January 31, 2011

Pfizer Agrees to Create Ombuds Program for Employees

In December 2010, the world's largest pharmaceutical company agreed to settle a shareholder lawsuit arising out of allegation of the illegal marketing of at least 13 of Pfizer's most important drugs. In addition to governance changes in financial considerations, the proposed settlement also provides for, "the establishment of an Ombudsman Program as an alternative channel to address employee concerns about legal or regulatory issues."

The settlement proposal filed by plaintiff's counsel explains:
3. Creation of Ombudsman Program to Hear and Understand Work-Related Concerns
The proposed settlement requires Defendants to create an ombudsman program, under the direction of Pfizer’s Chief Compliance Officer, that will be a neutral party and will provide Pfizer employees with an alternative channel to voice work-related concerns, including, for example, pressure from supervisors to engage in improper promotional activities. [Citation omitted.]
The creation of an impartial ombudsman benefits Pfizer by addressing Plaintiffs’ allegations about retaliation at Pfizer. Moreover, an Ombudsman will be in a position to detect a pattern of retaliation in specific sales districts or regions (if any such patterns exist), and inform the Chief Compliance Officer and Regulatory Committee of such patterns to allow the Company to undertake appropriate action.

The lead attorney for the plaintiffs, Max Berger, said that the inclusion of the Ombuds program says something about his view of the of the whistleblower protections provided by the Dodd-Frank Act. The settlement proposal comes before the Federal District Court for the Southern District of New York for final approval on March 7, 2011. (The D&O Diary; Bernstein Litowitz Case Summary.)

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