Record Class Action Settlement Follows Massive Class Action Verdict

The stakes in workplace class action litigation just got higher. A class of female sales representatives at Novartis have agreed to accept a settlement of $175 million to resolve their sex discrimination class action in Velez v. Novartis Pharmaceuticals Corp., Case No. 04-9194 (S.D.N.Y.). As such, it is one of the 10 Largest EPL Settlements. On July 14, 2010, the court granted preliminary approval of the settlement. It covers a nationwide class of female current and former sales employees who asserted claims of systemic gender discrimination in pay, promotions, and pregnancy leave. The company will pay up to $152.5 million in back pay and compensatory damages and an additional $22.5 million to fund programmatic relief for company-wide equal employment opportunity improvements, training, and enhanced bias complaint processes for its sales staff. The settlement follows in the wake of a record $253.3 million verdict on May 19, 2010. The verdict represented the culmination of one of the largest class action discrimination cases to go to trial and resulted in a jury finding that Novartis had discriminated against thousands of female sales representatives over pay, promotion, and pregnancy. The jury awarded about $3.3 million in compensatory damages to just 12 of the class of over 6,500 women, and $250 million in punitive damages. The remaining class members can apply for damages now, which will likely be determined by a special master.  This NY Times story has details on the trial verdict. The settlement followed quickly after Novartis filed an appeal of the verdict.

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