Lawsuit Accuses ICN’s Panic of Harassment

SANTA ANA — A former manager at ICN Pharmaceuticals Inc. filed a lawsuit against the Irvine-based company Tuesday, alleging that its controversial chairman, Milan Panic, repeatedly made unwanted sexual advances toward her.

The lawsuit, filed in Orange County Superior Court, is the third sexual harassment case brought against Panic in less than four years. In it, Mary Martinelli, the drug company’s former director of human resources, claims that Panic requested sex from her even though she consistently refused his advances.

Martinelli charged in the lawsuit that other ICN officials have known since 1992 of Panic’s unwanted advances and haven’t taken measures to stop him, even after other former employees had filed harassment cases.

Martinelli, 36, seeks to recover unspecified lost pay and benefits, in addition to general and punitive damages.

The company, in a statement, denied Martinelli’s allegations and stressed that the company has a long-standing policy against sexual harassment.

It attributed Martinelli’s allegations to what “appears to be another attempt to capitalize at the expense of a high-profile individual and seek rapid financial gain.”

Martinelli’s suit follows by less than seven months ICN’s settlement of a previous sexual harassment case with another former employee, Debra Levy.

Levy alleged that Panic pressured her into having sex and fathered her child before forcing her from her job. The company and Panic denied the sexual harassment charges and Panic denied paternity.

In 1993, the company settled a sexual harassment case brought by former employee Colleen James. She charged that she was fired after she threatened to make trouble over Panic’s advances. Panic denied the charges.

Martinelli maintains in her lawsuit that Panic first began pressing her to have drinks with him in 1989, when he became her direct supervisor.

Later, Martinelli claims, Panic kept putting his hand on her leg during their drive to an airport while on a European business trip. At a London hotel, she alleges, he insisted that she take a room next to his, tried to pull her toward him, and said he wanted to watch her bathe.

That evening, while intoxicated, he forcefully asked for sex, she contends, but she escaped into her room and locked the door.

In 1992, Martinelli claims, she refused to accompany Panic to Spain on a trip involving his new position as prime minister of Yugoslavia--a post he held for less than a year. She says he retaliated by requesting that a letter noting her disloyalty be placed in her personnel file.

Martinelli says that when she complained to David Watt, ICN’s general counsel, and John Giordani, its chief financial officer, both promised that nothing would be put in her file.

In her suit, Martinelli says she complained to Watt and Jack Sholl, ICN’s vice president of human resources, that the company needed to do more to prevent sexual harassment and that she personally felt legally vulnerable because of her job as a human resources manager.

She says that when another female employee filed a complaint with state regulators last May alleging sexual harassment involving Panic, Martinelli was named as one of the defendants because of her position.

The suit also says Watt and Sholl consulted Martinelli last summer, asking whether a woman who had resigned from the company had “dated’ Panic and whether the company should offer the woman money. Martinelli says she recommended that the company not make the offer and take the matter up with Panic.

She also claims in the lawsuit that Panic privately told her last summer that his lawyers wanted him to settle the Levy case because Martinelli had to testify as a witness about his behavior.

Martinelli said Panic’s treatment of her left her ill and depressed and she felt compelled to quit last November after he screamed at her in the hallway regarding her attendance.

In its statement Tuesday, the company said Martinelli was treated well during her employment of more than nine years and was given “outstanding opportunities to advance.”