Merck Can’t Dodge $250M Sex Bias Class

Posted October 8th, 2014.

As It Appeared On

By Joshua Alston

Law360, New York (October 08, 2014, 5:42 PM ET) — Merck & Co. Inc. on Wednesday lost its bid to dodge a $250 million gender bias class action filed by five female sales representatives who say Merck froze women out of hiring and advancement opportunities, after a New Jersey federal judge ruled Merck’s motion to dismiss class claims was premature.

U.S. District Judge Joel A. Pisano on Wednesday sided with five current and former female Merck employees who filed suit against the pharmaceutical giant, alleging it cultivated a “boys club” environment in which women were offered limited opportunities to advance due to stereotypes about men being breadwinners and women staying home with the children.

Merck filed its motion to dismiss the class action in February, arguing the allegations in the suit are focused on discretionary decisions made by individual managers rather than decisions made by a centralized management team, and don’t constitute a common question that can support a class claim.

Judge Pisano disagreed, saying Merck errantly applied 2011’s Wal-Mart v. Dukes decision, a decision in which class claims were dismissed at the pleading stage because the class lacked a common question. That case was different, the judge said, because there was adequate evidence available to evaluate the claim following years of discovery.

“The procedural posture of Wal-Mart is particularly instructive here, as defendant’s reliance on the case is misplaced,” the decision said. “Particularly, the parties in Wal-Mart engaged in extensive discovery, the court reviewed thousands of documents and exhibits in connection with the class claims, conducted a hearing, and ruled on the certification motion three full years after the complaint was filed. Such is not the case here.”

Merck filed its motion to dismiss only a month after the plaintiffs filed an amended complaint, long before there was enough discovery with which to evaluate the class claims.

“Defendant’s motion is simply premature and of the type that the Third Circuit has specifically cautioned against granting,” the ruling said.

Andrew Melzer of Sanford Heisler LLP, an attorney for the plaintiffs, told Law360 on Wednesday the decision is the latest in a string of cases he’s seen in which defendants have unsuccessfully used the Wal-Mart decision to try to dismiss class claims at the pleading stage.

“Defendants have tried this tactic repeatedly but it’s been pretty consistently denied by the court,” said Melzer, referring to such filings as “jump-the-gun motions.”

“Only in very unusual cases are motions at this stage granted, so it’s almost a pointless filler motion unless there are very unusual circumstances,” Melzer said. “We have a comprehensive and detailed complaint about centralized decision-making, and this kind of motion prior to any discovery is premature.”

A Merck spokeswoman said in an email the company will continue to fight the allegations.

“We are disappointed in the court’s decision, but remain confident that this case lacks merit,” the statement said. “Merck will continue to vigorously defend itself, and remains fully committed to providing equal employment opportunities for all employees. Merck has a strong antidiscrimination policy that prohibits discrimination on the basis of characteristics, such as gender, pregnancy, race, age, disability and sexual orientation.”

Plaintiff Kelli Smith filed a $100 million suit in May 2013, then amended the suit in January, adding Kandice Bross, Rachel Mountis, Amy Shursky and Kate Whitmer, raising the value of the claim to $250 million. The plaintiffs hail from Merck’s satellite offices, representing various Pennsylvania, California and New Jersey offices.

The lawsuit alleged that Merck’s sales incentive plan provides that managers’ and directors’ pay gets decreased when employees take legally protected leave, which discourages hiring and promotion of women because of the fear that they would take maternity leave.

Smith, identified in her complaint as a current Merck senior sales representative who has worked for the company since 2004, said she was demoted because she took maternity leave.

“Merck managers are openly hostile to pregnant women and women with children, telling female sales representatives that they ‘can’t be both a mother and a senior representative,’” the lawsuit said.

The plaintiffs are represented by David Sanford, Kate Mueting, Deborah Marcuse, Andrew Melzer and Jennifer Siegel of Sanford Heisler LLP.

Merck is represented by Michael Burkhardt and Blair Robinson of Morgan Lewis & Bockius LLP.

The case is Kelli Smith, et al., v. Merck & Co. Inc, case number 3:13-cv-02970 in the U.S. District Court for the District of New Jersey.

–Editing by Emily Kokoll.

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