NEW YORK, May 19 (Reuters) – Drugmaker Novartis AG must pay $250 million in punitive damages for discriminating against thousands of female sales representatives over pay, promotion and pregnancy, a U.S. jury ruled on Wednesday.
Lawyers for about 5,600 current and former women employees covered by the 2004 class action lawsuit said it was the largest gender discrimination case in the United States.
The decision was announced in Manhattan federal court by a jury of five women and four men who earlier ruled that the company’s U.S. division, Novartis Pharmaceuticals Corp, had engaged in a pattern of discrimination against women who worked for the company between 2002 and 2007.
The $250 million in punitive damages is 2.6 percent of the company’s $9.5 billion 2009 revenue. The women had sought between $190 million and $285 million.
The verdict had sent a message to Novartis and other companies that “they cannot continue to get away with the discrimination and systemic problems that have occurred for so long,” David Sanford, a lawyer for the women, told reporters at the courthouse.
In the first part of their ruling on Monday after a six week-long trial, the jury also awarded $3.3 million in compensatory damages to 12 of the women who testified.
The award to the 12 opens the door for 5,588 others who can also apply for compensatory damages. The damages will likely be determined on an individual basis by a court-appointed special master, said Katherine Kimpel, a lawyer for the plaintiffs.
Presiding Judge Colleen McMahon will determine a lump sum for back pay, lost benefits and adjusted wages that will be distributed to plaintiffs, lawyers said. They said they are seeking $37 million to cover back pay.
“We are disappointed in the jury’s verdict,” Andy Wyss, president of the division, said in a statement.
He said the company had policies aimed at bolstering “diversity and inclusion for the development of our employees.”
“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,” he said.
Novartis lawyer Richard Schnadig told the jury that not all of the plaintiffs agreed with the lawsuit and the company was already pushing ahead with changes.
In court papers, women said complaints made to the company’s human resources division were routinely ignored, and pregnancies were often the source of discrimination.
Plaintiff Marjorie Salame, to whom the jury allotted $540,500, 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 had happened.
Another plaintiff, characterized by lawyers as a high-performing employee, was threatened by her manager that she would be fired if she took another sick day due to morning sickness during pregnancy. After she gave birth and before taking a paid maternity leave, she was fired.
“She was pregnant … Novartis was done with her,” Sanford said in his summations.
The case is Velez et al v Novartis Corporation, U.S. District Court for the Southern District of New York, No. 04-09194. (Reporting by Basil Katz and Grant McCool, editing by Gerald E. McCormick and Robert MacMillan)
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