At the end of a week that saw several major companies announce job cuts, the pharmaceutical workforce finally got some good news on Friday. Manhattan US District Judge Colleen McMahon said that she expected to approve an agreement between Novartis Pharmaceuticals (Basel) and a class of 6200 women, thus settling a gender-discrimination lawsuit. “It is the rare settlement where economic damages are compensated in full,” the judge said, according to an article in the Wall Street Journal.
In May 2010, a jury found that Novartis Pharmaceuticals had discriminated against its female employees by paying them less money than their male counterparts and giving them fewer chances for promotions. If Judge McMahon approves the agreement this week, Novartis’s US unit will pay the women, who are all current and former female employees, about $152.5 million. On top of that, Novartis will make several improvements, including revising its sexual-harassment policies and training and hiring an external specialist to identify and remedy gender disparities at the company. The total value of the settlement is about $175 million.
Unfortunately, women in the pharmaceutical industry suffered a setback just two days before Judge McMahon’s statement. On Wednesday, the US Senate failed to bring the Paycheck Fairness Act to the floor for a vote, effectively ending its chances for passage in the current Congress. The bill would have closed loopholes in the Equal Pay Act of 1963 and sweetened incentives to prevent pay discrimination against women. The bill also would have required employers to demonstrate that wage gaps resulted from factors other than gender and to train women in salary negotiations.
Republicans were unanimous in their opposition to debating the bill. They and the US Chamber of Commerce have publicly opposed the Act out of concerns that it would lead to a rise in employee lawsuits, which would be costly for employers to fight. But if companies complied with the law by paying men and women equally, I think that they would face fewer employee lawsuits. And although defending itself against a lawsuit might be a burden for a pharmaceutical company, I think it is a much greater burden for aggrieved women to wage the suit in the first place.
The Novartis decision and settlement puts the pharmaceutical industry on notice that it can be held accountable for gender discrimination. Although the settlement is good news for women, it is also unusual because not all plaintiffs in gender-discrimination lawsuits are fortunate enough to receive full compensation in the end, as Judge McMahon noted. Let’s pause to celebrate the step toward gender equality that the settlement represents. But let’s also hope that the Paycheck Fairness Act receives due consideration in the next Congress.