On March 13, 2006, a group of former and current female employees filed their fourth amended complaint under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e)-5(f), et seq., against the Novartis Corporation in the United States District Court in the Southern District of New York. The plaintiffs, represented by private counsel, asked the Court for injunctive relief, back pay and front pay, and compensatory and punitive damages, alleging sex discrimination, including pregnancy discrimination. Specifically, the plaintiffs contend that the defendant discriminated in compensation, promotion, personnel evaluations and treatment of women taking pregnancy leave. 244 F.R.D. 249 (S.D.N.Y. 2007).
This action began on November 19th 2004, when a smaller group of plaintiffs filed their original complaint. The parties engaged in extensive discovery, specifically on the relationship between the parent company and its subordinate. There was also an early question about whether the Chairman of Novartis was being properly served notice on the case (see Order confirming proper service).
On August 16, 2007, the Court (Judge Lynch) granted class certification and defendant's motion for summary judgment. This order granted a class of all women who are currently holding, or have held, a sales-related job position with [NPC] during the time period July 15, 2002 through the present, including those who have held positions as Sales Representatives, Sales Consultants, Senior Sales Consultants, Executive Sales Consultants, Sales Associates, Sales Specialists, Senior Sales Specialists, and District Managers I. 244 F.R.D. 248 (S.D.N.Y. 2007). Furthermore, included in this class were any women discriminated against on the basis if pregnancy with respect to the issue of incentive-based compensation. 244 F.R.D. 267 (S.D.N.Y. 2007).
While the Court (Judge Lynch) certified the class, he also granted a motion of summary judgment for the defense, holding that the corporation could not be liable for any Title VII violation by NPC. This judgment was based on lack of evidence from the plaintiff that the Corporation and NPC functioned as a single enterprise. 244 F.R.D. 254-255 (S.D.N.Y. 2007).
A jury trial commenced on April 7, 2010. The jury delivered a verdict on behalf of the plaintiffs and awarded compensatory and punitive damages. The trial concluded on May 19, 2010, with equitable relief to be order by the Court at a later date.
In light of this, the parties engaged in vigorous negotiations and entered into a Settlement Agreement in July 2010, according to which the defendant Novartis would pay $175 million in total and adopt other measures to reduce or eliminate discrimination against female workers.
On July 14, 2010, the court (Judge Castel) preliminarily approved the settlement agreement. On November 30th, 2010, the court (Judge Colleen McMahon) finalized the judgment, certifying the class, approving the settlement agreement, and dismissing the case with prejudice. The defendant was required to pay $152,500,000 in backpay, damages to the class, and other charges related to the litigation.
On April 8th, 2011, the court (Judge McMahon) approved of modifications to the list of class members and the claims administration process as laid out in the settlement agreement, in order to ensure that all class members receive accurate settlement awards.
On September 23rd, 2013, the court (Judge McMahon) addressed a letter to all counsel to encourage continued compliance with the settlement agreement. The parties agreed to a 3-year compliance period, however the appointed overseer to the compliance was unable to reach either party to ensure continued cooperation.
On April 29, 2014, the court (Judge McMahon) ordered the monitoring period concluded and declared the settlement to have been carried out, thereby terminating Defendant's obligations to the class and concluding the case. Kunyi Zhang - 10/06/2010
Michael Abrams - 11/03/2016