Filed: Jun. 18, 2012
Latest Update: Dec. 06, 2017
Summary: (Slip Opinion) OCTOBER TERM, 2011 1 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321 , 337. SUPREME COURT OF THE UNITED STATES Syllabus CHRISTOPHER ET AL. v. SMITHKLINE BEECHAM COR
Summary: (Slip Opinion) OCTOBER TERM, 2011 1 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321 , 337. SUPREME COURT OF THE UNITED STATES Syllabus CHRISTOPHER ET AL. v. SMITHKLINE BEECHAM CORP..
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(Slip Opinion) OCTOBER TERM, 2011 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co.,
200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
CHRISTOPHER ET AL. v. SMITHKLINE BEECHAM
CORP., DBA GLAXOSMITHKLINE
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 11–204. Argued April 16, 2012—Decided June 18, 2012
The Fair Labor Standards Act (FLSA) requires employers to pay em-
ployees overtime wages, see
29 U.S. C. §207(a), but this requirement
does not apply with respect to workers employed “in the capacity of
outside salesman,” §213(a)(1). Congress did not elaborate on the
meaning of “outside salesman,” but it delegated authority to the De-
partment of Labor (DOL) to issue regulations to define the term.
Three of the DOL’s regulations are relevant to this case. First, 29
CFR §541.500 defines “outside salesman” to mean “any employee . . .
[w]hose primary duty is . . . making sales within the meaning of [
29
U.S. C. §203(k)].” §§541.500(a)(1)(2). Section 203(k), in turn, states
that “ ‘[s]ale’ or ‘sell’ includes any sale, exchange, contract to sell,
consignment for sale, shipment for sale, or other disposition.” Se-
cond, §541.501 clarifies that “[s]ales within the meaning of [§203(k)]
include the transfer of title to tangible property.” §541.501(b). Third,
§541.503 provides that promotion work that is “performed incidental
to and in conjunction with an employee’s own outside sales or solici-
tations is exempt work,” whereas promotion work that is “incidental
to sales made, or to be made, by someone else is not.” §541.503(a).
The DOL provided additional guidance in connection with its prom-
ulgation of these regulations, stressing that an employee is an “out-
side salesman” when the employee “in some sense, has made sales.”
69 Fed. Reg. 22162.
The prescription drug industry is subject to extensive federal regu-
lation, including the requirement that prescription drugs be dis-
pensed only upon a physician’s prescription. In light of this require-
ment, pharmaceutical companies have long focused their direct
marketing efforts on physicians. Pharmaceutical companies promote
2 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Syllabus
their products to physicians through a process called “detailing,”
whereby employees known as “detailers” or “pharmaceutical sales
representatives” try to persuade physicians to write prescriptions for
the products in appropriate cases.
Petitioners were employed by respondent as pharmaceutical sales
representatives for roughly four years, and during that time their
primary objective was to obtain a nonbinding commitment from phy-
sicians to prescribe respondent’s products in appropriate cases. Each
week, petitioners spent about 40 hours in the field calling on physi-
cians during normal business hours and an additional 10 to 20 hours
attending events and performing other miscellaneous tasks. Peti-
tioners 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, and their gross pay included both a
base salary and incentive pay. The amount of incentive pay was de-
termined based on the performance of petitioners’ assigned portfolio
of drugs in their assigned sales territories. It is undisputed that peti-
tioners were not paid time-and-a-half wages when they worked more
than 40 hours per week.
Petitioners filed suit, alleging that respondent violated the FLSA
by failing to compensate them for overtime. 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 District
Court agreed and granted summary judgment to respondent. Peti-
tioners filed a motion to alter or amend the judgment, contending
that the District Court had erred in failing to accord controlling def-
erence to the DOL’s interpretation of the pertinent regulations, which
the DOL had announced in an amicus brief filed in a similar action.
The District Court rejected this argument and denied the motion.
The Ninth Circuit, agreeing that the DOL’s interpretation was not
entitled to controlling deference, affirmed.
Held: Petitioners qualify as outside salesmen under the most reasona-
ble interpretation of the DOL’s regulations. Pp. 8–25.
(a) The DOL filed amicus briefs in the Second Circuit and the
Ninth Circuit in which it took the view that “a ‘sale’ for the purposes
of the outside sales exemption requires a consummated transaction
directly involving the employee for whom the exemption is sought.”
Brief for Secretary of Labor as Amicus Curiae in In re Novartis Wage
and Hour Litigation, No. 09–0437 (CA2), p. 11. The DOL changed
course after the Court granted certiorari in this case, however, and
now maintains that “[a]n employee does not make a ‘sale’ . . . unless
he actually transfers title to the property at issue.” Brief for United
States as Amicus Curiae 1213. The DOL’s current interpretation of
Cite as: 567 U. S. ____ (2012) 3
Syllabus
its regulations is not entitled to deference under Auer v. Robbins,
519
U.S. 452. Although Auer ordinarily calls for deference to an agency’s
interpretation of its own ambiguous regulation, even when that in-
terpretation is advanced in a legal brief, see, id., at 461462, this
general rule does not apply in all cases. Deference is inappropriate,
for example, when the agency’s interpretation is “ ‘plainly erroneous
or inconsistent with the regulation,’ ” id., at 461, or when there is
reason to suspect that the interpretation “does not reflect the agen-
cy’s fair and considered judgment on the matter,” id., at 462. There
are strong reasons for withholding Auer deference in this case. Peti-
tioners invoke the DOL’s interpretation to impose potentially mas-
sive liability on respondent for conduct that occurred well before the
interpretation was announced. To defer to the DOL’s interpretation
would result in precisely the kind of “unfair surprise” against which
this Court has long warned. See, e.g., Long Island Care at Home,
Ltd. v. Coke,
551 U.S. 158, 170171. 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 do not provide clear notice. Even
more important, despite the industry’s decades-long practice, the
DOL never initiated any enforcement actions with respect to detail-
ers or otherwise suggested that it thought the industry was acting
unlawfully. The only plausible explanation for the DOL’s inaction is
acquiescence. Whatever the general merits of Auer deference, it is
unwarranted here. The DOL’s interpretation should instead be given
a measure of deference proportional to its power to persuade. See
United States v. Mead Corp.,
533 U.S. 218, 228. Pp. 8–14.
(b) The DOL’s current interpretation—that a sale demands a trans-
fer of title—is quite unpersuasive. It plainly lacks the hallmarks of
thorough consideration. Because the DOL first announced its view
that pharmaceutical sales representatives are not outside salesmen
in a series of amicus briefs, there was no opportunity for public com-
ment, and the interpretation that initially emerged from the DOL’s
internal decisionmaking process proved to be untenable. The inter-
pretation is also flatly inconsistent with the FLSA. The statute de-
fines “sale” to mean, inter alia, a “consignment for sale,” and a “con-
signment for sale” does not involve the transfer of title. The DOL
relies heavily on 29 CFR §541.501, which provides that “[s]ales . . .
include the transfer of title to tangible property,” §541.501(b), but it
is apparent that this regulation does not mean that a sale must in-
clude a transfer of title, only that transactions involving a transfer of
title are included within the term “sale.” The DOL’s “explanation
that obtaining a non-binding commitment to prescribe a drug consti-
tutes promotion, and not sales,” Reply Brief for Petitioners 17, is also
4 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Syllabus
unconvincing. Since promotion work that is performed incidental to
an employee’s own sales is exempt, the DOL’s conclusion that detail-
ers perform only nonexempt promotion work is only as strong as the
reasoning underlying its conclusion that those employees do not
make sales. Pp. 14–16.
(c) Because the DOL’s interpretation is neither entitled to Auer
deference nor persuasive in its own right, traditional tools of inter-
pretation must be employed to determine whether petitioners are ex-
empt outside salesmen. Pp. 16–24.
(1) The FLSA does not furnish a clear answer to this question,
but it provides at least one interpretive clue by exempting anyone
“employed . . . in the capacity of [an] outside salesman.”
29 U.S. C.
§213(a)(1). The statute’s emphasis on “capacity” counsels in favor of
a functional, rather than a formal, inquiry, one that views an em-
ployee’s responsibilities in the context of the particular industry in
which the employee works. The DOL’s regulations provide additional
guidance. Section 541.500 defines an outside salesman as an em-
ployee whose primary duty is “making sales” and adopts the statu-
tory definition of “sale.” This statutory definition contains at least
three important textual clues. First, the definition is introduced with
the verb “includes,” which indicates that the examples enumerated
in the text are illustrative, not exhaustive. See Burgess v. United
States,
553 U.S. 124, 131, n. 3. Second, the list of transactions in-
cluded in the statutory definition is modified by “any,” which, in the
context of §203(k), is best read to mean “ ‘one or some indiscriminate-
ly of whatever kind,’ ” United States v. Gonzales,
520 U.S. 1, 5.
Third, the definition includes the broad catchall phrase “other dispo-
sition.” Under the rule of ejusdem generis, the catchall phrase is
most reasonably interpreted as including those arrangements that
are tantamount, in a particular industry, to a paradigmatic sale of a
commodity. Nothing in the remaining regulations requires a narrow-
er construction. Pp. 16–20.
(2) Given this interpretation of “other disposition,” it follows that
petitioners made sales under the FLSA and thus are exempt outside
salesmen within the meaning of the DOL’s regulations. Petitioners
obtain nonbinding commitments from physicians to prescribe re-
spondent’s drugs. This kind of arrangement, in the unique regula-
tory environment within which pharmaceutical companies operate,
comfortably falls within the catchall category of “other disposition.”
That petitioners bear all of the external indicia of salesmen provides
further support for this conclusion. And this holding also comports
with the apparent purpose of the FLSA’s exemption. The exemption
is premised on the belief that exempt employees normally earn sala-
ries well above the minimum wage and perform a kind of work that is
Cite as: 567 U. S. ____ (2012) 5
Syllabus
difficult to standardize to a particular time frame and that cannot
easily be spread to other workers. Petitioners—each of whom earned
an average of more than $70,000 per year and spent 10 to 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.
Pp. 20–22.
(3) Petitioners’ remaining arguments are also unavailing.
Pp. 22–24.
635 F.3d 383, affirmed.
ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J.,
and SCALIA, KENNEDY, and THOMAS, JJ., joined. BREYER, J., filed a dis-
senting opinion, in which GINSBURG, SOTOMAYOR, and KAGAN, JJ.,
joined.
Cite as: 567 U. S. ____ (2012) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 11–204
_________________
MICHAEL SHANE CHRISTOPHER, ET AL., PETITION-
ERS v. SMITHKLINE BEECHAM CORPORATION
DBA GLAXOSMITHKLINE
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 18, 2012]
JUSTICE ALITO delivered the opinion of the Court.
The Fair Labor Standards Act (FLSA) imposes mini
mum wage and maximum hours requirements on employ
ers, see
29 U.S. C. §§206207 (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 sales
man,” as defined by Department of Labor (DOL or De
partment) regulations, encompasses pharmaceutical sales
representatives whose primary duty is to obtain nonbinding
commitments from physicians to prescribe their employ-
er’s prescription drugs in appropriate cases. We conclude
that these employees qualify as “outside salesm[e]n.”
I
A
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 (1981); see
also
29 U.S. C. §202(a). Among other requirements, the
2 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
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).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 regula
tions issued in the years immediately following the FLSA’s
enactment. See 29 CFR §§541.500541.504 (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)]”2 and “[w]ho is
customarily and regularly engaged away from the employ
er’s place or places of business in performing such primary
——————
1 This provision also exempts workers “employed in a bona fide execu
tive, administrative, or professional capacity.”
29 U.S. C. §213(a)(1).
2 The definition also includes any employee “[w]hose primary duty is
. . . obtaining orders or contracts for services or for the use of facilities
for which a consideration will be paid by the client or customer.” 29
CFR §541.500(a)(1)(ii). That portion of the definition is not at issue in
this case.
Cite as: 567 U. S. ____ (2012) 3
Opinion of the Court
duty.”3 §§541.500(a)(1)(2). The referenced statutory
provision,
29 U.S. C. §203(k), states that “ ‘[s]ale’ or ‘sell’
includes any sale, exchange, contract to sell, consignment
for sale, shipment for sale, or other disposition.” Thus, un-
der the general regulation, an outside salesman is any
employee whose primary duty is making any sale, ex
change, contract to sell, consignment for sale, shipment for
sale, or other disposition.
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 CFR
§541.501(b).
Finally, the promotion-work regulation identifies “[p]ro
motion 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 circum
stances under which it is performed.” §541.503(a). Pro
motion work that is “performed incidental to and in
conjunction with an employee’s own outside sales or
solicitations is exempt work,” whereas promotion work
that is “incidental to sales made, or to be made, by some
one else is not exempt outside sales work.” Ibid.
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 regu
lations. 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,
——————
3 It is undisputed that petitioners were “customarily and regularly
engaged away” from respondent’s place of business in performing their
responsibilities.
4 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
Report and Recommendations on Proposed Revisions of
Regulations, Part 541 (1949) (hereinafter 1949 Report); 69
Fed. Reg. 2216022163 (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.
B
Respondent SmithKline Beecham Corporation is in the
business of developing, manufacturing, and selling pre
scription 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.4 In light of this require
——————
4 Congress imposed this requirement in 1951 when it amended the
Federal Food, Drug, and Cosmetic Act (FDCA) to provide that drugs
that are “not safe for use except under the supervision of a practitioner”
may be dispensed “only . . . upon a . . . prescription of a practitioner
licensed by law to administer such drug.” Durham-Humphrey Amend
ment of 1951, ch. 578, 65 Stat. 648649 (codified at
21 U.S. C. §353(b)).
As originally enacted in 1938, the FDCA allowed manufacturers to
designate certain drugs as prescription only, but “it did not say which
drugs were to be sold by prescription or that there were any drugs that
could not be sold without a prescription.” Temin, The Origin of Com
pulsory Drug Prescriptions, 22 J. Law & Econ. 91, 98 (1979). Prior to
Congress’ enactment of the FDCA, a prescription was not needed to
obtain any drug other than certain narcotics. See id., at 97.
Cite as: 567 U. S. ____ (2012) 5
Opinion of the Court
ment, pharmaceutical companies have long focused their
direct marketing efforts, not on the retail pharmacies
that dispense prescription drugs, but rather on the medi-
cal practitioners who possess the authority to prescribe the
drugs in the first place. Pharmaceutical companies pro
mote their prescription drugs to physicians through a
process called “detailing,” whereby employees known as
“detailers” or “pharmaceutical sales representatives”
provide information to physicians about the company’s
products in hopes of persuading them to write prescrip
tions for the products in appropriate cases. See Sorrell v.
IMS Health Inc.,
564 U.S. ___, ___ (2011) (slip op., at 12)
(describing the process of “detailing”). The position of
“detailer” has existed in the pharmaceutical industry in
substantially its current form since at least the 1950’s,
and in recent years the industry has employed more than
90,000 detailers nationwide. See
635 F.3d 383, 387, and
n. 5, 396 (CA9 2011).
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,5 they were responsible
for calling on physicians in an assigned sales territory to
discuss the features, benefits, and risks of an assigned
portfolio of respondent’s prescription drugs. Petitioners’
primary objective was to obtain a nonbinding commit
ment6 from the physician to prescribe those drugs in ap
propriate cases, and the training that petitioners received
underscored the importance of that objective.
Petitioners spent about 40 hours each week in the field
calling on physicians. These visits occurred during normal
——————
5 Respondent terminated Christopher’s employment in 2007, and
Buchanan left voluntarily the same year to accept a similar position
with another pharmaceutical company.
6 The parties agree that the commitment is nonbinding.
6 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
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 $76,000.7 Petition
ers’ gross pay included both a base salary and incentive
pay. The amount of petitioners’ incentive pay was based
on the sales volume or market share of their assigned
drugs in their assigned sales territories,8 and this amount
was uncapped. Christopher’s incentive pay exceeded 30
percent of his gross pay during each of his years of em
ployment; Buchanan’s exceeded 25 percent. It is undis
puted that respondent did not pay petitioners time-and-a
half wages when they worked in excess of 40 hours per
week.
C
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 re
lief. Respondent moved for summary judgment, arguing
that petitioners were “employed . . . in the capacity of
——————
7 The median pay for pharmaceutical detailers nationwide exceeds
$90,000 per year. See Brief for Respondent 14.
8 The amount of incentive pay is not formally tied to the number of
prescriptions written or commitments obtained, but because retail
pharmacies are prohibited from dispensing prescription drugs without
a physician’s prescription, retail sales of respondent’s products neces
sarily reflect the number of prescriptions written.
Cite as: 567 U. S. ____ (2012) 7
Opinion of the Court
outside salesman,” §213(a)(1), and therefore were exempt
from the FLSA’s overtime compensation requirement.9
The District Court agreed and granted summary judgment
to respondent. See App. to Pet. for Cert. 37a47a.
After the District Court issued its order, petitioners filed
a motion to alter or amend the judgment, contending that
the District Court had erred in failing to accord control-
ling deference to the DOL’s interpretation of the pertinent
regulations. That interpretation had been announced in
an uninvited amicus brief filed by the DOL in a similar
action then pending in the Second Circuit. See Brief for
Secretary of Labor as Amicus Curiae in In re Novartis
Wage and Hour Litigation, No. 09–0437 (hereinafter
Secretary’s Novartis Brief). The District Court rejected
this argument and denied the motion. See App. to Pet. for
Cert. 48a52a.
The Court of Appeals for the Ninth Circuit affirmed.
See
635 F.3d 383. The Court of Appeals agreed that
the DOL’s interpretation10 was not entitled to controlling
deference. See id., at 393395. It held that, because the
commitment that petitioners obtained from physicians
was the maximum possible under the rules applicable to
the pharmaceutical industry, petitioners made sales with
in the meaning of the regulations. See id., at 395397.
The court found it significant, moreover, that the DOL had
previously interpreted the regulations as requiring only
that an employee “ ‘in some sense’ ” make a sale, see id.,
at 395396 (emphasis deleted), and had “acquiesce[d] in
the sales practices of the drug industry for over seventy
——————
9 Respondent also argued that petitioners were exempt administra
tive employees. The District Court and the Court of Appeals found it
unnecessary to reach that argument, and the question is not before us.
10 The DOL filed an amicus brief in the Ninth Circuit advancing sub
stantially the same interpretation it had advanced in its brief in the
Second Circuit. See Brief for Secretary of Labor as Amicus Curiae in
No. 10–15257.
8 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
years,” id., at 399.
The Ninth Circuit’s decision conflicts with the Second
Circuit’s decision in In re Novartis Wage and Hour Litiga-
tion,
611 F.3d 141, 153155 (2010) (holding that the
DOL’s interpretation is entitled to controlling deference).
We granted certiorari to resolve this split, 565 U. S. ___
(2011), and we now affirm the judgment of the Ninth
Circuit.
II
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. Natu-
ral Resources Defense Council, Inc.,
467 U.S. 837 (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 (1997). It is to that ques
tion that we now turn.
A
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 Depart
ment has subsequently filed similar amicus briefs in other
cases, including the case now before us.11 While the DOL’s
ultimate conclusion that detailers are not exempt has
remained unchanged since 2009, the same cannot be said
of its reasoning. In both the Second Circuit and the Ninth
——————
11 The DOL invites “interested parties to inform it of private cases
involving the misclassification of employees in contravention of the new
Part 541 rule” so that it may file amicus briefs “in appropriate cases to
share with courts the Department’s view of the proper application of
the new Part 541 rule.” See Dept. of Labor, Office of Solicitor, Overtime
Security Amicus Program, http://www.dol.gov/sol/541amicus.htm (as visited
June 15, 2012, and available in Clerk of Court’s case file).
Cite as: 567 U. S. ____ (2012) 9
Opinion of the Court
Circuit, the DOL took the view that “a ‘sale’ for the pur
poses of the outside sales exemption requires a con-
summated transaction directly involving the employee for
whom the exemption is sought.” Secretary’s Novartis
Brief 11; see also Brief for Secretary of Labor as Amicus
Curiae in No. 10–15257 (CA9), p. 12. Perhaps because
of the nebulous nature of this “consummated transaction”
test,12 the Department changed course after we granted
certiorari in this case. The Department now takes the
position 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.” Brief for
United States as Amicus Curiae 1213 (hereinafter U. S.
Brief).13 Petitioners and the DOL assert that this new
interpretation of the regulations is entitled to controlling
deference. See Brief for Petitioners 3142; U. S. Brief
3034.14
——————
12 For example, it is unclear why a physician’s nonbinding commit
ment to prescribe a drug in an appropriate case cannot qualify as a sale
under this test. The broad term “transaction” easily encompasses such
a commitment. See Webster’s Third New International Dictionary
2425 (2002) (hereinafter Webster’s Third) (defining “transaction” to
mean “a communicative action or activity involving two parties or two
things reciprocally affecting or influencing each other”). A “consum
mated transaction” is simply a transaction that has been fully completed.
See id., at 490 (defining “consummate” to mean “to bring to comple
tion”). And a pharmaceutical sales representative who obtains such a
commitment is “directly involv[ed]” in this transaction. Thus, once a
pharmaceutical sales representative and a physician have fully com
pleted their agreement, it may be said that they have entered into a
“consummated transaction.”
13 When pressed to clarify its position at oral argument, the DOL
suggested that a “transfer of possession in contemplation of a transfer
of title” might also suffice. Tr. of Oral Arg. 17.
14 Neither petitioners nor the DOL asks us to accord controlling def
erence to the “consummated transaction” interpretation the Depart
ment advanced in its briefs in the Second Circuit and Ninth Circuit, nor
could we given that the Department has now abandoned that interpre
tation. See Estate of Cowart v. Nicklos Drilling Co.,
505 U.S. 469, 480
10 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
Although Auer ordinarily calls for deference to an agen
cy’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. ___, ___ (2011)
(slip op., at 12); Auer, 519 U. S., at 461462, this general
rule does not apply in all cases. Deference is undoubtedly
inappropriate, for example, when the agency’s interpreta
tion is “ ‘plainly erroneous or inconsistent with the regu
lation.’ ” Id., at 461 (quoting Robertson v. Methow Valley
Citizens Council,
490 U.S. 332, 359 (1989)). And defer
ence 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; see also, e.g., Chase
Bank, supra, at ___ (slip op., at 14). This might occur
when the agency’s interpretation conflicts with a prior
interpretation, see, e.g., Thomas Jefferson Univ. v. Shala-
la,
512 U.S. 504, 515 (1994), or when it appears that the
interpretation is nothing more than a “convenient litigat
ing position,” Bowen v. Georgetown Univ. Hospital,
488
U.S. 204, 213 (1988), or a “ ‘post hoc rationalizatio[n]’
advanced by an agency seeking to defend past agency
action against attack,” Auer, supra, at 462 (quoting Bowen,
supra, at 212; alteration in original).
In this case, there are strong reasons for withholding
the deference that Auer generally requires. Petitioners in
voke 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 warn
——————
(1992) (noting that “it would be quite inappropriate to defer to an
interpretation which has been abandoned by the policymaking agency
itself ”).
Cite as: 567 U. S. ____ (2012) 11
Opinion of the Court
ing of the conduct [a regulation] prohibits or requires.”
Gates & Fox Co. v. Occupational Safety and Health Review
Comm’n,
790 F.2d 154, 156 (CADC 1986) (Scalia, J.).15
Indeed, it would result in precisely the kind of “unfair
surprise” against which our cases have long warned. See
Long Island Care at Home, Ltd. v. Coke,
551 U.S.
158, 170171 (2007) (deferring to new interpretation that
“create[d] no unfair surprise” because agency had pro
ceeded through notice-and-comment rulemaking); Martin v.
Occupational Safety and Health Review Comm’n,
499 U.S.
144, 158 (1991) (identifying “adequacy of notice to regu
lated parties” as one factor relevant to the reasonableness
of the agency’s interpretation); NLRB v. Bell Aerospace Co.,
416 U.S. 267, 295 (1974) (suggesting that an agency
should not change an interpretation in an adjudicative
proceeding where doing so would impose “new liability . . .
on individuals for past actions which were taken in good
——————
15 Accord, Phelps Dodge Corp. v. Federal Mine Safety and Health
Review Comm’n,
681 F.2d 1189, 1192 (CA9 1982) (recognizing that “the
application of a regulation in a particular situation may be challenged
on the ground that it does not give fair warning that the allegedly
violative conduct was prohibited”); Kropp Forge Co. v. Secretary of
Labor,
657 F.2d 119, 122 (CA7 1981) (refusing to impose sanctions
where standard the regulated party allegedly violated “d[id] not provide
‘fair warning’ of what is required or prohibited”); Dravo Corp. v. Occu-
pational Safety and Health Review Comm’n,
613 F.2d 1227, 1232–1233
(CA3 1980) (rejecting agency’s expansive interpretation where agency
did not “state with ascertainable certainty what is meant by the stand
ards [it] ha[d] promulgated” (internal quotation marks omitted and
emphasis deleted)); Diamond Roofing Co. v. Occupational Safety and
Health Review Comm’n,
528 F.2d 645, 649 (CA5 1976) (explaining that
“statutes and regulations which allow monetary penalties against those
who violate them” must “give an employer fair warning of the conduct
[they] prohibi[t] or requir[e]”); 1 R. Pierce, Administrative Law Treatise
§6.11, p. 543 (5th ed. 2010) (observing that “[i]n penalty cases, courts
will not accord substantial deference to an agency’s interpretation of
an ambiguous rule in circumstances where the rule did not place the
individual or firm on notice that the conduct at issue constituted a
violation of a rule”).
12 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
faith reliance on [agency] pronouncements” or in a case
involving “fines or damages”).
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 defini
tion of “sale,” and that definition, in turn, employs the
broad catchall phrase “other disposition.” See 29 CFR
§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 guid
ance plainly requires a contrary reading. See Preamble
22162 (explaining that an employee must “in some sense”
make a sale); 1940 Report 46 (same).
Even more important, despite the industry’s decades
long practice of classifying pharmaceutical detailers as
exempt employees, the DOL never initiated any enforce
ment actions with respect to detailers or otherwise sug
gested that it thought the industry was acting unlaw
fully.16 We acknowledge that an agency’s enforcement
decisions are informed by a host of factors, some bearing
no relation to the agency’s views regarding whether a
violation has occurred. See, e.g., Heckler v. Chaney,
470
U.S. 821, 831 (1985) (noting that “an agency decision not
——————
16 It appears that the DOL only once directly opined on the exempt
status of detailers prior to 2009. In 1945, the Wage and Hour Division
issued an opinion letter tentatively concluding that “medical detailists”
who performed “work . . . aimed at increasing the use of [their employ
er’s] product in hospitals and through physicians’ recommendations”
qualified as administrative employees. Opinion Letter from Dept. of
Labor, Wage and Hour Division (May 19, 1945), 1 CCH Labor Law
Service, Federal Wage-Hour Guide ¶33,093. But that letter did not
address the outside salesman exemption.
Cite as: 567 U. S. ____ (2012) 13
Opinion of the Court
to enforce often involves a complicated balancing of a
number of factors which are peculiarly within its exper
tise”). But where, as here, an agency’s announcement of
its interpretation is preceded by a very lengthy period of
conspicuous inaction, the potential for unfair surprise is
acute. As the Seventh Circuit has noted, while it may be
“possible for an entire industry to be in violation of the
[FLSA] for a long time without the Labor Department
noticing,” the “more plausible hypothesis” is that the De
partment did not think the industry’s practice was un
lawful. Yi v. Sterling Collision Centers, Inc.,
480 F.3d
505, 510511 (2007). There are now approximately 90,000
pharmaceutical sales representatives; the nature of their
work has not materially changed for decades and is well
known; these employees are well paid; and like quintes
sential outside salesmen, they do not punch a clock and
often work more than 40 hours per week. Other than
acquiescence, no explanation for the DOL’s inaction is
plausible.
Our practice of deferring to an agency’s interpretation
of its own ambiguous regulations undoubtedly has im
portant advantages,17 but this practice also creates a risk
that agencies will promulgate vague and open-ended
regulations that they can later interpret as they see fit,
thereby “frustrat[ing] the notice and predictability pur
poses of rulemaking.” Talk America, Inc. v. Michigan Bell
Telephone Co.,
564 U.S. ___, ___ (2011) (SCALIA, J., con
curring) (slip op., at 3); see also Stephenson & Pogoriler,
Seminole Rock’s Domain, 79 Geo. Wash. L. Rev. 1449,
14611462 (2011); Manning, Constitutional Structure and
——————
17 For instance, it “makes the job of a reviewing court much easier,
and since it usually produces affirmance of the agency’s view without
conflict in the Circuits, it imparts (once the agency has spoken to clarify
the regulation) certainty and predictability to the administrative
process.” Talk America, Inc. v. Michigan Bell Telephone Co.,
564 U.S.
___, ___ (2011) (SCALIA, J., concurring) (slip op., at 3).
14 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
Judicial Deference to Agency Interpretations of Agency
Rules, 96 Colum. L. Rev. 612, 655668 (1996). It is one
thing to expect regulated parties to conform their conduct
to an agency’s interpretations once the agency announces
them; it is quite another to require regulated parties to
divine the agency’s interpretations in advance or else be
held liable when the agency announces its interpretations
for the first time in an enforcement proceeding and de
mands deference.
Accordingly, whatever the general merits of Auer def
erence, it is unwarranted here. We instead accord the
Department’s interpretation a measure of deference propor
tional to the “ ‘thoroughness evident in its consideration,
the validity of its reasoning, its consistency with earlier
and later pronouncements, and all those factors which
give it power to persuade.’ ” United States v. Mead Corp.,
533 U.S. 218, 228 (2001) (quoting Skidmore v. Swift &
Co.,
323 U.S. 134, 140 (1944)).
B
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 pharma
ceutical sales representatives do not qualify as outside
salesmen in a series of amicus briefs, there was no oppor
tunity for public comment, and the interpretation that
initially emerged from the Department’s internal deci
sionmaking process proved to be untenable. After arguing
successfully in the Second Circuit and then unsucess-
fully in the Ninth Circuit that a sale for present purposes
simply requires a “consummated transaction,” the DOL ad
vanced 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’
Cite as: 567 U. S. ____ (2012) 15
Opinion of the Court
exemption unless he actually transfers title to the prop
erty at issue.” U. S. Brief 1213.
This new interpretation is flatly inconsistent with the
FLSA, which defines “sale” to mean, inter alia, a “con
signment for sale.” A “consignment for sale” does not
involve the transfer of title. See, e.g., Sturm v. Boker,
150
U.S. 312, 330 (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 Sell
ing 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 pur
chaser if the consignee in fact sells the good). Much the
same may be said about a physician’s nonbinding com
mitment to prescribe a particular product in an appropri
ate 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 CFR §541.501(b) (emphasis
added). This regulation, however, provides little support
for the DOL’s position. The DOL reads the sales regula
tion 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
16 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
“consignment for sale” qualifies as a sale. Since a con
signment 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.”
Petitioners invite us to look past the DOL’s “determina
tion that a sale must involve the transfer of title” and
instead defer to the Department’s “explanation that ob
taining a non-binding commitment to prescribe a drug
constitutes promotion, and not sales.” Reply Brief for
Petitioners 17. The problem with the DOL’s interpreta
tion of the promotion-work regulation, however, is that it
depends almost entirely on the DOL’s flawed transfer-of
title interpretation. The promotion-work regulation does
not distinguish between promotion work and sales; rather,
it distinguishes between exempt promotion work and
nonexempt promotion work. Since promotion work that is
performed incidental to an employee’s own sales is ex
empt, the DOL’s conclusion that pharmaceutical detailers
perform only nonexempt promotion work is only as strong
as the reasoning underlying its conclusion that those
employees do not make sales. For the reasons already
discussed, we find this reasoning wholly unpersuasive.
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 interpreta
tion to determine whether petitioners are exempt outside
salesmen.
C
1
We begin with the text of the FLSA. Although the
provision that establishes the overtime salesman exemp
tion does not furnish a clear answer to the question before
us, it provides at least one interpretive clue: It exempts
Cite as: 567 U. S. ____ (2012) 17
Opinion of the Court
anyone “employed . . . in the capacity of [an] outside
salesman.”
29 U.S. C. §213(a)(1) (emphasis added). “Ca
pacity,” 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 func
tional, 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 CFR
§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 exam
ples enumerated in the text are intended to be illustrative,
not exhaustive. See Burgess v. United States,
553 U.S.
124, 131, n. 3 (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 provi
sions 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, asso
ciation, corporation, business trust, legal representative,
or any organized group of persons” (emphasis added)).
Second, the list of transactions included in the statu
tory definition of sale is modified by the word “any.” We
have recognized that the modifier “any” can mean “differ
ent things depending upon the setting,” Nixon v. Missouri
18 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
Municipal League,
541 U.S. 125, 132 (2004), but in the
context of
29 U.S. C. §203(k), it is best read to mean “ ‘one
or some indiscriminately of whatever kind,’ ” United States
v. Gonzales,
520 U.S. 1, 5 (1997) (quoting Webster’s Third
New International Dictionary 97 (1976)). That is so
because Congress defined “sale” to include both the un
modified word “sale” and transactions that might not be
considered sales in a technical sense, including exchanges
and consignments for sale.18
Third, Congress also included a broad catchall phrase:
“other disposition.” Neither the statute nor the regula
tions define “disposition,” but dictionary definitions of the
term range from “relinquishment or alienation” to “ar
rangement.” 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 any
thing”); 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.19 But the
limit the DOL posits, one that would confine the phrase to
dispositions involving “contract[s] for the exchange of
goods or services in return for value,” see U. S. Brief 20, is
——————
18 Given that the FLSA provides its own definition of “sale” that is
more expansive than the term’s ordinary meaning, the DOL’s reliance
on dictionary definitions of the word “sale” is misplaced. See, e.g.,
Burgess v. United States,
553 U.S. 124, 130 (2008) (noting that “[w]hen
a statute includes an explicit definition, we must follow that definition”
(internal quotation marks omitted)).
19 The canon of ejusdem generis “limits general terms [that] follow
specific ones to matters similar to those specified.” CSX Transp., Inc. v.
Alabama Dept. of Revenue,
562 U.S. ___, ___ (2011) (slip op., at 16)
(alteration in original; internal quotation marks omitted).
Cite as: 567 U. S. ____ (2012) 19
Opinion of the Court
much too narrow, as is petitioners’ view that a sale re
quires a “firm agreement” or “firm commitment” to buy,
see Tr. of Oral Arg. 64, 66. These interpretations would
defeat Congress’ intent to define “sale” in a broad manner
and render the general statutory language meaningless.
See United States v. Alpers,
338 U.S. 680, 682 (1950)
(instructing that rule of ejusdem generis cannot be em
ployed to “obscure and defeat the intent and purpose of
Congress” or “render general words meaningless”). In
deed, we are hard pressed to think of any contract for the
exchange of goods or services in return for value or any
firm agreement to buy that would not also fall within one
of the specifically enumerated categories.20
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 in
terpreted as including those arrangements that are tan
tamount, in a particular industry, to a paradigmatic sale
of a commodity.
Nothing in the remaining regulations requires a nar
rower construction.21 As discussed above, the sales regu
——————
20 The dissent’s approach suffers from the same flaw. The dissent
contends that, in order to make a sale, an employee must at least
obtain a “firm commitment to buy.” Post, at 10 (opinion of BREYER, J.).
But when an employee who has extended an offer to sell obtains a “firm
commitment to buy,” that transaction amounts to a “contract to sell.”
Given that a “contract to sell” already falls within the statutory defini
tion of “sale,” the dissent’s interpretation would strip the catchall
phrase of independent meaning.
21 In the past, we have stated that exemptions to the FLSA must be
“narrowly construed against the employers seeking to assert them and
their application limited to those [cases] plainly and unmistakably
within their terms and spirit.” Arnold v. Ben Kanowsky, Inc.,
361 U.S.
388, 392 (1960). Petitioners and the DOL contend that Arnold requires
us to construe the outside salesman exemption narrowly, but Arnold is
20 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
lation instructs that sales within the meaning of
29
U.S. C. §203(k) “include the transfer of title to tangible
property,” 29 CFR §541.501(b) (emphasis added), but this
regulation in no way limits the broad statutory definition
of “sale.” And although the promotion-work regulation
distinguishes between promotion work that is incidental
to an employee’s own sales and work that is incidental to
sales made by someone else, see §541.503(a), this distinc
tion tells us nothing about the meaning of “sale.”22
2
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 mean
ing of the DOL’s regulations. Obtaining a nonbinding
commitment from a physician to prescribe one of respond
ent’s drugs is the most that petitioners were able to do to
ensure the eventual disposition of the products that re
——————
inapposite where, as here, we are interpreting a general definition that
applies throughout the FLSA.
22 The dissent’s view that pharmaceutical detailers are more naturally
characterized as nonexempt promotional employees than as exempt out
side salesmen relies heavily on the DOL’s explanation in its 1940 Re
port that “sales promotion men” are not salesmen. See post, at 7; see
also 1940 Report 46. There, the Department described a “sales promo
tion man” as an employee who merely “pav[es] the way for salesmen”
and who frequently “deals with retailers who are not customers of his
own employer but of his employer’s customer” and is “interested in
sales by the retailer, not to the retailer.” 1940 Report 46. The dissent
asserts that detailers are analogous to “sales promotion men” because
they deal with “individuals, namely doctors, ‘who are not customers’ of
their own employer” and “are primarily interested in sales authorized
by the doctor, not to the doctor.” Post, at 7. But this comparison is
inapt. The equivalent of a “sales promotion man” in the pharmaceuti
cal industry would be an employee who promotes a manufacturer’s
products to the retail pharmacies that sell the products after purchas
ing them from a wholesaler or distributor. Detailers, by contrast,
obtain nonbinding commitments from the gatekeepers who must
prescribe the product if any sale is to take place at all.
Cite as: 567 U. S. ____ (2012) 21
Opinion of the Court
spondent sells.23 This kind of arrangement, in the unique
regulatory environment within which pharmaceutical com
panies must operate, comfortably falls within the catch-
all category of “other disposition.”
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 from the physician. They
worked away from the office, with minimal supervision,
and they were rewarded for their efforts with incentive
compensation. It would be anomalous to require respond
ent to compensate petitioners for overtime, while at the
same time exempting employees who function identically to
petitioners in every respect except that they sell physician
administered drugs, such as vaccines and other inject-
able pharmaceuticals, that are ordered by the physician
directly rather than purchased by the end user at a phar
macy with a prescription from the physician.
Our holding also comports with the apparent purpose of
the FLSA’s exemption for outside salesmen. The exemp
tion 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 per
formed a kind of work that “was difficult to standardize to
——————
23 Our point is not, as the dissent suggests, that any employee who
does the most that he or she is able to do in a particular position to
ensure the eventual sale of a product should qualify as an exempt
outside salesman. See post, at 9 (noting that “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”).
Rather, our point is that, when an entire industry is constrained by law
or regulation from selling its products in the ordinary manner, an
employee who functions in all relevant respects as an outside salesman
should not be excluded from that category based on technicalities.
22 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
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 busi
ness hours each week performing work related to his as
signed 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 1420 (explaining that “key
aspects of [detailers’] jobs as they are currently structured
are fundamentally incompatible with treating [detailers]
as hourly employees”).
3
The remaining arguments advanced by petitioners and
the dissent are unavailing. Petitioners contend that de
tailers are more naturally classified as nonexempt promo
tional 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,24 they reason, are the true salesmen in
——————
24 According to one of respondent’s amici, most pharmaceutical com
panies “have systems in place to maintain the inventories of wholesal
ers and retailers of prescription drugs (consisting mainly of periodic
restocking pursuant to a general contract), [and] these systems are
largely ministerial and require only a few employees to administer
them.” Brief for PhRMA as Amicus Curiae 24; see also ibid. (explaining
that one of its members employs more than 2,000 pharmaceutical sales
Cite as: 567 U. S. ____ (2012) 23
Opinion of the Court
the industry, not detailers. This formalistic argument is
inconsistent with the realistic approach that the outside
salesman exemption is meant to reflect.
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 nonex
empt promotional employee a manufacturer’s representa
tive who takes an order from a retailer but then transfers
the order to a jobber’s employee to be filled, or a car
salesman who receives a commitment to buy but then asks
his or her assistant to enter the order into the computer.
This formalistic approach would be difficult to reconcile
with the broad language of the regulations and the stat
utory definition of “sale,” and it is in significant ten
sion with the DOL’s past practice. See 1949 Report 83
(explaining that the manufacturer’s representative was
clearly “performing sales work regardless of the fact that
the order is filled by the jobber rather than directly by his
own employer”); Preamble 22162 (noting that “technologi
cal changes in how orders are taken and processed should
not preclude the exemption for employees who in some
sense make the sales”).
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 4748. 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 (CA10 2008) (ex
——————
representatives but “fewer than ten employees who are responsible for
processing orders from retailers and wholesalers, a ratio that is typical
of how the industry is structured”).
24 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
Opinion of the Court
plaining 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 en
list”); 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 recruit
ers 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 educa
tional 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] in
formation so that the doctor will keep the drug in mind
with an eye toward using it when appropriate.” Post, at 6.
But the record in this case belies that contention. Peti
tioners’ 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 con
vincing physicians to prescribe [respondent’s] products to
their patients”).
Cite as: 567 U. S. ____ (2012) 25
Opinion of the Court
* * *
For these reasons, we conclude that petitioners qualify
as outside salesmen under the most reasonable interpreta
tion of the DOL’s regulations. The judgment of the Court
of Appeals is
Affirmed.
Cite as: 567 U. S. ____ (2012) 1
BREYER, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 11–204
_________________
MICHAEL SHANE CHRISTOPHER, ET AL., PETITION-
ERS v. SMITHKLINE BEECHAM CORPORATION
DBA GLAXOSMITHKLINE
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 18, 2012]
JUSTICE BREYER, with whom JUSTICE GINSBURG, JUS-
TICE SOTOMAYOR, and JUSTICE KAGAN join, dissenting.
The Fair Labor Standards Act (FLSA) exempts from
federal maximum hour and minimum wage requirements
“any employee employed . . . in the capacity of outside
salesman.”
29 U.S. C. §213(a)(1). The question is
whether drug company detailers fall within the scope of
the term “outside salesman.” In my view, they do not.
I
The Court describes the essential aspects of the detail-
er’s job as follows: First, the detailer “provide[s] infor-
mation to physicians about the company’s products in
hopes of persuading them to write prescriptions for the
products in appropriate cases.” Ante, at 5. Second, the
detailers “cal[l] on physicians in an assigned sales terri-
tory to discuss the features, benefits, and risks of an as-
signed 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 6. The Court adds that the
2 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
detailers work with “only minimal supervision” and be-
yond normal business hours “attending events, reviewing
product information, returning phone calls, responding to
e-mails, and performing other miscellaneous tasks.” Ante,
at 6.
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 8–9, I also agree that we should not give the Solic-
itor General’s current interpretive view any especially
favorable weight. Ante, at 14. Thus, I am willing to as-
sume, 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.”
II
The FLSA does not itself define the term “outside
salesman.” Rather, it exempts from wage and hour re-
quirements “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 (1984); see also Long
Island Care at Home, Ltd. v. Coke,
551 U.S. 158, 165
(2007) (explaining that “the FLSA explicitly leaves gaps”
to be filled by regulations).
There are three relevant regulations. The first is enti-
tled “General rule for outside sales employees,” 29 CFR
§541.500 (2011); the second is entitled “Making sales or
obtaining orders,” §541.501; and the third is entitled
Cite as: 567 U. S. ____ (2012) 3
BREYER, J., dissenting
“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 pri-
mary duty is: (i) making sales within the meaning of sec-
tion 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).
The second part of these quoted passages is irrelevant
here, for it concerns matters not at issue, namely “orders
or contracts for services or for the use of facilities.” The
remaining parts of the two regulations are similarly irrel-
evant. See Appendix, infra. Thus, the relevant portions of
the first two regulations say simply that the employee’s
“primary duty” must be “making sales within the meaning
of section 3(k) of the Act.” And §3(k) of the Act says that
the word “ ‘Sale’ or ‘sell’ includes any sale, exchange, con-
tract to sell, consignment for sale, shipment for sale, or
other disposition.”
29 U.S. C. §203(k).
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 pharma-
cist, 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.
4 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
§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 immedi-
ately 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 commit-
ment” 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 Prescrip-
tion 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 avail-
able 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 com-
Cite as: 567 U. S. ____ (2012) 5
BREYER, J., dissenting
mitment” to advise his patient to take the drug (or per-
haps a generic equivalent) as well as to write any neces-
sary prescription. I put to the side the fact that neither
the Court nor the record explains exactly what a “nonbind-
ing commitment” is. Like a “definite maybe,” an “impos-
sible solution,” or a “theoretical experience,” a “nonbinding
commitment” seems to claim more than it can deliver.
Regardless, other than in colloquial speech, to obtain a
commitment to advise a client to buy a product is not to
obtain a commitment to sell that product, no matter how
often the client takes the advice (or the patient does what
the doctor recommends).
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 CFR
§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 char-
acterized 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 detail-
er’s “own sales.”
Three other relevant documents support this reading.
First, the Pharmaceutical Research and Manufacturers
of America (PhRMA), of which respondent is a mem-
ber, publishes a “Code on Interactions with Healthcare Pro-
fessionals.” 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 de-
6 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
scribes 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 inter-
fere 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 com-
mitment 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 treat-
ment 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 commit-
ment 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 salesman exemp-
Cite as: 567 U. S. ____ (2012) 7
BREYER, J., dissenting
tion to employees “[w]hose primary duty is . . . making
sales” (emphasis added)). A detailer operating in accord
with the PhRMA Code “sells” the product only in the way
advertisers (particularly very low key advertisers) “sell” a
product: by creating demand for the product, not by taking
orders.
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 custom-
ers of [their] own employer but of [their] employer’s cus-
tomer.” 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 sales-
men.” Ibid.
Like the “sales promotion men,” the detailers before us
deal with individuals, namely doctors, “who are not cus-
tomers” 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 promo-
tion 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
8 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
“the test is whether the person is actually engaged
in activities directed toward the consummation of his
own sales, at least to the extent of obtaining a com-
mitment to buy from the person to whom he is selling.
If his efforts are directed toward stimulating the sales
of his company generally rather than the consumma-
tion of his own specific sales his activities are not ex-
empt.” Id., at 83 (emphasis added).
The 1949 Report also refers to a
“company representative who visits chain stores, ar-
ranges the merchandise on shelves, replenishes stock
. . . , consults with the manager as to the require-
ments of the store, fills out a requisition for the quan-
tity wanted and leaves it with the store manager
to be transmitted to the central warehouse of the
chain-store company which later ships the quantity re-
quested.” Id., at 84.
It says this company representative is not an “outside
salesman” because he
“does not consummate the sale nor direct his efforts
toward the consummation of a sale (the store manager
often has no authority to buy).” Ibid.
See also 29 CFR §541.503(c) (explaining that if an em-
ployee “does not consummate the sale nor direct efforts to-
ward 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 con-
summation 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.”
Taken together, the statute, regulations, ethical codes,
Cite as: 567 U. S. ____ (2012) 9
BREYER, J., dissenting
and Labor Department Reports indicate that the drug
detailers do not promote their “own sales,” but rather
“sales made, or to be made, by someone else.” Therefore,
detailers are not “outside salesmen.”
III
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 commod-
ity.” Ante, at 19. Given the fact that the doctor buys noth-
ing, 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 im-
portance, 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 commit-
ment from a physician to prescribe one of respondent’s
drugs is the most that petitioners were able to do to en-
sure the eventual disposition of the products that respond-
ent sells.” Ante, at 20. 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 21, 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
10 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
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 detail-
ers 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 23, or “a car sales-
man 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 exam-
ples 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. Ante, at 5–
6. The problem for the detailers, however, is that the
statute seeks to achieve its general objectives by creating
certain categories of exempt employees, one of which is the
category of “outside salesman.” It places into that category
only those who satisfy the definition of “outside sales-
man” as “defined and delimited from time to time by regu-
lations of the Secretary.”
29 U.S. C. §213(a)(1) (emphasis
Cite as: 567 U. S. ____ (2012) 11
BREYER, J., dissenting
added). And the detailers do not fall within that category
as defined by those regulations.
For these reasons, with respect, I dissent.
12 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
Appendix to opinion of BREYER, J.
APPENDIX
1. 29 CFR §541.500 (2011) provides:
“General rule for outside sales employees.
“(a) The term ‘employee employed in the capacity of
outside salesman’ in section 13(a)(1) of the Act shall
mean any employee:
“(1)Whose 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 for which a consideration
will be paid by the client or customer; and
“(2) Who is customarily and regularly engaged
away from the employer’s place or places of busi-
ness in performing such primary duty.
“(b) The term ‘primary duty’ is defined at §541.700. In
determining the primary duty of an outside sales
employee, work performed incidental to and in con-
junction with the employee’s own outside sales or
solicitations, including incidental deliveries and col-
lections, shall be regarded as exempt outside sales
work. Other work that furthers the employee’s sales
efforts also shall be regarded as exempt work includ-
ing, for example, writing sales reports, updating or
revising the employee’s sales or display catalogue,
planning itineraries and attending sales conferences.
“(c) The requirements of subpart G (salary require-
ments) of this part do not apply to the outside sales
employees described in this section.”
2. 29 CFR §541.501 (2011) provides:
“Making sales or obtaining orders.
“(a) Section 541.500 requires that the employee be en-
gaged in:
“(1) Making sales within the meaning of section
Cite as: 567 U. S. ____ (2012) 13
BREYER, J., dissenting
Appendix to opinion of BREYER, J.
3(k) of the Act, or
“(2) Obtaining orders or contracts for services or for
the use of facilities.
“(b) Sales within the meaning of section 3(k) of the Act
include the transfer of title to tangible property, and
in certain cases, of tangible and valuable evidences
of intangible property. Section 3(k) of the Act states
that ‘sale’ or ‘sell’ includes any sale, exchange, con-
tract to sell, consignment for sale, shipment for sale,
or other disposition.
“(c) Exempt outside sales work includes not only the
sales of commodities, but also ‘obtaining orders or con-
tracts for services or for the use of facilities for which
a consideration will be paid by the client or customer.’
Obtaining orders for ‘the use of facilities’ includes the
selling of time on radio or television, the solicitation
of advertising for newspapers and other periodicals,
and the solicitation of freight for railroads and other
transportation agencies.
“(d) The word ‘services’ extends the outside sales ex-
emption to employees who sell or take orders for a
service, which may be performed for the customer by
someone other than the person taking the order.”
3. 29 CFR §541.503 (2011) provides:
“Promotion work.
“(a) Promotion work is one type of activity often per-
formed by persons who make sales, which may or may
not be exempt outside sales work, depending upon the
circumstances under which it is performed. Promo-
tional work that is actually performed incidental to
and in conjunction with an employee’s own outside
sales or solicitations is exempt work. On the other
hand, promotional work that is incidental to sales
made, or to be made, by someone else is not exempt
14 CHRISTOPHER v. SMITHKLINE BEECHAM CORP.
BREYER, J., dissenting
Appendix to opinion of BREYER, J.
outside sales work. An employee who does not satisfy
the requirements of this subpart may still qualify as
an exempt employee under other subparts of this rule.
“(b) A manufacturer’s representative, for example,
may perform various types of promotional activities
such as putting up displays and posters, removing
damaged or spoiled stock from the merchant’s shelves
or rearranging the merchandise. Such an employee
can be considered an exempt outside sales employee
if the employee’s primary duty is making sales or
contracts. Promotion activities directed toward con-
summation of the employee’s own sales are exempt.
Promotional activities designed to stimulate sales that
will be made by someone else are not exempt outside
sales work.
“(c) Another example is a company representative who
visits chain stores, arranges the merchandise on
shelves, replenishes stock by replacing old with new
merchandise, sets up displays and consults with the
store manager when inventory runs low, but does not
obtain a commitment for additional purchases. The
arrangement of merchandise on the shelves or the re-
plenishing of stock is not exempt work unless it is in-
cidental to and in conjunction with the employee's
own outside sales. Because the employee in this in-
stance does not consummate the sale nor direct efforts
toward the consummation of a sale, the work is not
exempt outside sales work.”