Second Circuit Off-Label Marketing Decision May Herald More Protection to Pharmaceutical Employers Facing Whistleblower Claims
Time 2 Minute Read

The Second Circuit this week overturned the conviction of a pharmaceutical sales representative for conspiracy to engage in “off-label” marketing in violation of the Food, Drug & Cosmetic Act (the “Act”) in a decision that has implications for “whistleblower” cases brought against pharmaceutical employers by their employees.  In United States v. Caronia, No. 09-5006-cr, 2012 WL 5992141 (2d Cir. Dec. 2, 2012), a divided panel held that the Act could not be interpreted to criminalize truthful “off-label” marketing because such a reading would render the Act an unconstitutional violation of the drug manufacturer’s First Amendment rights.  “Off-label” marketing occurs when a drug or device is approved for one purpose but is marketed for other, non-approved purposes.

In recent years, manufacturers of medical and pharmaceutical products have increasingly had to defend against wrongful discharge claims and “whistleblower” suits by employee sales representatives who opposed or refused to engage in the illegal off-label marketing of drugs or devices.  In Caronia, however, the Second Circuit eliminated the underlying basis of those suits by decriminalizing the conduct that the employee might have opposed as unlawful.  As a result, pharmaceutical employers now have the defense that their conduct was constitutionally protected speech. 

It is widely expected that the government will ask the Second Circuit to reconsider its decision in Caronia en banc.  Should the Second Circuit decline, the government will have no choice but to seek review from a Supreme Court that has shown itself to espouse a broadly pro-speech, anti-regulation First Amendment philosophy such that the Caronia decision is likely to stand.

For more information on the decision, please see our Client Alert.

You May Also Be Interested In

Time 2 Minute Read

On June 30, 2017, Missouri Governor Eric Greitens signed a bill into law, Senate Bill 43 (SB 43), that makes substantial changes to Missouri’s employment discrimination laws. The Bill, which goes into effect on August 28, amends the Missouri Human Rights Act (MHRA) and creates the “Whistle Blower Protection Act.”

Numerous changes have been made to the MHRA, so the Bill is worth a read.  A few key changes that are likely of particular interest to employers relate to who may be liable for violations, the level of proof required to establish a violation, and the amount of damages that may be awarded.

Time 1 Minute Read

On April 1, 2015, the US Securities and Exchange Commission brought its first enforcement action against a company for asking employees to agree to confidentiality terms during internal investigations.

Continue Reading

Time 4 Minute Read

Unpaid interns have increasingly become a hot topic among lawmakers and courts.  Last week, New York Governor Andrew Cuomo signed into law legislation which prohibits New York State employers from discriminating against, or sexually harassing, unpaid interns.  New York State enacted this legislation only a few months after New York City passed a law which prohibits discrimination against unpaid interns.  New York City unanimously enacted its legislation in response to a district court ruling in October 2013, which found that an intern could not proceed with a sexual harassment claim because she was unpaid, and therefore, she was not entitled to protections under Title VII or the New York City Human Rights Law.  (Wang v. Phoenix Satellite Television US, Inc., 976 F. Supp. 2d 527 (S.D.N.Y. 2013)).  Although few jurisdictions currently offer unpaid interns protection from discrimination or sexual harassment (only New York, Oregon and Washington, D.C.), legislators in New Jersey and California have introduced bills which would grant unpaid interns these same protections.  The California bill has already passed the State Assembly and is being reviewed by the State Senate.

Time 3 Minute Read

On Tuesday, the United States Supreme Court held that the whistleblower protections that apply to employees of publicly traded companies under Section 1514A of the Sarbanes-Oxley Act, also  extend to employees of private contractors and subcontractors that serve those public companies.

Search

Subscribe Arrow

Recent Posts

Categories

Tags

Authors

Archives

Jump to Page