A putative class action claims Merck & Co.’s compensation policies create incentives to discriminate against women sales representatives.
In particular, the pay formula decreases salaries of colleagues and managers of women who take maternity leave, according to the suit, Smith v. Merck & Co. Inc., filed Thursday in federal court in Newark.
The suit alleges that the formula ties representatives’ compensation to the success of others selling the same product, and fails to adjust sales goals to account for representatives on pregnancy leave.
Consequently, managers are discouraged from hiring and promoting women, the suit says.
Plaintiff Kelli Smith, a Merck sales representative in Toms River since 2004, says she was demoted, received lower performance evaluations and was subject to a hostile work environment after returning from maternity leave in March 2010.
Her boss, Ed Veltre, refused to sign documents approving her maternity leave so she had to try to contact him repeatedly while in the hospital after childbirth, the suit says. Upon her return from maternity leave, her performance rankings plummeted, prompting her to complain to Veltre’s boss, John Daly, who admitted that her rankings were due to "the timing of [her] baby," the suit says.
Smith complained several times to the company ombudsman’s office and human resources department about discrimination but no action was taken, she claims.
Daly allegedly said her complaints were "inappropriate" and undermined Veltre. Veltre also allegedly excluded Smith from department emails and text messages and failed to answer her phone calls.
The suit claims the company violates the Civil Rights Act of 1964, the Family and Medical Leave Act and the New Jersey Law Against Discrimination.
It seeks an order requiring programs that remedy the effects of its policies and that come up with ways to assign, compensate and promote women in a nondiscriminatory manner.
In addition, it seeks an adjustment of pay for the class representative and class members to the level they would have been if not for the allegedly discriminatory policies.
The suit is asking for compensatory and punitive damages, as well as attorney fees and costs.
"Merck creates a hostile environment where female and pregnant employees are harassed and marginalized," says Deborah Marcuse, an attorney with the firm of Sanford Heisler in Washington, D.C., which filed the case.
In a statement, Merck spokeswoman Lainie Keller said, "this case lacks merit, and the company will vigorously defend itself.
"Merck has a strong anti-discrimination policy that prohibits discrimination on the basis of characteristics, such as gender, race, age, disability and sexual orientation.
"The company provides multiple avenues for employees to raise concerns and to ensure that those concerns are addressed. The company also maintains a nonretaliation policy that prohibits any form of retaliation against an employee because he/she brought forward a complaint.
"Merck is fully committed to providing equal employment opportunities for all employees. We proudly support working parents as evidenced by our policies that include paid parental leave, six-month job protected child-care leave, flexible work arrangements, and on-site daycare options at many of our sites.
"In addition, we offer free resource and referral services that provide assistance in child care, parenting, adoption, college consulting and self-health, among other services," according to the statement.
It also said Merck has been ranked by Working Mother magazine as one of the top 100 companies for working mothers for the past seven years and listed for the past two years among the top 50 companies for executive women by the National Association for Female Executives.
Sanford Heisler has handled a series of gender discrimination suits against drug companies in recent years.
In one such case, it won a $250 million verdict in the Southern District of New York in May 2010 against Novartis Pharmaceuticals, Velez v. Novartis Pharmaceuticals Corp., 04-cv-9194. The case settled six months later for $175 million.
Sanford Heisler also has suits pending against two other drug companies, Daiichi Sankyo of Parsippany and Bayer Healthcare Pharmaceuticals of Wayne. •