Merck Can’t Sink Cert. In $250M Sex Bias Class Action

Posted August 1st, 2018.

As It Appeared On

By RJ Vogt

Law360 (August 1, 2018, 9:36 PM EDT) — A New Jersey federal judge on Tuesday denied Merck & Co. Inc.’s bid to knock down a class certification bid from female former sales representatives in their $250 million gender discrimination suit, scheduling a hearing later this month to discuss the certification and other motions before the court.

The pharmaceutical company and two of its subsidiaries had filed a motion for partial judgment on the pleadings in December, arguing the women’s class certification bid alleged a theory based on Merck policies and procedures that previously went unchallenged in their initial Equal Employment Opportunity Commission charges and operative complaint.

But U.S. District Judge Michael A. Shipp ruled Tuesday that Merck was using a motion for judgment on the pleadings in the wrong way. According to the judge, the company’s Rule 12(c) motion only allows the court to consider the complaint and matters of public record, which means he should refrain from addressing its arguments “that rely on information outside of the pleadings,” such as the plaintiffs’ certification motion.

“Defendants have not cited any case that stands for the proposition that the court may consider arguments an adversary raised in motion papers filed in connection with a separate motion to rule on a 12(c) motion,” Judge Shipp said.

Judge Shipp’s ruling without prejudice gave the defendants “the opportunity to renew an appropriate application.” In another order the same day, the judge announced three of Merck’s other motions — which aimed to strike two of the women’s expert reports plus their bid to correct an exhibit — were administratively terminated pending a one-day hearing on Aug. 17.

That hearing will also determine the fate of the women’s bid for certification on their equal pay claims, the judge said.

Russell Kornblith of Sanford Heisler Sharp LLP, representing the female former employees, told Law360 he and his clients were glad the judge denied Merck’s motion.

“We look forward to the hearing and having the opportunity to present the case and our expert testimony to the court,” Kornblith added.

The proposed class action, initially filed in May 2013 by Kelli Smith, has asserted that Merck and its subsidiaries Merck Sharp & Dohme Corp. and Intervet Inc. cultivated a “boys’ club” atmosphere where women did not receive the same advancement opportunities as men based on stereotypes that men are breadwinners and women should stay home with children.

The company’s female sales representatives are allegedly sexualized, demeaned and ultimately paid less than their male counterparts, according to the plaintiffs’ certification brief. The plaintiffs are seeking to certify a class of female sales representatives employed at Merck and the two subsidiaries from 2010 to 2017.

In seeking certification of a class and collective action, the plaintiffs pointed to four policies that they claim lock in gender-based pay disparities, including narrow limits on annual merit raises and restrictions on off-cycle salary adjustments, which are any raises unrelated to a regular annual merit increase, a promotion or a transfer, according to the plaintiffs’ brief.

“Here, plaintiffs will rely on common evidence to show a ‘pattern or practice’ of intentional discrimination. Merck implemented and maintained policies that it knew and intended would result in women being paid less than men,” the brief stated. “Plaintiffs will present statistical and anecdotal evidence that Merck knew of, and sanctioned, long-standing gender-based pay disparities.”

But Merck in December refuted the allegations that the policies were meant to discriminate against female employees. For example, the company said, “There is no evidence that Merck implemented the merit increase policy to ‘lock-in’ an alleged gender pay disparity or that it has had any such effect.”

In Tuesday’s order, Judge Shipp characterized the plaintiffs’ opposition to Merck’s bid, saying they called Merck’s Rule 12(c) motion for partial judgment on the pleadings a “procedurally improper, roundabout attack” on their class certification motion.

His denial agreed about the procedurally improper part, saying he would “refrain addressing defendants’ substantive arguments … to avoid converting the motion to one for summary judgment.”

A representative for Merck told Law360 on Wednesday that “no decision was made on the merits.”

The plaintiffs are represented by Deborah K. Marcuse, David Sanford, Aimee Krause Stewart, David Tracey, Andrew Melzer, Russell Kornblith and Nicole Wiitala of Sanford Heisler Sharp LLP.

Merck is represented by Michael S. Burkhardt of Morgan Lewis & Bockius LLP.

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

–Additional reporting by Bill Wichert. Editing by Orlando Lorenzo.

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