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Wal-Mart Must Face Huge Sex-Bias Suit

Case is given class-action status. The ruling could spur mass complaints against other U.S. firms.

June 23, 2004|Lisa Girion and Abigail Goldman | Times Staff Writers

A federal judge said Tuesday that he would allow a gender discrimination lawsuit to proceed against Wal-Mart Stores Inc. on behalf of more than 1.5 million women who have worked for the retailing giant, expanding a case that could encourage similar mass class-action suits against U.S. employers.

The lawsuit, originally filed by six women, alleges that the world's largest company pays female employees less than men for the same jobs, passes them over for promotions and retaliates against those who complain. A study of Wal-Mart payroll data by the plaintiffs last year showed women at the retailer earned an average of 5% less than male counterparts with inferior education, experience and performance reviews.

The ruling by U.S. District Judge Martin J. Jenkins in San Francisco broadens the suit to cover potentially all women who have worked at Wal-Mart's stores in the United States since late 1998.

"Until this ruling, this was a case about six women and the only impact it would have was on those six women," said Brad Seligman, the Oakland lawyer leading a team of attorneys from seven firms representing the plaintiffs. "The judge's ruling means any decision by the jury in this case will cover all the members of this class. The damages and injunctive relief will apply across America."

Bentonville, Ark.-based Wal-Mart said it would appeal the ruling.

Lawyers said the suit, which dwarfs any class action ever assembled in a civil-rights employment case, had the potential to change the legal landscape for large companies.

"It's obviously a precedent," said Stephen Gillers, a professor of law at New York University. "It says, 'No matter how big you are, you can still be the target of a class action.' "

At the same time, lawyers noted that workers will need more than payroll data showing disparities in wages for men and women to establish grounds for a broad class-action case. In addition to detailed payroll analyses, the Wal-Mart plaintiffs compiled more than 1 million pages of documents, including depositions of Wal-Mart executives, internal corporate memos and government-reported employment demographics of similar retailers.

The case pits the plaintiffs against an extremely high-profile defendant. Wal-Mart, which last year posted revenue of $256 billion, operates almost 3,600 stores that employ more than 1.2 million workers in the United States.

Wal-Mart has consistently denied condoning a pattern or policy of bias, blaming any missteps on wayward individual managers.

Jenkins' ruling "has absolutely nothing to do with the merits of the case," Wal-Mart spokeswoman Mona Williams said in a statement. "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."

Wal-Mart had argued that the number of potential plaintiffs made it impossible to try the case as a class action, which sweeps into the lawsuit women who aren't directly named as long as they worked for Wal-Mart at any time since Dec. 26, 1998.

In his 84-page ruling, Jenkins acknowledged that the number of plaintiffs raised concerns about how he would manage the case. But, the judge wrote, the 1964 Civil Rights Act forbids discrimination in the workplace and makes no exception for large employers.

"Insulating our largest employers from allegations that they have engaged in a pattern and practice of gender or racial discrimination -- simply because they are large -- would seriously undermine these imperatives," Jenkins wrote.

The suit seeks unspecified back pay and lost wages for all women employed by Wal-Mart -- from front-door greeters to executives -- during the period covered by the suit. It also demands punitive damages and asks the court to impose changes on the way Wal-Mart trains and communicates with employees, gives raises and decides whom to promote.

Based on settlements in other gender discrimination suits, the case could cost Wal-Mart billions. In 1997, Home Depot Inc. settled a bias case with 25,000 women for $104 million -- or $4,160 a person.

The suit against Wal-Mart is the latest blow for the retailer on the employment front. The company faces several lawsuits claiming the company cheated workers out of overtime pay and is the target of a federal grand jury investigation examining the company's use of janitorial subcontractors that employed illegal immigrants.

The plaintiffs accuse Wal-Mart of a variety of sexist treatment, including a male store manager who told a female colleague that men "are here to make a career and women aren't. Retail is for housewives who just need to earn extra money." In another allegation cited by Jenkins, a male store manager allegedly told a woman who had sought a transfer to hardware: "We need you in toys ... you're a girl, why do you want to be in hardware?"

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