Novartis settles gender bias suit for $152 million

Novartis Pharmaceuticals Corp. has settled the remainder of gender bias claims brought by women field representatives who claimed they were discriminated against in pay, promotion and in pregnancy policies. The company and lawyers for plaintiffs, led by David Sanford of Sanford, Wittels & Heisler, announced the company will pay upwards of $152.5 million to potentially thousands of female employees who are current or former sales representatives from 2002 to 2007. About $60 million of the settlement will cover back pay.

The agreement, which still must be approved by a federal judge in Manhattan, also calls for an additional $22.5 million to be paid for company programs to eliminate discrimination.

The stage was set for the settlement on May 17, when a jury before Southern District of New York Judge Colleen McMahon found for the plaintiffs and awarded 17 name plaintiffs and nine testifying witnesses compensatory damages of $3.4 million. That amount will come out of the settlement announced Wednesday.

On May 19, the jury awarded $250 million in punitive damages, the largest-ever award in a gender bias case. The settlement replaces the punitive damages, which could have been appealed.

Under the agreement, Novartis, a U.S. subsidiary of Novartis AG, also committed to take measures to ensure employees are treated equally.

"While we believe that there was not systemic discrimination at NPC, the trial revealed that some of our associates had experiences influenced by managerial behavior inconsistent with our values," said Joe Jiminez, CEO of Novartis.

Sanford said in a statement that the settlement was "momentous."

(Published by Law.com – July 15, 2010)