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Novartis Pharmaceuticals, Longstanding Honoree on Working Mother’s 100 Best Companies List, Ordered to Pay $250 Million in Sex Discrimination Lawsuit

May 30, 2010
Novartis headquarters

Novartis headquarters in Switzerland / Peter Frommenwiler for Bloomberg News

Ah, old-school workplace sexism. The dirty jokes, the sexual harassment, the firing of women just because they’re pregnant, the male bonding trips to strip clubs. The thought makes one nostalgic for the era of 9 to 5, when working women decided they’d had enough, drove out the bigoted boss, introduced flex time and pay raises and opened an in-house daycare center.

Oh wait, it’s 2010 and the harassment, unlawful terminations, and discrimination have continued, sometimes even in companies that boast all those perks intended to make the workplace women-friendly. Case in point: Novartis Pharmaceuticals, which faced a class-action sex discrimination lawsuit filed by 17 female employees. The lawsuit made waves back in April when it became one of the largest sex discrimination cases ever to go to trial rather than being settled out of court. On May 19, the verdict came in. The New York Times reports:

The drug maker Novartis must pay $250 million in punitive damages for discriminating against thousands of female sales representatives over pay, promotion and pregnancy, a federal jury ruled…

The decision was announced in federal court in Manhattan by a jury of five women and four men who ruled Monday that the [Swiss] company’s United States division, the Novartis Pharmaceuticals Corporation, engaged in a pattern of discrimination against women.

The $250 million in punitive damages is 2.6 percent of the company’s $9.5 billion 2009 revenue. The women had sought from $190 million to $285 million.

Nearly 5,600 other female employees could be eligible to receive damages for back pay. Novartis, of course, is planning to appeal the court ruling.

The Novartis case is especially interesting for two reasons: the fine the company has been slapped with is reportedly the largest in history for this kind of suit, and the company previously enjoyed a reputation as a very women-friendly place.

In an excellent essay Slate’s Sharon Lerner examines why Novartis was named among the top 100 companies for women by Working Mother magazine for 10 years in a row, despite all this evidence that the company culture contains pretty substantial elements that are downright antagonistic toward women. Turns out, it all comes down to the way the magazine compiles its 100 best list:

The 100 best companies are chosen according to employers’ self-reports, with no input from employees, which leaves little recourse for exploring the potential gaps between stated policies and reality. While Novartis has instituted several family-friendly programs and policies, the problem is that the company clearly also has serious endemic problems that fly in the face of those much-heralded efforts. So if women are entitled to certain benefits and then mocked or punished for using them, they’re useless. “If you’re in a culture that devalues women as workers once they become mothers, it doesn’t matter if you have a policy on the books,” says Cynthia Thomas Calvert, deputy director of the Hastings Center for Work/Life Law, a research and advocacy group in California.

Lerner also points out that it’s critical to recognize the difference in treatment and opportunities available to women in different levels at the same company.

Even if Working Mother had polled employees, they might not have gotten to the horror stories. Higher-paid employees tend to have better access to family-friendly policies such as flex-time. And lower paid workers, like the sales reps and entry-level workers in the suit, tend to be more vulnerable to discrimination.

And in more depressing news, Working Mother’s 100 best list seems to be perhaps not so good an indicator of how woman-friendly a workplace is, but a handy tool for measuring how often companies’ actions don’t align with the letter and spirit of their own progressive policies. Lerner reports:

Thirty-six companies that have been on Working Mother‘s 100 Best Companies list have faced “family responsibilities discrimination” suits filed by employees who are pregnant or care for young children, sick family members, or aging parents, according to Calvert. Plaintiffs prevailed in 15 of those cases, including in suits against Deloitte & Touche and Ernst & Young, two accounting firms often heralded for their efforts to retain women by instituting family-friendly policies.

This is a sad but necessary reminder that changing laws and policies is completely different from changing attitudes and actions—and this second step could be the more difficult one. Hopefully enforcing anti-discrimination law through hefty fines like the Novartis ruling will lead companies to change their tune.

For more interesting reading, see Dr. Sasha Galbraith’s essay at the Huffington Post where she connects the company culture of Novartis, a Switzerland-based company, with that country’s practically codified discrimination against working mothers.

Women, whose primary role in society is taking care of home and kids, are traditionally paid 15 percent less than an equivalent male doing exactly the same job. Most women work part-time because daycare facilities are very hard to find, and society frowns on ambitious working moms. If that’s not enough, the Swiss tax code penalizes couples when both partners work full-time.

Consider this: women in Canton Appenzell (where the cheese comes from) were not allowed to vote until 1990. Until a few years ago, it was normal (and completely legal) for a company to publicly and openly specify the sex, age and other qualities it preferred in candidates for particular jobs.

Also, check out some of Novartis’ incriminating internal emails at BNet.com.

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