February 6, 1998

Astra Unit to Pay Nearly $10 Million to Settle Sex Harassment Case

By KENNETH N. GILPIN

n an agreement that dwarfs any prior award in a sexual harassment suit, the U.S. subsidiary of a big Swedish drug maker said on Thursday that it would pay nearly $10 million to settle charges brought by the the Equal Employment Opportunity Commission on behalf of former employees of the subsidiary.

In addition to the monetary payment, the subsidiary, Astra U.S.A., based in Westborough, Mass., acknowledged that it allowed a hostile working environment for female employees and apologized.

"Astra is sorry for the instances of sexual harassment that took place under previous management," Astra U.S.A. president and chief executive Ivan R. Rowley said in a statement. "As a company, we are ashamed of the unacceptable behavior that took place. To each person who suffered, I offer our apologies."

The award, which amounts to $9.85 million plus interest, eclipses in size the previous record in a sex harassment case, a $1.3-million settlement agreed to by Management Recruiters International in a suit that was resolved last year.

Jim Lee, regional counsel for the EEOC, said Thursday that of the 120 former female employees of Astra who had been interviewed in the inquiry, about 80 had been identified as able to file claims. But others may not have yet come forward.

The EEOC began its investigation in May 1996, shortly after Business Week magazine reported accusations of sexual harassment had been made at the company, a subsidiary of Astra AB.

Lars Bildman, who was Astra U.S.A.'s president and chief executive for 15 years before being dismissed in June 1996, was accused of replacing mothers and older female employees with beautiful young single women who were pressured into having sex with company executives. Former Astra employees said Bildman demanded that a full work day be followed by evenings of drinking and parties.

EEOC Chairman Paul Igasaki said the commission had found that Bildman and other Astra executives "engaged in a pattern and practice of sexually harassing female sales representatives, including incidents of quid pro quo sexual harassment and creating a hostile work environment." The agency said that "sexual harassment was part of the 'Astra Way,' "

In a federal lawsuit filed in 1996, six former Astra employees contended that executives created "an organized pattern of sexual harassment" in order to "satisfy their personal desires."

The pattern started early.

"At initial training classes, female employees were told that their performance evaluations depend upon their social skills and their socialization with senior management officials," the EEOC said. "The investigation showed that because senior management officials engaged in this behavior, lower management officials, employees, agents and customers followed suit."

Although it has settled with the EEOC, there are still two outstanding sexual harassment lawsuits pending against Astra U.S.A.

Robert Sanders, director of the EEOC office in Boston, said in a telephone interview that the women who filed those suits must choose between becoming a party to the settlement or pursuing their claims independently.

Under the terms of the settlement, Astra, which has instituted training to combat sexual harassment and replaced all of its senior management since the charges were originally filed, will have its policies monitored by an individual who is not an employee for the next two years.

In June 1996, Astra U.S.A. dismissed Bildman and George Rodman, vice president for marketing and sales, after its own investigation of the charges. A third executive, Edward Aarons, director of institutional business, resigned. Two district sales managers, William Reed and Robert Packin, also resigned.

Bildman, who last week plead guilty to filing false federal tax returns in an agreement that will put him in prison for 21 months and pay the government more than $300,000 in back taxes and interest, still faces considerable legal hurdles.

Wednesday, Astra filed a $15 million lawsuit against Bildman, accusing him of spending more than $2.2 million in company money to renovate three of his homes. Part of the money it is seeking in its suit is to recover costs related to the EEOC investigation, Astra said.

Roderick MacLeish Jr., Bildman's lawyer, said his client intended to contest the lawsuit, and would argue the company encouraged big spending among its top executives.