Novartis to pay additional $250 million for gender discrimination inflicted on 5,600 working women

Sanford Wittels & Heisler LLPMay 20 2010

After delivering a unanimous verdict against Novartis on all counts and awarding 12 former Novartis sales reps $3.36 million in compensatory damages yesterday, a New York jury today delivered a stronger dose of the same medicine.  Announcing the amount of punitive damages to be awarded, the jury determined that Novartis must pay an additional $250 million for the gender discrimination it inflicted on 5,600 working women in the class. The case was the largest gender discrimination matter ever to go to verdict in the U.S.

Monday's sweeping verdict found Novartis liable for gender discrimination in pay, promotional opportunities and pregnancy-related matters. Today's punitive damage award is meant to punish the company for its past actions and to deter it and others from continuing to discriminate against female employees in the future.

The announcement of punitive damages came after Judge McMahon instructed jurors to consider the amount of punitive damages award in light of the offensiveness of Novartis' behavior, the nature and extent of the harm done, the length of time the class endured the behavior, the extent to which Novartis knew about the discrimination and how they reacted once they were on notice and the amount needed to deter repetition of Novartis' conduct in light of Novartis' financial condition.

The women were represented in the matter by David Sanford, Steven Wittels and Katherine Kimpel in the New York and Washington, D.C. offices of Sanford, Wittels & Heisler LLP, and Grant Morris, of Washington, D.C. 

"This is a just award, and one richly deserved by Novartis' female sales reps. The 5,600 women in the class endured egregious gender discrimination for years. All the while, the company did nothing, even after being warned time after time about the deep-seated culture of discrimination at the company," said Mr. Sanford. "What the jury did here today was the right thing—not only for the women in the class but also for working women around the country who deserve to work in an environment free of discrimination."

"The jury's decision speaks to Novartis with a force far greater than any single voice.  For the thousands of women across the country who suffered discrimination, finally the time has come that Novartis must hear and recognize the depth of its injustice," said Katherine Kimpel. "Corporations cannot violate our federal equal employment laws and get away with it. Jurors like the ones who ruled today will not stand for it. If you profit off of the American people, you have to abide by our civil rights laws."  

Although several of Novartis' witnesses claimed during the trial that the company had a "zero tolerance policy" for discrimination, those witnesses each admitted that the company's managers were never terminated or demoted, even when complaints of discrimination were substantiated by its own HR department.

Steven Wittels said of today's victory, "All of the brave women who testified have played a role in standing up to this company's discriminatory treatment of women, and we are gratified to have been able to help them in this quest.  We all hope that no female employee in Novartis or any other large corporation will ever have to endure what these women endured while trying to earn an honest living. But when corporations do discriminate, this jury's verdict proves that enforcing equal employment rights in the court works. Bad employers beware!"

Judge Colleen McMahon now has the opportunity to order Novartis to change its policies and procedures to prevent future discriminatory behavior. Judge McMahon also will award backpay to the entire class at a later date to make up for the lost earnings Novartis wrongfully denied its female employees. 

Significantly, in separate proceedings, compensatory damages also will be decided for each member of the class that opts-in, to include monetary damages for the pain and suffering caused by Novartis' discriminatory acts. 

The class includes female sales representatives who worked for the drug giant between 2002 and 2007.  Thirteen of them testified during the five-week trial in the class action originally filed in 2004 (Amy Velez et al., vs. Novartis Pharmaceuticals Corporation 04 Civ. 09194.)

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