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$152.5 Million Settlement in Novartis Gender Discrimination Suit

By Tanya Roth, Esq. | Last updated on

Novartis Pharmaceuticals has reached a settlement in the gender discrimination class action filed by a number of its women employees. Although a May 19 jury verdict had already awarded $250 million in punitive damages to a group of 5,600 employees, the company and plaintiffs came to an agreement which will cost the company $152.5 million. There will be no appeals or other challenges which might have affected the jury verdict.

The Washington Post reports the suit was originally filed in 2004 by Amy Velez and four other women who claimed they faced discrimination over pay and promotion and for pregnancy. The jury found Novartis liable for gender discrimination on May 17 and awarded $3.4 million in damages to 12 of the plaintiffs. Two days later, the jury awarded another $250 million in punitive damages.

The settlement must still be approved by U.S. District Judge Colleen McMahon. The Post reports not only will the company provide $60 million in back pay and an about $40 million for compensatory damages, but will pay additional damages to the named plaintiffs and to the twelve women who testified in the suit.

An additional $22.5 million will go to improve company policies and training around discrimination issues. The Associated Press reports that during the trial, witnesses described an "old boys' network" that punished women who became pregnant, finding ways to harm their careers, pressure them to take shorter leaves or to work while they were on leave.

According to The Post, Novartis Pharmaceuticals has agreed to revise its sexual harassment policies and training, strengthen its employee complaint process and hire an outside specialist to help it identify gender pay disparities in the company and revise its performance management process.

Although it will make significant changes in its policies regarding gender and the workplace, the company did not admit that the discrimination the plaintiffs faced was a matter of company-wide policy. "While we believe that there was not systemic discrimination at NPC, the trial revealed that some of our associates had experiences influenced by managerial behavior inconsistent with our values," Joe Jimenez, Novartis AG's chief executive officer, said in the statement.

Plaintiffs' attorneys will receive a share of the settlement as well. If approved by the judge, they will be awarded $40.1 million in fees and expenses.

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