As the #MeToo movement puts workplace sexual harassment at the front, Merck & Co. and Novartis, two of the largest pharma companies, find themselves entangled in a different kind of gender problem: alleged pregnancy discrimination.
Merck for years has been embroiled in a lawsuit that accused it of discriminating against female sales reps in promotions and pay. Though the plaintiffs have decided not to pursue some pregnancy-specific allegations as a class, a recent New York Times article revived attention to the issue and another lawsuit Novartis settled for $175 million back in 2010. The article moved the New York state government to launch an investigation.
The Merck suit, first brought at a New Jersey court in May 2013 by Kelli Smith, a former Merck saleswoman, alleged that Merck discriminated against female sales reps and against pregnant women in its decision on promotions and pay.
A Merck spokeswoman said that the plaintiffs abandoned the class pregnancy discrimination case after years of discovery found "no evidence" of those specific allegations. Deborah Marcuse, a partner with law firm Sanford Heisler Sharp and lead counsel for the plaintiffs in the Merck case, told FiercePharma that all four named plaintiffs continue to pursue their individual pregnancy-specific claims, while the broader gender pay discrimination claims await court decision on a class basis.
"We remain confident that this case lacks merit, and the company will continue to vigorously defend itself," the Merck representative said in a statement. "Merck is fully committed to providing equal employment opportunities and has a strong anti-discrimination policy that prohibits discrimination on the basis of characteristics, such as gender, pregnancy, race, age, disability and sexual orientation."
Smith joined Merck in June 2004, and later earned several company awards, including the Customer Trust and Value Award in 2009, which Merck awarded to about 1 out of 100 sales reps, according to the complaint. But amid a large-scale restructuring Merck initiated after its merger with Scherling-Plough, Smith was demoted in March 2011, after she returned from maternity leave, and was put in the lowest-paid sales rep tier, the suit says.
The complaint also alleged that one commercial operations leader told Smith that her tier assignment was due to "the timing of [her] baby." The director has also allegedly referred to a female employee as "the [expletive] hottest one in here" and asked her what it would take for her to accompany him to his hotel room, the suit file shows.
Smith isn’t the only plaintiff on the lawsuit. Rachel Mountis, another former Merck saleswoman, had been promoted and given company awards since joining the drugmaker in 2005. Merck also paid for her master’s degree study at New York University. But in December 2010, just three weeks before she was due to deliver, she was told that Merck had decided to lay her off. Though she did get another job within Merck, it was at a lower-paying position with fewer leadership opportunities. She was demoted again in December 2012 while on her second maternity leave, the complaint says.
Sanford Heisler Sharp’s Marcuse said 700 people have opted in the ongoing case on pay discrimination, adding that the suit has a potential to include up to 3,500 current and former female sales reps. A trial date has not been set. Merck had eliminated about 40,900 positions by the end of 2016 through two major restructuring rounds since the Scherling-Plough megamerger.
Merck isn’t the only pharma company that has been under fire with gender-bias complaints. Novartis in 2010 agreed to pay $175 million to settle a similar suit. Christine Macarelli, a former Novartis saleswoman, said in that case that her supervisor told her "women who find themselves in my position—single, unmarried—should consider an abortion," the NYT reported.
Now both Merck and Novartis are under scrutiny from the New York state government’s ...
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