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Independent judgment, discretion key to administrative exemption under Pa. law

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in Compensation and Benefits,Human Resources

Under the Pennsylvania Minimum Wage Act (PMWA), employees engaged in administrative work aren’t eligible to collect overtime pay.

But what about employees who spend a lot of time in the field—calling on clients or prospects, for example? They may be covered by the administrative exemption, even if they use canned sales pitches and can choose only from a few different sales strategies.

The key: They must have substantial freedom to choose which approach to use on individual clients.

Recent case: Kristin Baum worked as an AstraZeneca pharmaceutical sales specialist. She sued under the PMWA, alleging she should have received overtime for some of the 60 to 70 hours per week she worked.

Baum testified that she chose which doctors to visit and tailored her sales pitch to each one, based on prior contacts and what she knew about the physician’s prescription habits. She selected an approach from one of many approved by AstraZeneca.

The court said Baum wasn’t eligible for overtime because she met the administrative exemption under Pennsylvania law. She was directly involved in company operations. She used discretion and independent judgment to decide which doctors to see and how to best sell to them. She could schedule visits any way she wanted. She had minimal supervision. The fact that many sales calls involved “canned,” preapproved pitches didn’t matter. (Baum, et al., v. AstraZeneca, No. 09-2150, 3rd Cir., 2010)

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