* Novartis to pay $152.5 million to plaintiffs
* Novartis to pay $22.5 million on policies, programs
* Jury had in May awarded $250 million punitive damages
* Novartis shares close up 1.3 percent
(Adds details, background, bylines)
By Grant McCool and Jonathan Stempel
NEW YORK, July 14 Novartis AG NOVN.VX will
pay $175 million to settle a class-action lawsuit accusing the
Swiss drugmaker of discriminating against 5,600 current and
former female sales representatives in pay and promotions.
The settlement was announced less than two months after a
Manhattan jury ordered on May 19 the company's U.S. unit
Novartis Pharmaceuticals Corp to pay $250 million in punitive
damages, after a six-week trial.
That jury concluded Novartis engaged in a pattern of
discrimination between 2002 and 2007.
Lawyers for the plaintiffs said it was the largest U.S.
gender discrimination case ever to go to trial.
In a joint statement with the plaintiffs' lawyers, Novartis
said it will pay up to $152.5 million to class members, and an
additional $22.5 million to improve companywide complaint
processes, personnel oversight and performance assessments.
Female employees contended Novartis' human resources
division routinely ignored complaints about discrimination,
including where pregnancies were involved.
Novartis spokeswoman Pamela McKinlay said in an email the
accord resolves all gender bias claims in the 2004 lawsuit
against the Basel-based company.
David Sanford, the plaintiff's lead lawyer, said in a
statement the terms allow "full compensation" for the women,
"ensuring that every woman who worked at Novartis over the past
eight years has been compensated fairly."
Lawyers for the plaintiffs declined further comment.
LARGER AWARD AVOIDED
By settling, Novartis avoided the possibility of awarding
large sums of compensatory damages.
Two days before setting punitive damages, the jury of five
women and four men awarded an additional $3.3 million of
compensatory damages to 12 women who testified.
That could have opened the door for thousands of other
women covered by the lawsuit to claim such damages, likely to
be awarded by a court-appointed special master.
The Novartis case is not the largest gender bias
class-action pending in U.S. courts.
In April, the U.S. Ninth Circuit Court of Appeals in San
Francisco, in a 6-5 ruling, said a lawsuit accusing Wal-Mart
Stores Inc (WMT.N) of discriminating against women in pay and
promotions may proceed as a class action.
That case could affect more than 1 million current and
former female workers. Analysts have estimated it could cost
the world's largest retailer several billion dollars in damages
if it remains a class-action. Wal-Mart has said it would appeal
to the U.S. Supreme Court.
The Novartis settlement requires approval by U.S. District
Judge Colleen McMahon. A hearing is scheduled for Nov. 19.
Novartis' U.S.-listed shares closed up 63 cents, or 1.3
percent, at $50.75 on the New York Stock Exchange. The company
announced the settlement after U.S. markets closed.
The case is Velez et al v. Novartis Pharmaceuticals Corp,
U.S. District Court, Southern District of New York, No.
(Reporting by Grant McCool and Jonathan Stempel in New York;
editing by Andre Grenon)