Novartis Gender Discrimination Class Action

Case name: Amy Velez, et al. v. Novartis Pharmaceuticals Corp.

Filed in: [U.S. District Court for the Southern District of New York]

Docket: [Case No.: 04 Civ. 09194 (CM)]

Case Summary

In 2010, in what was the largest gender discrimination case ever to go to trial, Sanford Heisler Sharp McKnight successfully represented a class of 5,600 female sales representatives of Novartis Pharmaceutical Company in their gender pay and promotion and pregnancy discrimination claims brought under the Civil Rights Act of 1964, Title VII, and state law.

After a nearly seven-week trial, the jury by unanimous decision awarded 12 former Novartis sales reps $3.36 million in compensatory damages and the class of 5,600 women an additional $250 million in punitive damages. In addition, the verdict meant that the class of 5,600 women were entitled to additional awards of back pay and to seek compensatory damage awards up to $300,000 each. The verdict—and the resulting monetary awards—was the largest-ever in the U.S in an employment discrimination case.

Novartis was created in 1996 through a merger of Ciba-Geigy and Sandoz pharmaceutical companies. Headquartered in Basel, Switzerland, the company had sales of $44.3 billion in 2009.

Testimony during trial pointed to systemic discrimination against female employees in their pay, in promotions to management and in the ways in which pregnant women and young mothers were treated. Notably, plaintiffs secured key admissions from the company’s witnesses about the extent of the problems at Novartis – including admissions from the former head of human resources that the company did not have a centralized system to track discrimination complaints; from the current head of HR that Novartis did not actually enforce its “zero tolerance” policy; and from the founder of the “Women’s Network” that Novartis had too few women in management.

After weeks of negotiations, the parties in July 2010 announced they had reached the terms of a preliminary settlement and had negotiated the deal to extend to cover all female sales reps through July 2010, increasing the class size to approximately 6,200 women in total.

On November 30, 2010, the U.S. District Court of the Southern District of New York approved the final settlement agreement, valued at $175 million.

The $22.5 million earmarked for broad-reaching systemic reforms is believed to be among the largest non-monetary settlements ever reached.