Sex Discrimination Jury Finds for Female Sales Reps In Novartis Sex Discrimination Case

NEW YORK—A federal jury May 17 found Novartis Corp. liable for sex discrimination against a nationwide class of female sales representatives, awarding some $3.4 million for emotional damages to 12 plaintiffs who testified as witnesses in the case (Velez v. Novartis Corp., S.D.N.Y., No. 04 Civ. 9194, jury verdict 5/17/10).

The jury in U.S. District Court for the Southern District of New York, after deliberating more than four days, found for the plaintiffs on claims of pay, promotion, and pregnancy discrimination. It also granted punitive damages, and will deliberate on the amount after hearing arguments May 18.

The damages awards to testifying plaintiffs—which totaled $3,367,250 and ranged between $598,500 and $50,000—were for pain and suffering and loss of enjoyment, their attorneys said. Judge Colleen McMahon, who presided over the approximately five-week trial, will rule later on claims for economic damages and nonmonetary relief, they said.

In addition, they added, members of a nationwide class of some 5,600 current and former female sales reps, who worked for the company between 2002 and 2007, will have the opportunity to opt for a hearing on damages before a special master in the case.

The trial opened April 8 with plaintiffs’ attorneys asserting that Novartis is a male-dominated company that denied advancement to female sales representatives and was unresponsive to complaints of unfair treatment (67 DLR A-13, 4/9/10). Defense attorneys denied the charges, saying Novartis has a strong equal employment opportunity program.

Largest Case to Reach Trial

In welcoming the verdict, plaintiffs’ attorneys said the case was the largest U.S. sex discrimination case to go to trial.

“We are extremely gratified that the jury has come back with the right result,” plaintiffs’ attorney David Sanford of the Washington office of the law firm Sanford Heisler LLP said outside the courtroom. “The jury listened to approximately five weeks of testimony from women across the United States who told compelling, overlapping, and powerful stories about the discrimination they experienced.

“The testimony, the documents, and the statistics all told one story: there was rampant discrimination throughout the ranks at Novartis.”

The company’s failure to respond to repeated warnings, beginning in 2002, was “central to the story,” Sanford told BNA.

The company, he said, was “put on notice that it had a deep-rooted problem”—in consultants’ reports, the class charges and complaint, and feedback from its own Women in Leadership management development program— “yet failed to take action.”

Subjectivity runs through the entire management system, Sanford charged, influencing not just performance appraisals “but every aspect of pay.” That subjectivity “gives rise to an environment that allows a predominantly male managerial force to make decisions that disfavored women,” he said.

The Novartis sales force is 50 percent female, while its managerial ranks are 75 percent male, he noted.

Seeking Policy ’Blueprint.’

The plaintiffs are seeking nonmonetary relief in the case to change human resources policies and procedures at Novartis and also to set a “blueprint” for other companies to follow, plaintiffs’ attorney Katherine Kimpel, of the same firm, told BNA.

“Not only is it important to change the working conditions for the women who still work at Novartis, but [the relief] would reinforce the steps corporate America has to take to respond to these kinds of problems,” she said.

Four major areas put under focus in the case were the company’s performance management system, compensation system, access to promotion and management, and responsiveness to evidence of wrongdoing, Kimpel said. “We certainly believe we’ve proved, and the jury has validated, that there are failings in these areas,” she said.

In a statement, Sanford said the verdict “sends a clear and powerful message to Novartis and every corporation in the United States: women are equal partners in our workforce.

The days of second-class citizenship are over. Play by the rules or be subject to great exposure, financially and reputationally.”

Sanford also called the verdict “the first step in bringing about long overdue changes at Novartis and other companies that encourage or tolerate unfair treatment of women in their workplaces.“ Corporate Culture Scored Added Kimpel: “This jury learned that Novartis is not somewhere you would want your wife, your mother, your sister, or your daughter to work.”

She asserted in the statement that the company “has a corporate culture that expects female representatives to be available and amenable to sexual advances from the doctors they call on.” She continued: “Time and time again, Novartis looked the other way when female representatives complained about inappropriate doctors. And then, to add insult to injury, Novartis paid those same women less, wouldn’t promote them into management, and punished them if they got pregnant. Novartis refused to treat its female employees as the competent and hard-working professionals that they were and are.”

A Novartis spokeswoman was unavailable for comment on the verdict.

Sanford Heisler LLP also represented the plaintiffs, along with solo practitioner Grant Morris of Washington. Novartis was represented by Richard H. Schnadig of the Chicago law firm Vedder Price.

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