Novartis found guilty of sex discrimination

Ruled against: Novartis chairman Daniel Vasella gestures during a meeting in Basel. The company was found guilty in the US of sexual discrimination Keystone

A jury in New York has ruled that a United States division of the Swiss pharmaceuticals firm Novartis discriminated against women workers.

At the end of a six-week trial on Monday it awarded compensatory damages of $3.3 million (SFr3.74 million) to 12 women, and punitive damages to a larger group.

The class action lawsuit – representing 5,600 women – alleged that the women were discriminated against in the areas of pay, promotions, and pregnancy-related matters.

They are seeking up to $200 million in damages, including back pay, lost benefits and adjusted wages.

During the trial, the jury heard testimony from 12 women representing the larger group, who are both current and previous employees of Novartis Pharmaceuticals Corporation, a US affiliate of the Novartis group.
The jury decided that punitive damages should be awarded to the group and will hear arguments to determine the amount of those damages on Tuesday.

In separate proceedings, each member of the class action will have the ability to bring forth evidence of their personal situations to determine compensatory damages– a magistrate judge will hear that evidence in the coming months, according to the law firm representing the women, Sanford Wittels & Heisler.

Novartis to appeal

After the verdict Novartis expressed disappointment with the jury’s verdict, adding that it planned to appeal against the decision.

“Throughout our history and, in particular, in the timeframe of this lawsuit, Novartis Pharmaceutical Corporation has developed and implemented policies setting the highest standards with regards to diversity and inclusion for the development of our employees,” a Novartis spokeswoman said in a statement.

The women, mostly in sales positions throughout the US, were seeking total damages of $200 million, including back pay, lost benefits and adjusted wages.

A lawyer for the plaintiffs, David Sanford, said the verdict sent a clear and power message to Novartis that “women are equal partners in our workforce” adding that the company “deserves to be punished for the way it has mistreated working women in this country”.

“There are equal employment opportunity laws in this country designed to protect people. They may not be the same laws as in Switzerland but… companies have to abide,” Sanford told swissinfo.ch.

“Sexual advances”

Kate Kimpel, another attorney for the plaintiffs, said: “The jury learned that Novartis is not somewhere you would want your wife, your mother, your sister or your daughter to work.”

She said Novartis had a corporate culture that expected female sales reps to be “available and amenable to sexual advances” from the doctors they met while marketing drugs. “To add insult to injury, Novartis paid those same women less, wouldn’t promote them into management, and punished them if they got pregnant.”

During the trial, the jury heard testimony about a district manager who showed female workers pornographic images and invited them to sit on his lap.

During opening statements, Novartis attorney Richard Schnadig said the company might have been slow in investigating the claims against the manager, who was fired two years after the lawsuit was filed in 2004.

“He was an embarrassment to the company,” Schnadig said. “He wasn’t that bad a manager. He was just terrible with women.”

Karin Kamp in New York, swissinfo.ch

The lawsuit

The case was the largest gender discrimination matter ever to go to trial in the US, according to the law firm representing the women.

The suit was originally filed in 2004 and includes female sales representatives who worked for Novartis Pharmaceutical in the US between 2002 and 2007.

In a 2007 ruling a federal judge in New York granted class-action status to the case. While the judge ruled the suit against Novartis Pharmaceuticals could proceed, they dismissed the plaintiffs’ claims against Novartis Corporation.

One of the witnesses, Marjorie Salome, to whom the jury allotted $540,000, testified that after she reported being raped by a doctor during a company outing, managers started questioning her work performance and one supervisor blamed her for what happened.

In court papers, other women said complaints made to the company’s human resources division were routinely ignored and pregnancies were often the source of discrimination.

A lawyer for the plaintiffs, Steven Wittels, praised the verdict, saying “this jury had sent a message to Novartis. Get your house in order! Change your culture: the ‘old boys’ network’ will not be tolerated.”

Novartis lawyer Richard Schnadig said in his summing up of the case on May 10 “this case, at bottom, is meritless: has no merit whatsoever, statistically or anecdotally”.