Merck Workers Defend Class Claims In $250M Sex Bias Suit

Posted September 18th, 2018.

As It Appeared On

By Danielle Nichole Smith

Law360 (September 18, 2018, 10:23 PM EDT) — Women who used to work for Merck & Co. Inc. told a New Jersey federal judge on Monday that the company’s attempt to defeat their class claims in a sex bias suit seeking $250 million rested on a “hair-splitting house of cards,” arguing that the initial U.S. Equal Employment Opportunity Commission charge backed their certification motion.

The former sales representatives said in their opposition that the theories in their pending motion for class certification stemmed from the allegations filed in lead plaintiff Kelli Smith’s October 2011 EEOC charge, disputing the pharmaceutical company’s assertion that they had failed to exhaust their administrative remedies on the claims of disparate impact and disparate treatment. The principle of exhaustion is applied liberally, the sales representatives argued, which is consistent with the remedial purposes of Title VII.

“The standard that Merck demands this court impose — requiring claimants to elucidate the basis for certification in fine-grained detail before any discovery is taken — would cabin the EEOC’s enforcement authority and narrow its mandate,” the sales representatives said. “It would also all but end Title VII class actions.”

Merck had argued in an August motion for partial summary judgment that the sales representatives brought up for the first time in their motion for certification Merck’s alleged use of four policies and practices that had not been identified in any EEOC charges. Merck said the charges didn’t point to any policies that were neutral on their face but affected women differently to support the sales representatives’ disparate impact claim, nor did they make reference to any of the four alleged policies or practices.

The sales representatives also failed to administratively exhaust their disparate treatment claim, because there was nothing in the charges that would lead the EEOC to investigate whether the four alleged policies and practices were used by Merck with the intention of discriminating against women, the pharmaceutical company said.

Merck said that because the sales representatives didn’t exhaust their administrative remedies for the disparate impact and disparate treatment claims, they lack standing to pursue them.

But the sales representatives fired back Monday, asserting that both claims were clearly raised in Smith’s EEOC charge. Smith’s allegations concerning the company’s use of pay grades known as S-tiers supported the disparate impact claim, and allegations that the proposed class was subjected to a “pattern” and “practice” of pay discrimination backed the disparate treatment claim, the sales representatives said.

The sales representatives said the courts had never required plaintiffs to present their class certification theories in their EEOC charges and that their claims “easily pass muster under established law applying the liberal exhaustion standard.” Requiring plaintiffs to precisely identify the policies they challenge before discovery would be a “novel impediment” to class relief, the sales representatives said, noting that ordinary employees often didn’t have knowledge about the corporate policies that warranted class treatment.

Further, Merck had forfeited its right to the exhaustion argument by waiting five years to assert that the proposed class’ claims didn’t match the EEOC charge, the sales representatives alternatively argued. And the proposed class had standing for its claims regardless of whether the certification motion matched the charges because they had been injured by Merck’s alleged actions, the sales representatives said.

“Merck’s exhaustion defense is premised on the argument that plaintiffs’ class certification theories diverge from their EEOC charges and that plaintiffs are limited to the class facts enumerated in the charges,” the sales representatives said. “But Merck has litigated this case for years in a manner inconsistent with this defense only to turn around and assert the defense at the class certification stage.”

The female sales representatives originally sued Merck in May 2013, alleging that the company fostered a “boys club” atmosphere that favored the advancement of male employees. The proposed class sought at least $250 million in damages in its second amended complaint, and in September 2017 it moved for certification, saying the female sales representatives were “sexualized, demeaned, and ultimately paid less” than their male counterparts.

Merck fought the class claims in a motion for judgment on the pleadings, which raised the same arguments presented in its motion for partial summary judgment. But the court denied the motion in July, finding that the failure to administratively exhaust arguments weren’t proper for a judgment on the pleadings motion. The judge said in a footnote that the arguments “appear compelling, but will only be addressed in the context of an appropriate procedural vehicle.”

Claire Gillespie, a spokesperson for Merck, told Law360 in a statement Tuesday that it was in light of the judge’s July order that the company filed the motion for partial summary judgment with the same arguments. She added that the company is confident that the suit lacks merit and will continue to “vigorously defend itself.”

“Merck remains fully committed to providing equal employment opportunities and has a strong anti-discrimination policy that prohibits discrimination on the basis of characteristics, such as gender, pregnancy, race, age, disability and sexual orientation,” Gillespie said.

Counsel for the proposed class didn’t respond Tuesday to requests for comment.

The proposed class is represented by David Tracey, Andrew Melzer, Russell Kornblith, Nicole Wiitala, David Sanford, Deborah K. Marcuse and Aimee Krauss Stewart 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 RJ Vogt and Bill Wichert. Editing by Haylee Pearl.

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