January 26, 2012 (PLANSPONSOR.com) – A federal court dismissed a claim that Wal-Mart Stores breached its fiduciary duties in underpaying retirement plan contributions based on wages that were discriminatory against women.
The U.S. District Court for the Northern District of California said that because Diana Alexander-Jones’ allegations are entirely dependent on a finding of discrimination and related denial of contributions that has not yet, and might never, happen, the case is not ripe.
In the footsteps of Dukes v Wal-Mart, which alleges widespread gender discrimination at Wal-Mart stores, Alexander-Jones filed suit alleging that “the amounts Wal-Mart contributed [to the Plan] were materially less than what was truly owed to Plan participants, because Wal-Mart calculated its Company contributions based on base wages that were suppressed due to the Company’s rampant gender discrimination.”
According to the court’s opinion, the complaint explicitly references the Dukes v. Wal-Mart case, stating that “[c]urrently, female workers at Wal-Mart and Sam’s Club are pursuing a class action lawsuit in this Court… that charges that Wal-Mart discriminates against female employees nationwide. . . .” It adds that “[o]n June 24, 2004, this Court certified a national class of female employees who worked for the retail stores since December 26, 1998,” and that “[o]n April 26, 2010, the Ninth Circuit Court of Appeals largely affirmed the district court’s class certification ruling.”
Alexander-Jones argued that the losses to retirement plan accounts have already occurred, and that her “ERISA claims do not require prior judicial resolution of [her] discrimination claims in order to be considered ripe.”
The district court disagreed, noting that Alexander-Jones brings no Title VII claims in the present case, nor is she a plaintiff or a class member in any other cases alleging Title VII claims. Although she was a class member in Dukes, that case has been reconfigured and is now only being pursued on behalf of female employees employed in California (see Dukes v. Wal-Mart CA Plaintiffs Refile Bias Case). Alexander-Jones lives in Pennsylvania, and is no longer a class member in Dukes.
Even if Alexander-Jones filed a lawsuit with discrimination claims, the court said, that is only a first step. The court said her ERISA claims depend upon a specific determination that her wages were suppressed, and only once that happens and Alexander-Jones is awarded lost wages, are the plan’s fiduciaries obligated to make specific contributions to the plan on her behalf.
Under the plan, employer contributions are to be allocated based on compensation actually paid, not compensation “earned” or “owed,” the court stated.
The opinion in Alexander-Jones v. Wal-Mart Stores, Inc. et al., No. C 10-03005 CRB is here.