Novartis to pay up to $99 million to settle staff overtime pay lawsuit

A Novartis unit confirmed that it agreed to pay up to $99 million to settle a lawsuit by current and former sales representatives who claimed they were denied overtime pay despite working more than 40 hours per week. Novartis Pharmaceuticals president Andre Wyss remarked that while the company believes it pays employees in accordance with federal and state laws, “it is time to resolve these wage and hour claims.”

The settlement, which has been granted preliminary approval by a federal judge, resolves a 2006 lawsuit that included approximately 7700 plaintiffs who worked for the company between 2002 and 2007, and from January 25, 2009 to the present. In July 2010, a US Court of Appeals ruled that the workers qualified for overtime pay under the federal Fair Labor Standards Act, a ruling that was subsequently upheld by the US Supreme Court. According to a lawyer representing the plaintiffs, payouts will vary based on length of employment and compensation, as well as on how many plaintiffs choose to take part in the settlement.

Wyss noted that “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 US law.” However, he said “we believe this settlement is in the best interest of our employees and the company.”

The US Supreme Court in November agreed to address the same issue after another federal appeals court said workers at a unit of GlaxoSmithKline were not entitled to overtime pay.