Wall Street Journal, January 25, 2012 – Novartis Settles U.S. Overtime Case

Posted January 25th, 2012.

By CHAD BRAY

A Novartis AG U.S. subsidiary agreed to pay $99 million to settle long-running overtime litigation involving its sale representatives.

A group of current and former sales representatives sued Novartis Pharmaceuticals Corp. in 2006, seeking overtime pay for hours worked in excess of 40 hours a week.

A federal district judge in New York agreed with Novartis that the sales representatives were exempt from federal overtime rules. But the Second U.S. Circuit Court of Appeals disagreed and threw out the lower court’s ruling in July 2010. The U.S. Supreme Court declined to hear the case last year.

The settlement is subject to final court approval.

According to the electronic case file, U.S. District Judge Paul A. Crotty in Manhattan said at a pretrial conference Tuesday that he would grant preliminary approval to the settlement when he received it. He scheduled a fairness hearing for May 31.

“We are pleased to have secured a $99 million settlement wherein Novartis compensates it sales representatives for years of overtime pay,” said David Sanford, a lawyer for the sales representatives.

“We have been litigating this case for nearly six years and the company has determined that it is time to resolve these wage and hour claims,” André Wyss, president of Novartis Pharmaceuticals Corp., said in a prepared statement. “We remain confident that sales representatives should continue to be classified as exempt from overtime because their autonomy and incentive compensation are typical of exempt employees as defined by U.S. law.”

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