Jury awards $250M to women in drug maker gender discrimination case

By BRUCE GOLDING
Last Updated: 1:19 PM, May 19, 2010
Posted: 11:02 AM, May 19, 2010

Now that's a bitter pill!

Drug maker Novartis was ordered this morning to pay a record $250 million in punitive damages for under-paying its female sales reps, denying them promotions and mistreating them when they got pregnant.

The Manhattan federal jury award -- nearly 3 percent of the company's $9.5 billion net income last year -- is the largest-ever in a gender-discrimination case, winning lawyer David Sanford said.

"The jury has spoken and has sent a message to Novartis and all other corporations in America that they cannot continue to get away with the discrimination and the systemic problems that have gone on for so long," Sanford said.

The staggering sum will be split among up to 5,600 women who worked for the pharmaceutical giant between 2002 and 2007 and are eligible to join in the class-action victory.

The drug-maker -- which sells such popular remedies as Bufferin, Ex-Lax and Desenex -- could also be on the hook for hundreds of millions more in back pay and compensatory damages to be decided by the court in the coming months.

Members of the five-woman, four-man jury refused to discuss their decision, delivered shortly after they convened for a second day of deliberations on the question of how hard to punish the American arm of the Swiss-based company.

On Monday, the panel unanimously found Novartis guilty on all three counts of discrimination contained in a civil suit filed in 2004, and awarded $3.3 million in compensatory damages to 12 women who testified during the six-week trial.

In addition to more cash, the plaintiffs' lawyers will be seeking a court order requiring "sweeping changes" to Novartis' performance-appraisal procedures, human-resources operation and its policies regarding pay, promotions and employee pregnancies.

Plaintiffs' lawyer Steven Wittels said Novartis needed to address the "uncontroverted" evidence showing that women made up 50 percent of its sales force, but only 23 percent of its entry-level managers.

"The time has come. The message is: pay them equally and treat them equally," Wittels said.

Novartis lawyer Richard Schnadig, who insisted during his closing argument that the company understands "that we erred" and "is going to change," declined to comment.

A Novartis spokeswoman -- who on Monday vowed an appeal of the jury's discrimination verdict -- didn't immediately respond to a request for comment.

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