Source: https://supreme.justia.com/cases/federal/us/567/142/
Timestamp: 2019-04-19 15:18:15+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 567 › Christopher v. SmithKline Beecham Corp.
(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 12–13. The DOL’s current interpretation of 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 interpretation is advanced in a legal brief, see, id., at 461–462, 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 agency’s fair and considered judgment on the matter,” id., at 462. There are strong reasons for withholding Auer deference in this case. Petitioners invoke the DOL’s interpretation to impose potentially massive 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 –171. 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 detailers 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 . Pp. 8–14.
(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 employee’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 employee 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 , n. 3. Second, the list of transactions included in the statutory definition is modified by “any,” which, in the context of §203(k), is best read to mean “ ‘one or some indiscriminately of whatever kind,’ ” United States v. Gonzales, 520 U. S. 1 . Third, the definition includes the broad catchall phrase “other disposition.” 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 narrower 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 respondent’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 salaries well above the minimum wage and perform a kind of work that is 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.
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 employer’s place or places of business in performing such primary 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, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.
Finally, the promotion-work regulation identifies “[p]romotion work” as “one type of activity often performed by persons who make sales, which may or may not be exempt outside sales work, depending upon the circumstances under which it is performed.” §541.503(a). Promotion 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 someone 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 regulations. See Dept. of Labor, Wage and Hour Division, Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition (1940) (hereinafter 1940 Report); Dept. of Labor, Wage and Hour Division, Report and Recommendations on Proposed Revisions of Regulations, Part 541 (1949) (hereinafter 1949 Report); 69 Fed. Reg. 22160–22163 (hereinafter Preamble). Although the DOL has rejected proposals to eliminate or dilute the requirement that outside salesmen make their own sales, the Department has stressed that this requirement is met whenever an employee “in some sense make[s] a sale.” 1940 Report 46; see also Preamble 22162 (reiterating that the exemption applies only to an employee who “in some sense, has made sales”). And the DOL has made it clear that “[e]xempt status should not depend” on technicalities, such as “whether it is the sales employee or the customer who types the order into a computer system and hits the return button,” Preamble 22163, or whether “the order is filled by [a] jobber rather than directly by [the employee’s] own employer,” 1949 Report 83.
Respondent SmithKline Beecham Corporation is in the business of developing, manufacturing, and selling prescription drugs. The prescription drug industry is subject to extensive federal regulation, including the now-familiar requirement that prescription drugs be dispensed only upon a physician’s prescription. [ 4 ] In light of this requirement, 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 promote 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 prescriptions for the products in appropriate cases. See Sorrell v. IMS Health Inc., 564 U. S. ___, ___ (2011) (slip op., at 1–2) (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 commitment [ 6 ] from the physician to prescribe those drugs in appropriate cases, and the training that petitioners received underscored the importance of that objective.
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 ] Petitioners’ 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 employment; Buchanan’s exceeded 25 percent. It is undisputed that respondent did not pay petitioners time-and-a-half wages when they worked in excess of 40 hours per week.
Petitioners brought this action in the United States District Court for the District of Arizona under 29 U. S. C. §216(b). Petitioners alleged that respondent violated the FLSA by failing to compensate them for overtime, and they sought both backpay and liquidated damages as relief. Respondent moved for summary judgment, arguing that petitioners were “employed . . . in the capacity of outside salesman,” §213(a)(1), and therefore were exempt from the FLSA’s overtime compensation requirement. [ 9 ] The District Court agreed and granted summary judgment to respondent. See App. to Pet. for Cert. 37a–47a.
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. 48a–52a.
The Court of Appeals for the Ninth Circuit affirmed. See 635 F. 3d 383. The Court of Appeals agreed that the DOL’s interpretation [ 10 ] was not entitled to controlling deference. See id., at 393–395. 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 within the meaning of the regulations. See id., at 395–397. 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 395–396 (emphasis deleted), and had “acquiesce[d] in the sales practices of the drug industry for over seventy years,” id., at 399.
In this case, there are strong reasons for withholding the deference that Auer generally requires. Petitioners invoke the DOL’s interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation was announced. To defer to the agency’s interpretation in this circumstance would seriously undermine the principle that agencies should provide regulated parties “fair warning of the conduct [a regulation] prohibits or requires.” Gates & Fox Co. v. Occupational Safety and Health Review Comm’n, 790 F. 2d 154, 156 (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 –171 (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 regulated 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-faith reliance on [agency] pronouncements” or in a case involving “fines or damages”).
Even more important, despite the industry’s decades-long practice of classifying pharmaceutical detailers as exempt employees, the DOL never initiated any enforcement actions with respect to detailers or otherwise suggested that it thought the industry was acting unlawfully. [ 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 to enforce often involves a complicated balancing of a number of factors which are peculiarly within its expertise”). 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 Department did not think the industry’s practice was un- lawful. Yi v. Sterling Collision Centers, Inc., 480 F. 3d 505, 510–511 (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 quintessential 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 important 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 purposes of rulemaking.” Talk America, Inc. v. Michigan Bell Telephone Co., 564 U. S. ___, ___ (2011) (Scalia, J., concurring) (slip op., at 3); see also Stephenson & Pogoriler, Seminole Rock’s Domain, 79 Geo. Wash. L. Rev. 1449, 1461–1462 (2011); Manning, Constitutional Structure and Judicial Deference to Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612, 655–668 (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 demands deference.
We find the DOL’s interpretation of its regulations quite unpersuasive. The interpretation to which we are now asked to defer—that a sale demands a transfer of title—plainly lacks the hallmarks of thorough consideration. Because the DOL first announced its view that pharmaceutical sales representatives do not qualify as outside salesmen in a series of amicus briefs, there was no opportunity for public comment, and the interpretation that initially emerged from the Department’s internal decisionmaking process proved to be untenable. After arguing successfully in the Second Circuit and then unsucess- fully in the Ninth Circuit that a sale for present purposes simply requires a “consummated transaction,” the DOL advanced a different interpretation in this Court. Here, the DOL’s brief states unequivocally that “[a]n employee does not make a ‘sale’ for purposes of the ‘outside salesman’ exemption unless he actually transfers title to the property at issue.” U. S. Brief 12–13.
We begin with the text of the FLSA. Although the provision that establishes the overtime salesman exemption does not furnish a clear answer to the question before us, it provides at least one interpretive clue: It exempts anyone “employed . . . in the capacity of [an] outside salesman.” 29 U. S. C. §213(a)(1) (emphasis added). “Capacity,” used in this sense, means “[o]utward condition or circumstances; relation; character; position.” Webster’s New International Dictionary 396 (2d ed. 1934); see also 2 Oxford English Dictionary 89 (def. 9) (1933) (“Position, condition, character, relation”). The statute’s emphasis on the “capacity” of the employee counsels in favor of a functional, rather than a formal, inquiry, one that views an employee’s responsibilities in the context of the particular industry in which the employee works.
The DOL’s regulations provide additional guidance. The general regulation defines an outside salesman as an employee whose primary duty is “making sales,” and it adopts the statutory definition of “sale.” 29 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 examples enumerated in the text are intended to be illustrative, not exhaustive. See Burgess v. United States, 553 U. S. 124 , 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 provisions of the FLSA when it wanted to cabin a definition to a specific list of enumerated items. See, e.g., 29 U. S. C. §203(a) (“ ‘Person’ means an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons” (emphasis added)).
The specific list of transactions that precedes the phrase “other disposition” seems to us to represent an attempt to accommodate industry-by-industry variations in methods of selling commodities. Consequently, we think that the catchall phrase “other disposition” is most reasonably interpreted as including those arrangements that are tantamount, in a particular industry, to a paradigmatic sale of a commodity.
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 respondent 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 pharmacy with a prescription from the physician.
Our holding also comports with the apparent purpose of the FLSA’s exemption for outside salesmen. The exemption is premised on the belief that exempt employees “typically earned salaries well above the minimum wage” and enjoyed other benefits that “se[t] them apart from the nonexempt workers entitled to overtime pay.” Preamble 22124. It was also thought that exempt employees performed a kind of work that “was difficult to standardize to any time frame and could not be easily spread to other workers after 40 hours in a week, making compliance with the overtime provisions difficult and generally precluding the potential job expansion intended by the FLSA’s time-and-a-half overtime premium.” Ibid. Petitioners—each of whom earned an average of more than $70,000 per year and spent between 10 and 20 hours outside normal business hours each week performing work related to his assigned portfolio of drugs in his assigned sales territory—are hardly the kind of employees that the FLSA was intended to protect. And it would be challenging, to say the least, for pharmaceutical companies to compensate detailers for overtime going forward without significantly changing the nature of that position. See, e.g., Brief for PhRMA as Amicus Curiae 14–20 (explaining that “key aspects of [detailers’] jobs as they are currently structured are fundamentally incompatible with treating [detailers] as hourly employees”).
The remaining arguments advanced by petitioners and the dissent are unavailing. Petitioners contend that detailers are more naturally classified as nonexempt promotional employees who merely stimulate sales made by others than as exempt outside salesmen. They point out that respondent’s prescription drugs are not actually sold until distributors and retail pharmacies order the drugs from other employees. See Reply Brief for Petitioners 7. Those employees, [ 24 ] they reason, are the true salesmen in 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 nonexempt promotional employee a manufacturer’s representative 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 statutory 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 “technological 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 47–48. Two of these opinions, however, concerned employees who were more analogous to buyers than to sellers. See Clements v. Serco, Inc., 530 F. 3d 1224, 1229–1230, n. 4 (CA10 2008) (explaining that, although military recruiters “[i]n a loose sense” were “selling the Army’s services,” it was the Army that would “pa[y] for the services of the recruits who enlist”); Opinion Letter from Dept. of Labor, Wage and Hour Division (Aug. 19, 1994), 1994 WL 1004855 (explaining that selling the “concept” of organ donation “is similar to that of outside buyers who in a very loose sense are sometimes described as selling their employer’s ‘service’ to the person for whom they obtain their goods”). And the other two opinions are likewise inapposite. One concerned employees who were not selling a good or service at all, see Opinion Letter from Dept. of Labor, Wage and Hour Division (May 22, 2006), 2006 WL 1698305 (concluding that employees who solicit charitable contributions are not exempt), and the other concerned employees who were incapable of selling any good or service because their employer had yet to extend an offer, see Opinion Letter from Dept. of Labor, Wage and Hour Division (Apr. 20, 1999), 1999 WL 1002391 (concluding that college recruiters are not exempt because they merely induce qualified customers to apply to the college, and the college “in turn decides whether to make a contractual offer of its educational services to the applicant”).
1 This provision also exempts workers “employed in a bona fide executive, administrative, or professional capacity.” .
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 Amendment of 1951, ch. 578, –649 (codified at ). 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 Compulsory 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.
14 Neither petitioners nor the DOL asks us to accord controlling deference to the “consummated transaction” interpretation the Department advanced in its briefs in the Second Circuit and Ninth Circuit, nor could we given that the Department has now abandoned that interpretation. See Estate of Cowart v. Nicklos Drilling Co., (noting that “it would be quite inappropriate to defer to an interpretation which has been abandoned by the policymaking agency itself ”).
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, (noting that “[w]hen a statute includes an explicit definition, we must follow that definition” (internal quotation marks omitted)).
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., . Petitioners and the DOL contend that Arnold requires us to construe the outside salesman exemption narrowly, but Arnold is inapposite where, as here, we are interpreting a general definition that applies throughout the FLSA.
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.
There are three relevant regulations. The first is entitled “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 “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).
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-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 interfere with the independence of a healthcare professional’s prescribing practices.” Id., at 13. But the PhRMA Code nowhere refers to detailers as if they were salesmen, rather than providers of information, nor does it refer to any kind of commitment.
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 customer.” Ibid. And they are “primarily interested in sales by the retailer, not to the retailer.” Ibid. “[T]hey do not make actual sales,” and they “are admittedly not outside salesmen.” Ibid.
“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 commitment 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 consummation of his own specific sales his activities are not exempt.” Id., at 83 (emphasis added).
“company representative who visits chain stores, arranges the merchandise on shelves, replenishes stock . . . , consults with the manager as to the requirements of the store, fills out a requisition for the quantity 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.
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 regulations of the Secretary.” 29 U. S. C. §213(a)(1) (emphasis added). And the detailers do not fall within that category as defined by those regulations.
“(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 conjunction with the employee’s own outside sales or solicitations, including incidental deliveries and collections, shall be regarded as exempt outside sales work. Other work that furthers the employee’s sales efforts also shall be regarded as exempt work including, for example, writing sales reports, updating or revising the employee’s sales or display catalogue, planning itineraries and attending sales conferences.
“(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, contract 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 contracts 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.
“(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 consummation 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.

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