Novartis faces huge bill for US overtime

Basel-based Novartis might find the latest US lawsuit a bitter pill to swallow Keystone

Sales representatives of Swiss drugmaker Novartis in the United States have launched a $225 million (SFr296 million) lawsuit against the firm for unpaid overtime.

This content was published on March 23, 2006 - 22:37

Law firm Sanford Wittels & Heisler said Simona Lopes, a former sales representative, had filed the suit for herself and other employees of the company across the country.

The class action lawsuit alleges Novartis violated the Fair Labor Standards Act and New York State's overtime laws by failing to pay her for overtime when she worked more than 40 hours a week.

It also claims that the company's New York employees involved in product sales were misclassified by the company as exempt from federal and state overtime requirements.

"We have not been served with the suit, and so we cannot comment," John Gilardi, a spokesman for Novartis in Switzerland told Reuters.

Novartis is involved in another class action suit, launched by the same law firm in February 2005, which alleges sex discrimination by Novartis managers against current and former employees. They are seeking $100 million in damages.

State and nationwide

The latest suit was filed in the United States District Court in New York, and is seeking class action status in both New York state and nationwide, according to David Sanford, a lawyer representing Lopes.

Sanford said that Lopes was not a commissioned sales representative, so she was entitled to overtime.

Lopes was more of a marketing representative who tried to persuade doctors to prescribe Novartis drugs, Sanford added. He said Lopes did receive bonuses but that they were not specifically tied to doctors' prescription habits.

The federal case is seeking $150 million in damages, while the state case seeks $75 million.

Similar cases were expected to be filed in New Jersey and California, Sanford said.

Firms operating in the US have become targets of this type of lawsuit in recent years. Wal-Mart and Starbucks are just two sued by workers for overtime pay, and companies have paid more than $1 billion to resolve such cases since 2002.

swissinfo with agencies

In brief

Novartis was formed in 1996 through the merger of Ciba-Geigy and Sandoz.

The company's pharmaceutical division makes nearly half its sales ($9.6 billion) in the United States.

Novartis became the world's biggest producer of generic drugs last year when it bought German company Hexal with its US strategic partner Eon Labs.

The firm is also the second largest manufacturer of over-the-counter drugs in Europe.

The pharmaceutical giant plans to launch a fourth division, vaccines, if its takeover of California-based Chiron gets regulatory approval this year.

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Key facts

Novartis 2005 results:
Group net sales: $32.2 billion (+14%)
Pharmaceutical net sales: $20.3 billion (+10%)
Sandoz (generics) net sales: $4.7 billion (+54%)
Consumer Health net sales: $7.3 billion (+8%)

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