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For this assignment you will practice applying the content you have learned so far this semester to understanding and analyzing a creative work.

[ANSWER] CASE 1 HARRY PHIPPS, SENIOR PROFESSIONAL SALES REPRESENTATIVE

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Case 1  Harry Phipps, Senior Professional Sales Representative

Harry Phipps was employed by K&K Pharmaceutical Company as a senior professional sales representative. Phipps’ position required him to travel across doctors’ offices and hospitals where he promoted the benefit of K & K’s drug, Provita, to the prescribing doctors, K & K used this method in the hope that when doctors realized the benefit of Provita, they would prescribe the drug for their patients.

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EXERCISE:  APPLYING THE FLSA — IS THIS JOB EXEMPT?
  1. Objectives
    1. To help you understand the application of the Fair Labor Standards Act (FLSA).
    2. To help you understand how the law is applied in determining whether jobs are exempt or non-exempt under FLSA.
  1. Procedures
  1. Read the exercise and review the Fair Labor Standards Act excerpt pertaining to exempt status (Refer to FLSA Wage and Hour Exemptions – – Listed Below).
  2. The student should read the incident that follow and answer these questions:
  1. Analyze the case in respect to the tests that must be considered for determination of exempt status of executive, professional or administrative jobs.
  2. If you were the judge, how would you rule? Is the job exempt or non-exempt? Why or why not?

Case 1  Harry Phipps, Senior Professional Sales Representative

Harry Phipps was employed by K&K Pharmaceutical Company as a senior professional sales representative. Phipps’ position required him to travel across doctors’ offices and hospitals where he promoted the benefit of K & K’s drug, Provita, to the prescribing doctors, K & K used this method in the hope that when doctors realized the benefit of Provita, they would prescribe the drug for their patients.

By law, Phipps could not sell the drug directly to doctors. The company provided Phipps with a list of target doctors, and he was expected to complete ten visits per day, and each doctor had to be visited at least once a quarter. K & K left the itinerary and method of achieving the targets up to Phipps. However, they did provide Phipps with a budget for the visits. He was also given pre-approved visual aids and had received training in basic “marketing” skills, a core message about the product, and how to gauge doctor interest in the product.

Each representative was expected to develop a plan for how to handle his

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or her territory. Phipps had to complete post-visit reports and refer back to them in planning the next visit.  Being successful in the job required some creativity since doctors were extremely busy each day and their patients. Phipps cultivated relationships with their staff and used this as a means to gain access to the doctors.

Phipps earned $66,000 annually but was not paid for overtime. He also had the use of a company car. K & K could award a bonus based on the number of actual prescriptions issued in Phipps’

Territory. After the completion of two months on the job. Phipps added up the time he spent in completing his work and found he was working more than 8 hours a day. He approached K & K and requested to be paid for overtime. The HR manager indicated that Phipps did not qualify for overtime because the job of senior professional sales representative is exempt under the Fair Labor Standards Act and that overtime is only available to non-exempt employees.

Additionally, the HR manager pointed out that although a supervisor accompanied Phipps during his doctor visits on a few days each quarter, he was unsupervised 95% of the time. Phipps did not agree with this and argued that he had little discretion in doing his job because he had to follow company guidelines and was given a list of targeted doctors. Furthermore, since he did not work at the company’s offices, he was technically an outside salesman. Phipps subsequently filed a class action suit on behalf of himself and the other senior professional sales representatives at K & K arguing that their jobs were non-exempt.

RELATED: Imagine you are part of a marketing team at a company that relies heavily on social media advertising to children ages 13 to 17.

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