Novartis Reaches $152 Million Dollar Settlement in Gender Bias Law Suit Filed in New York Federal Court

On May 19, 2010, after nearly a six week trial, a New York jury awarded a record $250 million in punitive damages, the largest of its kind in a sexual discrimination case, to a class of female sales employees in the U.S. District Court for the Southern District of New York. Last week, the parties reached a settlement agreement of the plaintiffs’ sexual discrimination claims in the sum of $152 million.

All of the plaintiffs were current or former Novartis Pharmaceuticals Corporation (“Novartis”) female sales representatives, who alleged gender discrimination against Novartis in the terms and conditions of their employment, including compensation, promotion/promotional opportunities, reviews, and pregnancy leave.
The 97 page settlement agreement must still be approved by the court and could potentially cover thousands of female Novartis employees. Another $22.5 million was proposed for anti-discrimination policies, programs and training. Within nine months of the effective date
of the settlement agreement, Novartis will have to increase its Human Resource and Employment Relations staff–ensuring that there is one Employment Relations Investigator for every 1,000 Novartis employees. A Compliance Master will be appointed by the New York federal court to monitor Novartis’s compliance with the settlement agreement’s terms and conditions.
Plaintiffs’ attorneys are seeking attorneys’ fees of up to $38,125,000 and expenses in the amount of $2,000,000. Novartis’s counsel has agreed not to object to such motion for fees and expenses. The Jury awarded compensatory damages to named individual class members and testifying witnesses in a range from $175,000 to $425,000. Such damages, however, are subject to Title VII’s $300,000 statutory cap.

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