By Lisa Milam-Perez, J.D.
A federal district court in California has granted final approval to an $8.2 million settlement resolving Equal Pay Act and other claims involving a class of 1,500 female pharmaceutical reps. Following a final fairness hearing, the court signed off on the deal, which provides for a $4.6 million class settlement fund and $3.6 million for attorney and service fees, settlement administration, and other costs. The employer also will retain a consultant to review its employment policies and practices (Wellens v. Sankyo
, February 11, 2016, Orrick, W.).
The plaintiffs alleged that the employer discriminated in pay and promotions; they also asserted claims of pregnancy discrimination and retaliation. In May 2014, the court conditionally certified an Equal Pay Act collective action based on the employees’ claims that pay differentials were the result of a “discriminatory scheme” effectuated through uniform corporate policies that empowered the mostly male sales leadership team to make final pay decisions. The female reps pointed to evidence that while half of the sales reps were female, only one-third of the district managers were female, and the remaining upper-level management positions were almost exclusively male. Further, they cited the “high” number of harassment and discrimination complaints as evidence that the company’s working environment was hostile to women.
In October 2015, the court granted
preliminary approval of the parties’ settlement resolving the claims, and approved a Rule 23 class for settlement purposes along with a collective class for the plaintiffs’ EPA claim.
The $4.6 million fund will be divided into a “core component” of $3.7 million, divided proportionally among the individual class members as backpay based on the number of workweeks they worked during the relevant damages period. An additional $926,200 will be divided proportionally among eligible members who submit timely claim forms to settle the gender, pregnancy, and caregiver discrimination claims related to denial of promotion, and for harassment, retaliation, or emotional distress damages. An independent claim expert will review the claim forms and any accompanying evidence and, based on points allocated, determine each eligible class member’s proportionate share.
In addition to the class settlement fund, the court awarded $3 million in attorneys’ fees and costs, as well as service payments to class representatives ($25,000, plus smaller amounts for those who were deposed or who submitted declarations). The court found the requests reasonable given their time and effort pursuing the litigation, the substantial benefit realized by the class, and the risks they faced in representing the class.
Policies and practices.
Although denying liability or wrongdoing, the employer also agreed to retain an independent HR consultant to review its employment policies and practices, including flexible work arrangements, pregnancy and maternity leave, criteria in promotions and career development, performance management, and breastfeeding accommodations. It will post all district manager positions and review the promotion process, review its mentoring program, develop new processes related to maternity leave and new mothers returning to work, and eliminate the merit increase offset proration for individuals who take medical leaves of absence. The company will disseminate its commitment to EEO policies to all employees upon hire or promotion to management, and to new managers during management training. Training will be required for certain management levels every two years. Finally, senior HR and legal executives will meet semiannually to review compliance and certify to counsel what programmatic changes were actually made.
While three individuals opted out, no class members have objected to any aspect of the settlement, nor to any request in the motion for attorneys’ fees, reimbursement of expenses, and service awards—giving the court further support for its finding that the terms are fair, reasonable, and adequate.