinding commitment from the physician to prescribe those drugs in appropriate cases...." Ibid. (footnote omitted). Third, the detailers' compensation includes an "incentive" element "based on the sales volume or market share of their assigned drugs in their assigned sales territories." Ante, at 2164. The Court adds that the detailers work with "only minimal supervision" and beyond normal business hours "attending events, reviewing product information, returning phone calls, responding to e-mails, and performing other miscellaneous tasks." Ante, at 2164.
As summarized, I agree with the Court's description of the job. In light of important, near-contemporaneous differences in the Justice Department's views as to the meaning of relevant Labor Department regulations, see ante, at 2165-2166, I also agree that we should not give the Solicitor General's current interpretive view any especially favorable weight. Ante, at 2168-2169. Thus, I am willing to assume, with the Court, that we should determine whether the statutory term covers the detailer's job as here described through our independent examination of the statute's language and the related Labor Department regulations. But, I conclude on that basis that a detailer is not an "outside salesman."
The FLSA does not itself define the term "outside salesman." Rather, it exempts from wage and hour requirements "any employee employed ... in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary)." 29 U.S.C. § 213(a)(1) (emphasis added). Thus, we must look to relevant Labor Department regulations to answer the question. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); see also Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 165, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007) (explaining that "the FLSA explicitly leaves gaps" to be filled by regulations).
There are three relevant regulations. The first is entitled "General rule for outside sales employees," 29 C.F.R. § 541.500 (2011); the second is entitled "Making sales or obtaining orders," § 541.501; and the third is entitled "Promotion work," § 541.503. The relevant language of the first two regulations is similar. The first says that the term "`employee employed in the capacity of outside salesman' ... shall mean any employee ... [w]hose primary duty is: (i) making sales within the meaning of section 3(k) of the Act, or (ii) obtaining orders or contracts for services or for the use of facilities...." § 541.500(a)(1). The second regulation tells us that the first regulation "requires that the employee be engaged in ... (1) Making sales within the meaning of section 3(k) of the Act, or (2) Obtaining orders or contracts for services or for the use of facilities." § 541.501(a).
Unless we give the words of the statute and regulations some special meaning, a detailer's primary duty is not that of "making sales" or the equivalent. A detailer might convince a doctor to prescribe a drug for a particular kind of patient. If the doctor encounters such a patient, he might prescribe the drug. The doctor's client, the patient, might take the prescription to a pharmacist and ask the pharmacist to fill the prescription. If so, the pharmacist might sell the manufacturer's drug to the patient, or might substitute a generic version. But it is the pharmacist, not the detailer, who will have sold the drug.
To put the same fairly obvious point in the language of the regulations and of § 3(k) of the FLSA, see 29 U.S.C. § 203(k), the detailer does not "sell" anything to the doctor. See Black's Law Dictionary 1454 (9th ed. 2009) (defining "sale" as "[t]he transfer of property or title for a price"). Nor does he, during the course of that visit or immediately thereafter, "exchange" the manufacturer's product for money or for anything else. He enters into no "contract to sell" on behalf of anyone. He "consigns" nothing "for sale." He "ships" nothing for sale. He does not "dispose" of any product at all.
What the detailer does is inform the doctor about the nature of the manufacturer's drugs and explain their uses, their virtues, their drawbacks, and their limitations. The detailer may well try to convince the doctor to prescribe the manufacturer's drugs for patients. And if the detailer is successful, the doctor will make a "nonbinding commitment" to write prescriptions using one or more of those drugs where appropriate. If followed, that "nonbinding commitment" is, at most, a nonbinding promise to consider advising a patient to use a drug where medical indications so indicate (if the doctor encounters such a patient), and to write a prescription that will likely (but may not) lead that person to order that drug under its brand name from the pharmacy. (I say "may not" because 30% of patients in a 2-year period have not filled a prescription given to them by a doctor. See USA Today, Kaiser Family Foundation, Harvard School of Public Health, The Public on Prescription Drugs and Pharmaceutical Companies 3 (2008), available at http://www.kff.org/kaiserpolls/upload/7748.pdf (all Internet materials as visited June 13, 2012, and available in Clerk of Court's case file). And when patients do fill prescriptions, 75% are filled with generic drugs. See Dept. of Health and Human Services, Office of Science & Data Policy, Expanding the Use of Generic Drugs 2 (2010).)
Where in this process does the detailer sell the product? At most he obtains from the doctor a "nonbinding commitment" to advise his patient to take the drug (or perhaps a generic equivalent) as well as to write any necessary prescription. I put to the side the fact that neither the Court nor the record explains exactly what a "nonbinding commitment" is. Like a "definite
The third regulation, entitled "Promotion work," lends support to this view. That is because the detailer's work as described above is best viewed as promotion work. The regulation makes clear that promotion work falls within the statutory exemption only when the promotion work "is actually performed incidental to and in conjunction with an employee's own outside sales or solicitations." 29 C.F.R. § 541.503(a) (emphasis added). But it is not exempt if it is "incidental to sales made, or to be made, by someone else." Ibid.
The detailer's work, in my view, is more naturally characterized as involving "[p]romotional activities designed to stimulate sales ... made by someone else," § 541.503, e.g., the pharmacist or the wholesaler, than as involving "[p]romotional activities designed to stimulate" the detailer's "own sales."
Three other relevant documents support this reading. First, the Pharmaceutical Research and Manufacturers of America (PhRMA), of which respondent is a member, publishes a "Code on Interactions with Healthcare Professionals." See PhRMA, Code on Interactions with Healthcare Professionals (PhRMA Code) (rev. July 2008), available at http://www. phrma.org/sites/default/files/108/phrma_marketing_code_2008.pdf. The PhRMA Code describes a detailer's job in some depth. It consistently refers to detailers as "delivering accurate, up-to-date information to healthcare professionals," id., at 14, and it stresses the importance of a doctor's treatment decision being based "solely on each patient's medical needs" and the doctor's "medical knowledge and experience," id., at 2. The PhRMA Code also forbids the offering or providing of anything "in a manner or on conditions that would interfere with the independence of a healthcare professional's prescribing practices." Id., at 13. But the PhRMA Code nowhere refers to detailers as if they were salesmen, rather than providers of information, nor does it refer to any kind of commitment.
To the contrary, the document makes clear that the pharmaceutical industry itself understands that it cannot be a detailer's "primary duty" to obtain a nonbinding commitment, for, in respect to many doctors, such a commitment taken alone is unlikely to make a significant difference to their doctor's use of a particular drug. When a particular drug, say Drug D, constitutes the best treatment for a particular patient, a knowledgeable doctor should (hence likely will) prescribe it irrespective of any nonbinding commitment to do so. Where some other drug, however, is likely to prove more beneficial for a particular patient, that doctor should not (hence likely will not) prescribe Drug D irrespective of any nonbinding commitment to the contrary.
At a minimum, the document explains why a detailer should not (hence likely does not) see himself as seeking primarily to obtain a promise to prescribe a particular drug, as opposed to providing information so that the doctor will keep the drug in mind with an eye toward using it when appropriate. And because the detailer's "primary duty" is informational, as opposed to sales-oriented, he fails to qualify as an outside salesman. See § 541.500(a)(1)(i) (restricting the outside
Second, a Labor Department Wage and Hour Division Report written in 1940 further describes the work of "sales promotion men." See Dept. of Labor, Wage and Hour Division, Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition (1940) (1940 Report). The 1940 Report says that such individuals "pav[e] the way" for sales by others. Id., at 46. "Frequently," they deal "with [the] retailers who are not customers of [their] own employer but of [their] employer's customer." Ibid. And they are "primarily interested in sales by the retailer, not to the retailer." Ibid. "[T]hey do not make actual sales," and they "are admittedly not outside salesmen." Ibid.
Like the "sales promotion men," the detailers before us deal with individuals, namely doctors, "who are not customers" of their own employer. And the detailers are primarily interested in sales authorized by the doctor, not to the doctor. According to the 1940 Report, sales promotion men are not "outside salesmen," primarily because they seek to bring about, not their own sales, but sales by others. Thus, the detailers in this case are not "outside salesmen."
Third, a Wage and Hour Division Report written in 1949 notes that where "work is promotional in nature it is sometimes difficult to determine whether it is incidental to the employee's own sales work." See Dept. of Labor, Wage and Hour Division, Report and Recommendations on Proposed Revisions of Regulations, Part 541, p. 82 (1949) (1949 Report). It adds that in borderline cases
The 1949 Report also refers to a
It says this company representative is not an "outside salesman" because he
See also 29 C.F.R. § 541.503(c) (explaining that if an employee "does not consummate the sale nor direct efforts toward the consummation of a sale, the work is not exempt outside sales work")
A detailer does not take orders, he does not consummate a sale, and he does not direct his efforts towards the consummation of any eventual sale (by the pharmacist) any more than does the "company's representative" in the 1949 Report's example. The doctor whom the detailer visits, like the example's store manager, "has no authority to buy."
The Court's different conclusion rests primarily upon its interpretation of the statutory words "other disposition" as "including those arrangements that are tantamount, in a particular industry, to a paradigmatic sale of a commodity." Ante, at 2171-2172. Given the fact that the doctor buys nothing, the fact that the detailer sells nothing to the doctor, and the fact that any "nonbinding commitment" by the doctor must, of ethical necessity, be of secondary importance, there is nothing about the detailer's visit with the doctor that makes the visit (or what occurs during the visit) "tantamount ... to a paradigmatic sale." Ibid. See Part I, supra.
The Court adds that "[o]btaining a nonbinding commitment from a physician to prescribe one of respondent's drugs is the most that petitioners were able to do to ensure the eventual disposition of the products that respondent sells." Ante, at 2172. And that may be so. But there is no "most they are able to do" test. After all, the "most" a California firm's marketing employee may be able "to do" to secure orders from New York customers is to post an advertisement on the Internet, but that fact does not help qualify the posting employee as a "salesman." The Court adds that it means to apply this test only when the law precludes "an entire industry ... from selling its products in the ordinary manner." Ante, at 2172, n. 23. But the law might preclude an industry from selling its products through an outside salesman without thereby leading the legal term "outside salesman" to apply to whatever is the next best thing. In any event, the Court would be wrong to assume, if it does assume, that there is in nearly every industry an outside salesman lurking somewhere (if only we can find him). An industry might, after all, sell its goods through wholesalers or retailers, while using its own outside employees to encourage sales only by providing third parties with critically important information.
The Court expresses concern lest a holding that detailers are not "salesmen" lead to holdings that the statute forbids treating as a "salesman" an employee "who takes an order from a retailer but then transfers the order to a jobber's employee to be filled," ante, at 2174, or "a car salesman who receives a commitment to buy but then asks his or her assistant to enter the order into the computer," ibid. But there is no need for any such fear. Both these examples involve employees who are salesmen because they obtain a firm commitment to buy the product. See 1949 Report 83 (as to the first example, such an employee "has obtained a commitment from the customer"); 69 Fed.Reg. 22163 (2004) (as to the second example, explaining that "[e]xempt status should not depend on ... who types the order into a computer," but maintaining requirement that a salesman "obtai[n] a commitment to buy from the person to whom he is selling"). The problem facing the detailer is that he does not obtain any such commitment.
Finally, the Court points to the detailers' relatively high pay, their uncertain hours, the location of their work, their independence, and the fact that they frequently work overtime, all as showing that detailers fall within the basic purposes of the statutory provision that creates exceptions from wage and hour requirements.
For these reasons, with respect, I dissent.
1. 29 C.F.R. § 541.500 (2011) provides:
2. 29 C.F.R. § 541.501 (2011) provides:
3. 29 C.F.R. § 541.503 (2011) provides: