Forest Labs hit with $100 mln gender bias lawsuit

Posted July 5th, 2012.

As it appeared in Reuters

By Jonathan Stempel

July 5 Forest Laboratories Inc was sued for at least $100 million by four former sales representatives who accused the New York-based drugmaker of discriminating against women, including those who become pregnant or care for young children.

Thursday’s complaint seeks class-action status, and compensatory and punitive damages for about 1,500 current and former female sales representatives at Forest since 2008.

The complaint comes as Forest’s management faces growing criticism from billionaire investor Carl Icahn, its second-largest shareholder, over governance practices and succession planning.

The plaintiffs’ law firm provided a copy of the complaint, which is to be filed with the U.S. District Court in Manhattan.

Forest spokesman Frank Murdolo did not immediately respond to a request for comment.

According to the complaint, Megan Barrett, Lindsey Houser, Jennifer Jones and Jennifer Seard said Forest deprived women of the same pay, bonuses and promotions that men receive.

The women, who said they had left Forest in 2010 or 2011, also claimed the company lowered internal rankings for women who take maternity leave, and frowned upon job-share positions to allow workers to provide care to their children.

Barrett, for example, said her “President’s Club” ranking, which rates workers by how well they meet sales quotas, had fallen precipitously after each of two maternity leaves.

Seard, meanwhile, said her desire for a job share so she could care for her epileptic son had led a regional sales manager to conclude she was “unmotivated” to work.

“Gender discrimination is Forest’s standard operating procedure rather than a sporadic occurrence,” the complaint said.

Barrett lives in Pennsylvania, and the other plaintiffs live in Texas, according to the complaint.

Their law firm, Sanford Wittels & Heisler, won settlements of $175 million in 2010 and $99 million in 2012 against Swiss drugmaker Novartis AG in separate cases involving sales representatives.

Icahn, who has a 9.92 percent stake in Forest, has nominated four directors in his second proxy fight against the company in as many years. Last week, he sued in Delaware Chancery Court for more information about Forest’s management and succession plans.

Forest posted net income of $979.1 million on revenue of $4.59 billion for the year ended March 31. Its top-selling drug, the antidepressant Lexapro, lost patent protection in March.

The case is Barrett et al v. Forest Laboratories Inc et al, U.S. District Court, Southern District of New York.

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