While most employment class actions today address overtime or independent contractor issues, discrimination actions are still alive and very dangerous for employers. Last May, a New York jury awarded $3.4 million in compensatory damages, and $250 million in punitive damages against pharmaceutical company Novartis in a case alleging sex discrimination involving sales representatives. That’s a quarter of a billion dollars, and doesn’t even include attorney fees.
On July 14, 2010, the court approved a settlement of that verdict for a total of $175 million. Of that amount, about $100 million was set aside for compensatory damages to the approximately 5,600 class members, an estimated $22.5 million was allocated as “non-monetary relief” in the form of new company programs to address discrimination, and $40 million was awarded to the plaintiffs’ attorneys for fees and expenses. $164,500, or approximately one third of one percent of the attorney fee award, was designated to be paid to an unidentified nonprofit organization to advance women in the workforce.
The bottom line: Race and sex discrimination claims may in many cases be more difficult for plaintiffs to mount than wage and overtime suits, but the Novartis verdict and settlement demonstrate that such claims present very real dangers for employers.