FINAL SETTLEMENT IN VELEZ V. NOVARTIS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

In May 2010 we reported the results of a 5-week jury trial in Velez v. Novartis Corp. in which the jury deliberated for four days. The essence of that report was that the jury awarded nearly 3.4 million dollars to 12 named female plaintiffs for lost wages and compensatory damages. But as noted in the May alert, that was just the appetizer, as the jury also awarded 250 million dollars in punitive damages for a class of 5,600 current or former female sales representatives employed between 2002 and 2007.

On November 19, 2010, Judge McMahon held a fairness hearing at which no objections were raised by either side as she granted final approval of up to 152.5 million dollars in monetary relief for 6,026 female sales employees who worked at Novartis from July 15, 2002 through July 14, 2010. In addition to the monetary relief, Novartis agreed to an additional 22.5 million dollars in nonmonetary relief representing the company’s commitment to revise employment policies so as to eliminate sex discrimination.

The monetary relief breakdown includes 38.1 million dollars for attorney’s fees and 2 million dollars in litigation costs. David Sanford of Sanford Wittels & Heisler, the planitffs’ attorney, said “this is an excellent monetary agreement for sales representatives of Novartis”, and “more importantly, Novartis will be a better company going forward; it is changing its ways and doing the right thing.” It’s also an excellent monetary agreement for the law firm, and illustrates the costs of fighting large class action suits.

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