Note to management: If you’re going to look into a possible problem with unfair compensation practices, you better be ready to overhaul your policies.
Just ask the pharmaceutical company Novartis, whose internal research showed a substantial gender pay gap. One wee problem: The company didn’t do anything about it.
That research became the proverbial smoking gun when a group of female drug reps filed a class action suit alleging they were held back from promotions and suffered other adverse job actions because of a male fraternity-type company culture, according to John Alan Doran of the Phoenix law firm Greenberg Traurig.
A jury awarded the sales reps $250 million in punitive damages. When the company appealed the verdict, company lawyers were lucky to eventually be able to settle for only $152 million.
Lessons from the case
Doran offers three lessons from the Novartis case about walking the talk on a commitment to a level playing field for all employees:
- Don’t do a study if you’re not going to do anything about it. You’re much better off without it.
- Use metrics to show your commitment to diversity, and
- Build a file of diversity success stories with personal anecdotes.
In a class action lawsuit by a group of allegedly damaged employees, the plaintiff’s attorneys will put into evidence only the testimony of the worst few cases that make the company look bad.
To counter that legal and communications strategy, you will need your own “good stories” for the company.
Just in case you ever need them, better start keeping files on those good stories right now.
Doran recently spoke about the Novartis case at the 2011 Labor & Employment law Advanced Practices (LEAP) symposium in Las Vegas.