Reference no: EM133092668
At Novartis, Reputation Did Not Match Reality After 10 years of being on Working Mother magazine's "100 Best Companies for Working Mothers" list, Novartis pharmaceutical settled a gender discrimination class action lawsuit in 2010 for $175 million dollars. The settlement covered more than 6,000 female current and former sales representatives who alleged systemic discrimination in pay, promotions, and other working conditions at Novartis.
How did this happen? Novartis had numerous programs designed to help working mothers. As noted in a 2009 article in Working Mother magazine, Novartis offered "lunch and learn" sessions on pediatric issues ranging from sleep to nutrition. The company also offered a variety of childcare benefits, including discounts on full-time care at national daycare chains and in-home sick care, and the company made a $1,000 childcare contribution to anyone who saved $4,000 in a pretax childcare account.
Unfortunately, these innovative programs apparently did not reflect the culture of the sales organization at Novartis. The class action lawsuit included numerous charges of sexual harassment and unfair denial of pay raises and promotions. As noted in a Wall Street Journal article, the court found that new mothers or pregnant women were singled out. For example, one mother was passed over for promotion because the company felt that she would not be able to leave home for the travel involved in the job because she had four children. In another instance, one woman who was highly-rated in her company evaluations was overlooked for further management education. And some pregnant women were given an extra workload because a manager thought the maternity leave policy at Novartis was too generous.
In addition to the financial payment to the plaintiffs, the settlement requires Novartis to implement a number of changes to its human resource processes, including:
- Revising its policies and processes for investigating discrimination claims
- Implementing specified changes to its performance evaluation system and conducting mandatory training for all managers regarding that system
- Creating an appeals process for employees who disagree with their performance ratings
- Implementing changes to its management development program training
- Implementing changes to its tracking and monitoring of promotional opportunities
Probably the most important factor in avoiding workplace discrimination is making sure the culture of the company does not tolerate it, but good Human Resource information processes can provide the data and tools to analyze and monitor a company's Human Resource practices to avoid discrimination.
Questions:
1. In addition to the damages assessed against it in the discrimination case, what other costs were incurred by Novartis in association with this lawsuit? How do these compare to the financial cost of the settlement?
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