Novartis has been ordered to pay punitive damages of $250 million to some 5,600 current and former female employees by a US judge after the Swiss major was found to have been discriminating against women.
After delivering a unanimous verdict against Novartis on all counts and awarding 12 former Novartis sales representatives almost $3.7 million in compensatory damages earlier this week, a New York jury decided that the company should pay out to the entire class of about 5,600 women stemming from a lawsuit originally filed in 2004.
Judge Colleen McMahon had found the Basel-headquartered firm liable for gender discrimination in pay, promotional opportunities and pregnancy-related matters and then instructed jurors to consider the amount of punitive damages award “in light of the offensiveness of Novartis’ behaviour, the nature and extent of the harm done [and] the length of time the class endured the behaviour”.
She also told the jury to consider “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 $250 million is not the final figure, however, as Judge McMahon also will award backpay to the entire class at a later date to make up for lost earnings.
Sanford, Wittels & Heisler, the law firm representing the women, noted that “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”. It added that although several of Novartis’ witnesses claimed during the trial that the company had a ‘zero tolerance’ policy for discrimination, they each admitted that managers were never terminated or demoted, “even when complaints of discrimination were substantiated by its own HR department”.
Attorney David Sanford said that the women “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”.
Novartis responded by saying it “strongly disputes the claims of past discrimination in the sales force during the period of 2002 to 2007”.
Andy Wyss, president of Novartis Pharmaceuticals Corp in the USA, said “we are disappointed in the jury’s verdict”, adding that for “more than ten years the company has developed and implemented policies setting high standards with regards to diversity and inclusion for the development of our employees”. The firm went on to say it has been “publicly recognised ten years in a row” by Working Mother magazine as one of the top 100 companies for the latter. The company added that it supports the field-based ‘Women in Leadership’ group, and it “invests in external programmes that support and encourage the advancement of women”.
Novartis concluded by noting that several members of the class voluntarily testified on the company’s behalf “about their positive work experiences and the corporate culture they observed to be very supportive of women.” However, “the class was certified in such a way that these members were not given the opportunity to opt-out of the lawsuit”.
