Court Approves Wal-Mart Discrimination Suit Class

June 22, 2004 ( - A San Francisco federal judge has given the green light to a gender discrimination lawsuit against the giant retailer Wal-Mart proceeding as a class action.

The decision by U.S District Judge Martin Jenkins to give the suit class-action status means that it could potentially apply to as many as 1.6 million current and former female employees working for the company since December 1998 -the largest civil rights suit against a U.S. private employer, the Wall Street Journal reported. The suit alleges that Wal-Mart systematically denied women equal pay and promotion opportunities.

HR officials have closely watched the legal developments against Wal-Mart because, with 1.3 million workers, it is the largest private U.S. employer.

Despite Wal-Mart arguments that most hiring and promotion decisions are made locally at the store level, Jenkins ruled that plaintiffs had shown there were common hiring and pay practices throughout the company raising the “inference that Wal-Mart engages in discriminatory practices in compensation and promotion that affect all plaintiffs in a common manner.”

The plaintiffs claim numbers prove their point: About two-thirds of Wal-Mart’s hourly employees are women, though they make up only a little more than a third of all its salaried managers. Just 14% of the top managers at its 3,000 stores are female. The plaintiffs, women from several states who mostly held hourly jobs, also contend that women earn 5% to 15% less than their male counterparts in the same jobs, differences that can’t be explained by seniority or performance reviews.

Jenkins rejected the retailer’s argument that the enormous class size made the case too unwieldy. He also ruled that plaintiffs can pursue an award of punitive damages in addition to back pay for wage differences and lost earnings to those who were actually denied promotions.

Joseph Sellers, co-counsel for the plaintiffs, called the ruling “a terrific recognition of the plight of women at Wal-Mart.” “It is an unprecedented opportunity to pursue their claims together,” he said.

Wal-Mart, however, noted that the certification is just a first step and the case has a long way to go. “Let’s keep in mind that today’s ruling has absolutely nothing to do with the merits of the case,” Wal-Mart spokeswoman Mona Williams, told the Journal. “Judge Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action. We strongly disagree with his decision and will appeal.”

The world’s largest retailer is facing a host of labor-related problems and has become a target of unions and activists, who portray it as a penny-pinching corporate giant that puts profits ahead of workers. More than 30 lawsuits filed against Wal-Mart allege it failed to pay workers overtime, and a federal grand jury is investigating whether the company knowingly used contractors who hired illegal immigrants to clean its stores.