Court OKs $175 Million Settlement of Novartis Sex Bias Claims

A federal district court in New York Nov. 19 gave final approval to a $175 million settlement of a sex discrimination class action against Novartis Pharmaceuticals Corp., benefiting a class of more than 6,000 female current and former sales representatives who alleged systemic discrimination in pay, promotions, and other working conditions (Velez v. Novartis Pharm. Corp., S.D.N.Y., No. 04-9194, final approval of settlement 11/19/10).

Following a fairness hearing at which no objections were raised to the proposed settlement, Judge Colleen McMahon of the U.S. District Court for the Southern District of New York granted final approval to a pact including $152.5 million in back wages, benefits, and adjusted wages, service payments to named plaintiffs who helped litigate the case, and attorneys' fees and costs, plus $22.5 million in nonmonetary relief representing Novartis's commitments to revise its employment policies to eliminate sex discrimination. The court had given preliminary approval to the settlement in July (61 BTM 227, 7/20/10).

Novartis and the plaintiffs' class settled the case following a jury verdict against the company under Title VII of the 1964 Civil Rights Act (61 BTM 162, 5/25/10) and jury awards of $3.4 million in compensatory damages and $250 million in punitive damages.

At the Nov. 19 fairness hearing, the court certified a settlement class of 6,026 female sales employees who worked at Novartis at any point from July 15, 2002, through July 14, 2010, the date the court gave its preliminary approval.

“This is an excellent monetary agreement for female sales representatives of Novartis,” plaintiffs' attorney David Sanford of Sanford Wittels & Heisler in Washington, D.C., said in a written statement preceding the hearing.

In a Nov. 19 statement, Novartis said that in accord with the settlement and “consistent with its philosophy to foster a diverse and inclusive workforce,” the company is “implementing comprehensive programs designed to ensure fair treatment” of all its employees.

Suit Alleged Male-Dominated Company

Filed in 2004, the Title VII suit alleged that Novartis was a male-dominated company that denied advancement to female sales representatives and was unresponsive to their complaints about unfair treatment. The plaintiffs alleged systemic sex discrimination in pay, promotions, and pregnancy leave policies.

Some plaintiffs also alleged sexual harassment, testifying that Novartis expected female sales representatives to accept sexual advances from doctors on whom they called and that the company disregarded female employees' complaints about doctors' sexually inappropriate conduct.

By Kevin P. McGowan


Text of the settlement can be accessed at http://op.bna.com/dlrcases.nsf/r?Open=jcwl-87dm4f.