Who's Going to Get What in the $250M Novartis Sex Discrimination Verdict

Last Updated May 19, 2010 6:07 PM EDT

Employees at Novartis (NVS) are already trying to figure out how much female employees of the company will get in the $250 million sex discrimination verdict handed down today.

Here's some back-of-the-envelope math on the likely average payments per woman. The first thing to remember is that the $250 million is just the punitive damages shared by women covered by the suit. (You must have been employed at Novartis between 2002 and 2007 to receive it -- sorry, newbies!) Actual compensatory damages come on top of that, and they too will run into the millions:

  • Punitive damages: 5,600 women will share a total of $250 million = ~$44,642 each.
  • Compensatory damages: The named plaintiffs in the suit received between $50,000 and $600,000 each (for a total of $3.4 million). Now any of the other 5,600 women will be allowed to make a case to the judge that they suffered too. Not everyone will, and among those who do not everyone will be able to prove they lost out. Assume 2,500 women receive an extra $10,000 in compensation each (for a total of $25 million).
  • Back pay: The judge could make a further finding of disparate impact that would award back pay to employees. The lawyers are seeking $37 million for this. That works out at about $6,607 each.
  • Total damages to Novartis: Probably north of $315 million.
  • Total average award to a successful claimant: Probably north of $60,000.
  • Damages are capped at $300,000 per class member.
Two further thoughts: This Wall Street analyst confirmed my previous cynicism about why these verdicts aren't much of a deterrent for large corporations to reform themselves:
"$250 million fine as a one-off is really no great shake," Nick Turner, an analyst at Mirabaud Securities in London, said in an interview.
"It doesn't say much for the firm as an employer," Turner said. "But from the point of view of Novartis as an investment opportunity or on valuation, I can't see that this makes any difference."
And Joe Simmons, the man who misled police when sales rep Marjorie Salame reported to him that she'd been raped by one of her customers, should probably take a week off before he comes back to work. He's unpopular, it seems.


Image via Flickr user borman818, CC 2.0.