Thursday, May 20, 2010

Cost of Discrimination: $1 Billion

It takes a pretty big number to get employment law trials in the news. I don't know what the magic number is, but I know $1 Billion will suffice! An attorney representing the plaintiffs estimates that Novartis will end up paying about a billion dollars following a jury verdict for the plaintiffs in a gender discrimination case.

The Wall Street Journal reports that a federal jury awarded 12 women $3.37 million in compensatory damages. How does that become $1 Billion? Simple. Toss in a $250 million punitive damages award and factor in the estimated $750 million compensatory damages for the 5,600 women covered by the class-action (did I mention class action?), and Novartis could be looking at close to a $1 Billion price tag.

I think you're technically not supposed to capitalize "Billion," but c'mon, it's a BILLION! In a WSJ Law Blog entry by Ashby Jones, an employment lawyer calls the case a "game changer." The lawyer then goes on to cite this verdict, the recent certification of a class of approximately 1.5 million in a Wal-Mart case, and the current presidential administration's interest in addressing pay disparity to conclude: "You're going to see more class-actions filed, and more individual claims of gender and race discrimination. It could be a bonanza."

So, will this be a game changer? On the one hand, there's a bit of a "shock and awe" effect from a $1 Billion judgment. It may inspire some more plaintiffs to come forward, and more plaintiff's attorneys to represent them. And maybe some defendants will cough up some more money ("We don't wanna wind up like Novartis!"). On the other hand, it's hardly news that losing an employment discrimination jury trial involving a class of thousands will come with a hefty price tag. I guess we'll see.

Some of my favorite blogs have also covered this case:
Posted by Philip Miles, an employment lawyer with McQuaide Blasko in State College, Pennsylvania.