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Chapter 6
current and former sales representatives who alleged systemic discrimination in pay,
promotions, and other working conditions at Novartis.
How did this happen? Novartis had numerous programs designed to help working
mothers. As noted in a 2009 article in Working Mother magazine, Novartis offered
“lunch and learn” sessions on pediatric issues ranging from sleep to nutrition. The
company also offered a variety of childcare benefits, including discounts on full-time
care at national daycare chains and in-home sick care, and the company made a
$1,000 childcare contribution to anyone who saved $4,000 in a pretax childcare
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account.
Unfortunately, these innovative programs apparently did not reflect the culture of
the sales organization at Novartis. The class action lawsuit included numerous charges of
sexual harassment and unfair denial of pay raises and promotions. As noted in a Wall
Street Journal article, the court found that new mothers or pregnant women were
singled out. For example, one mother was passed over for promotion because the
company felt that she would not be able to leave home for the travel involved in the job
because she had four children. In another instance, one woman who was highly-rated in
her company evaluations was overlooked for further management education. And some
pregnant women were given an extra workload because a manager thought the maternity
leave policy at Novartis was too generous.
In addition to the financial payment to the plaintiffs, the settlement requires
Novartis to implement a number of changes to its human resource processes, including:
• Revising its policies and processes for investigating discrimination claims
• Implementing specified changes to its performance evaluation system and
conducting mandatory training for all managers regarding that system
• Creating an appeals process for employees who disagree with their
performance ratings
• Implementing changes to its management development program training
• Implementing changes to its tracking and monitoring of promotional
opportunities

Probably the most important factor in avoiding workplace discrimination is making sure
the culture of the company does not tolerate it, but good Human Resource information
processes can provide the data and tools to analyze and monitor a company’s Human
Resource practices to avoid discrimination.
Questions:
1. In addition to the damages assessed against it in the discrimination case,
what other costs were incurred by Novartis in association with this lawsuit?
How do these compare to the financial cost of the settlement?
2. How could an integrated human resources information system be used to
detect potential pay discrimination before it becomes systematic?
3. How would you design a compensation system so that pay discrimination is
not likely to occur?

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