Novartis Sex Discrimination Case

In a federal sex discrimination case in New York, the jury found in favor of the plaintiffs and the court ordered the defendent, the giant pharmaceutical company Novartis, to pay $3.3 million in compensation, with further claim made by the plaintiffs for punitive damages between $190 and $285 million. Various reports are available via BNet, BusinessWeek

That Novartis let this go to trial without settling out of court was surprising, though apparently they felt that the damages they might incur would not be significantly above what they would pay anyway in a settlement and there was always the chance they might win the case. The company pointed to its detailed policies on discrimination and equality and a “Women in Leadership” program. But the plaintiffs, who are sales representatives and entry level managers at the company, testified otherwise, describing the work environment as a “boy’s club” and that they were routinely denied opportunities for advancement. It was particularly hostile with regard to pregnant employees, one who testified she was advised to get an abortion. The most damning was the case of the employee who alleged that she had been raped but instead of the proper support and assistance was threatened with disciplinary action.

What struck me most from reading these accounts was neatly summarized by BNet’s headline: Too Big To Care. They demonstrate little regard for their female employees. They do not even seem overly concerned with how the whole episode makes them look, as much more detail was revealed by allowing the case to go to trial. I can’t really imagine what these women have gone through, but even an uncomfortable work environment is bad enough. On the whole, the episode seems to have been limited to the sales group in the US arm of the company, so perhaps the company claims that they are trying to be supportive are legitimate. They have cited a few bad apples as the root cause. But they still have handled the whole thing poorly and it looks like it will cost them, not only monetarily but also in terms of reputation.

UPDATE: Right after finishing this the jury in the case awarded the plaintiffs $250 million in punitive damages. Noted in the piece there is that the company feels this was not as bad as they feared and that the reputation to the company will be less affected because it is their sales staff not a drug-related issue, plus the company is willing to change its environment. This view looks back up by this Wall Street Journal piece (only a preview unless you are a subscriber). But I have to say that it has sullied my impression of Novartis, who I did not link so much with the uncaring Big Pharma machine. That probably reflects some naivety on my part rather than anything else.


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