Big Pharma's Gender Headaches
Recent gender-based class-action suits against pharmaceutical makers shed some light on potential root causes, as well as actions HR professionals may take to avoid similar situations in their own organizations, regardless of industry.
By Lin Grensing-Pophal
Last month, a New Jersey-based law firm added four additional class representatives to a class-action gender-discrimination employment suit originally filed last May by Kelli Smith in New Jersey against Merck & Co. Inc. The firm also increased the potential value of the case to $250 million.
The suit alleges that all class representatives of the suit were highly regarded members of Merck's salesforce, earning many accolades for their performance, until they became pregnant. Then -- both during their pregnancies and after returning to work -- they were subjected to hostility, discrimination, workplace reassignments and other situations that both reduced their compensation and caused anxiety.
"The addition of four female Merck sales representatives as class representatives is further evidence of the pervasive nature of gender-based hostility throughout Merck's U.S. salesforce," says Kate Mueting, attorney with the plaintiffs' legal team. "All of these women have experienced disastrous and painful career consequences as a result of Merck's policies that discourage female employees from having children and punish those who do. This class action brings light to this discrimination and aims to prevent the company from future discrimination."
The law firm that added those plaintiffs -- Sanford Heisler, with offices in New York, Washington and San Francisco -- also recently won a case against the drug maker Novartis, with a monetary award that is the largest ever in a U.S. employment discrimination dispute: $253 million in compensatory and punitive damages.
As if HR professionals around the country weren't already aware of these issues, President Obama recently focused all eyes on the ongoing gender disparity in salaries in his recent State of the Union address: "[W]omen make up about half our workforce," the president said. "But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it's an embarrassment."
It's time, he continued, to do away with "workplace policies that belong in a 'Mad Men' episode."
While declining to address the specifics of the case, Merck, based in Whitehouse Station, N.J., released a written statement: "We are aware that current and former female sales representatives have filed a lawsuit with allegations of gender discrimination. We are confident that this case lacks merit, and the company will vigorously defend itself. Merck is fully committed to providing equal employment opportunities for all employees and has a strong anti-discrimination policy that prohibits discrimination on the basis of characteristics, such as gender, race, age, disability and sexual orientation."
They further indicate that they provide multiple avenues for employees to raise concerns, that they maintain a non-retaliation policy against any employee who comes forward with a complaint, that they "proudly support working parents and that they have been recognized by Working Mother as one of the top 100 companies for working mothers for the past seven consecutive years."
Experts say these two class-action suits against pharmaceutical makers may not only shed light on some potentially troubling root causes within the industry, but may also show HR professionals how to avoid a similar scenario in their own organizations, regardless of their industry.
Nicholas Woodfield, principal of The Employment Law Group in Washington, has a unique perspective on the inner workings of such cases, as the firm he works for has been engaged in gender-discrimination cases against Fortune 500 companies around the United States. But, he says, he also has two sisters who were both pharmaceutical sales representatives and has gleaned knowledge from their experiences.
Historically, he says, such sales positions have been staffed primarily by women in an effort to gain access to busy - and typically male -- doctors.
"Not just women," he says, "but attractive women."
And Michael Pruitt, an employment-law attorney with Jackson White in Mesa, Ariz., has represented other pharmaceutical sales representatives in a class-action lawsuit before the U.S. Supreme Court, echoes Woodfield's assertion.
"The perception with Big Pharma," Pruitt says, "is that it employs many young females in 'outside sales' positions who meet directly with the doctors to answer questions and influence their prescription practices. But, beyond these positions, there is limited upward mobility for female employees."
And if pharma companies do indeed want young, attractive people pitching their wares to physicians, says Woodfield, then sending a visibly pregnant woman to pitch new medications to a male doctor "just isn't as effective" a sales technique as sending a slender, non-pregnant sales rep would likely be.
This may be a cynical perspective, he acknowledges, and he emphasizes that it is his personal opinion, but "I think it's a fair assessment of why you're seeing this in this industry."
Importantly, Woodfield notes, those hired for these sales-rep roles must be as intelligent as they are attractive.
"It's a complex business," he says, "and physicians are smart people."
Is it any wonder then that these individuals would want to also seek opportunities to move into more challenging, higher-paid roles after starting as sales reps?
"If the goal is to put attractive people before doctors and try to get their attention and, when they're not as attractive, get rid of them, and if there are more women being hired, then you've got a situation where you're probably going to be looking at more of these lawsuits in the future," says Woodfield.
While Woodfield is not involved in the Merck suit, he says he's read the complaint and "the comments are terrible and the attitudes are terrible and, if they're demonstrated to be true, then I think you'll probably see this [lawsuit] resolved through settlement."
The outcome of these types of cases, says Pruitt, depend on several variables, including the trial judge assigned to the case, the ability to certify the case as a class action, evidence of discrimination and the abilities of both plaintiffs and defense counsel.
Most states don't have prohibitions against hiring, or not hiring, people based on their physical appearance, with the possible exception of the District of Columbia, says Woodfield. And that may provide some comfort at the front end of the employee relationship, but what HR professionals may be failing to realize, says Woodfield, are the downstream ramifications of these hiring decisions.
HR leaders need to think about coming up with an advancement formula where people who qualify regardless of their gender, or regardless of their physical appearance, are going to be promoted based on meritocracy, he says. What it means is that HR has to be proactive and start not just dealing with the complaints as they come in, but looking to see what the root cause of these issues are.
Taking a big-picture look and ensuring that not only hiring, but also promotion practices, are based on merit, is a good starting point, he says.
"If you're dealing with them as they're coming in," he says, "it's kind of like swatting mosquitos."
And the overall workplace environment also factors heavily in these situations, says Pruitt, and a positive environment may even work against such claims ever being filed in the first place.
"Class actions are usually started by a handful of disgruntled employees," he says. "A happy, content employee will not usually embark on a crusade as a named plaintiff."
Consequently, he says, training is crucial and enforcing rules equitably is a must. And a focus on objective criteria is critical when making any talent-management decision.
"Subjective decision-making leads to questions about motive," he says. "Insist on even treatment to all."