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Karma's a Bitch: "Boob Job" Remark Haunts Drug Company in Overtime Pay Suit

By Jim Edwards

Updated on: June 6, 2011 / 1:13 PM EDT / MoneyWatch

A federal judge has certified a class-action lawsuit against Endo Pharmaceuticals (ENDP), maker of the Lidoderm pain patch, after a drug sales rep claimed she was sexually harassed by her female boss. But the certification isn't for a sex discrimination case -- it's an overtime pay case that, if successful, could lead to raises for Endo's entire staff, male and female.

The disconnect comes because of the bizarre way that workplace laws intended to protect women from sexual harassment on the job have come to insulate employers from such lawsuits, not empower women. The result of this distortion is that women subjected to sexual pestering at work now have to shoehorn their claims into lawsuits that can be a lot more damaging to companies.

That's the situation in the Endo case: Susan S. Quinn alleges she complained to Endo CEO David Holveck in May 2010 that her supervisor, Melissa Phillips, made a number inappropriate comments about her breasts and her attractiveness for several months:

For example, Ms. Phillips said that someone from another district was joking about whether Ms. Quinn had a "boob job," and on another occasion she commented that Ms. Quinn's breasts were distracting.
Ms. Phillips also stated to Ms. Quinn that she should familiar with the physicians she called on by, for example, sharing details about her private life. Ms. Phillips also told Ms. Quinn that she should use smaller words to appear less intelligent.

Ms. Quinn complained about these comments, telling Ms. Phillips that she was uncomfortable discussing her appearance and that she intended to act professionally.

Fired after complaining
Quinn was fired a month after complaining. In her suit, Quinn complains that the firing was an illegal retaliation for her complaint. Endo denied the claims. But the bulk of the suit focuses on whether Endo's pharmaceutical sales reps are covered by federal overtime pay laws.

The case is a smart one because overtime litigation has favored drug sales reps in a string of cases that have affected the entire industry. The case was filed in Massachussets, part of the First Circuit federal court jurisdiction, one of few circuits that has yet to address the issue. Almost all the federal circuits have favored overtime pay for reps except the Ninth Circuit, in the West, which ruled in favor of companies.

The suit sounds gossipy but it goes to the core of the job for female reps. Drug companies have historically hired women who are cheerleaders, or are "hot," and they are expected to flirt with male doctors in order to goose prescription sales. The fact that a female supervisor allegedly groomed a female underling in this way tells you how pervasive this perception is.

Had Quinn sued Endo for sexual harassment alone the company could have won, settled or lost the case for mere thousands of dollars. Quinn probably would have lost, however. Sexual harassment laws have tight restrictions on when suits can be filed, HR departments are often controlled by lawyers who have no interest in protecting female workers, companies can use the same laws to insulate themselves from liability (i.e. by offering regular HR training sessions), and employees can find themselves forced into unfair arbitration proceedings no matter how valid their claims.

Because Quinn took her anger to a lawyer who knew that drug companies are mostly losing overtime pay cases, Endo's potential liability has spiraled from a single employee to the entire workforce. The takeaway is that just because the law reduces employers' liabilities in some areas where employees are treated badly doesn't mean those claims won't pop up in areas where companies' liabilities are high. You could say that treating employees badly is never good management.

Or, more colloquially, karma's a bitch.

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Image by Flickr user infomatique, CC.