Novartis settles discrimination suit

Novartis has agreed to settle a class-action gender discrimination lawsuit for more than $150m. Novartis asserted that the discrimination described in the suit is "not systemic" at the company, but pledged a number of improvements over the next three years, representing an additional $22.5m worth of settlement-related costs.

About 5,600 female sales reps were plaintiffs in the suit, which alleged that the women suffered discrimination in pay, promotions to management, and in the terms and conditions surrounding pregnancy. The settlement, filed in the Southern District of New York, calls for Novartis to pay back-salary and compensatory damages of up to $152.5m to eligible plaintiffs.

"The terms of this agreement allow for full compensation of both former and current female field force employees, ensuring that every woman who worked at Novartis over the past eight years has been compensated fairly," said David Sanford of Sanford Wittels & Heisler, lead counsel for the plaintiffs.

In addition, Novartis has committed to changes including revising its sexual harassment policy and training; strengthening the process for filing discrimination complaints; hiring an external expert to identify and help remedy gender disparities; and revising its performance management process.

"The trial revealed that some of our associates had experiences influenced by managerial behaviour inconsistent with our values," said Novartis CEO Joe Jimenez. "As a company, we are now even more strongly resolved to ensure that all our employees act and behave in accordance with our corporate values."

In May, a jury in Manhattan Federal Court decided that Novartis had to pay $250m in punitive damages for discriminating against the female sales reps in matters related to pay and promotion. Novartis appealed that decision, and the ongoing litigation resulted in the current settlement.