By Jon Hood
ConsumerAffairs.com
August 29, 2010
Wal-Mart has asked the U.S. Supreme Court to weigh in on a lawsuit contending that the retailer discriminates against female employees, The New York Times reported this week.
The suit, pending in federal court in San Francisco, alleges that female Wal-Mart employees are paid less, given smaller raises, and promoted less often than their male counterparts. If found liable, Wal-Mart could be on the hook for at least $1 billion.
The suit has been winding its way through the courts since it was first filed in 2001. In April, the Ninth Circuit Court of Appeals narrowly certified the case as a class action, ruling that just because over 1 million employees are potentially involved doesn't necessarily render [the] case unmanageable.
Wal-Mart sought to paint the court's decision as relying on technicalities.
"It is important to remember that the Ninth Circuits opinion dealt only with class certification, not with the merits of the lawsuit," the company said in a statement, contending that "the Ninth Circuits opinion contradicts numerous decisions of other appellate courts and even the Supreme Court itself."
Wal-Mart's appeal is based on the contention that the case is unsuitable for class treatment, since each employee's claim will necessarily involve individual factual issues that can't be applied to the case as a whole.
That argument echoes Judge Sandra Ikuta's dissent in the Ninth Circuit decision.
Never before has such a low bar been set for certifying such a gargantuan class, Judge Ikuta wrote, adding that the plaintiffs' allegations were based on general and conclusory allegations, a handful of anecdotes and statistical disparities that bear little relation to the alleged discriminatory decisions.
Attorneys for the plaintiffs cite as evidence data showing that women account for two-thirds of Wal-Mart employees, but only a third of its management.
Brad Seligman, an attorney for the plaintiffs, told the Times that class certification was entirely appropriate, even given the class's enormity.
The ruling upholding the class in this case is well within the mainstream that courts at all levels have recognized for decades, Seligman said. Only the size of the case is unusual, and that is a product of Wal-Marts size and the breadth of the discrimination we documented.
Company was warned
In a separate article, the Times reported that Wal-Mart was warned of potential liability a full six years before the lawsuit was filed. In 1995, lawyers for the firm Akin Gump reported that salaried male employees earned 19 percent more than females, and that men were five times more likely than women to be promoted into management jobs.
Paradoxically, Wal-Mart has been careful to avoid the appearance of discrimination in other areas. In 2003, the company announced that it was implementing policies designed to prohibit discrimination against gay and lesbian employees.
In any event, Wal-Mart is vigorously defending its workplace policies.
Wal-Mart is an excellent place for women to work and has been recognized as a leader in fostering the advancement and success of women in the workplace, the company said in a statement.
Assuming that the Supreme Court agrees to hear the case, its ruling is likely to either open the floodgates for future jumbo class actions, or effectively shut the door on them.
This is the big one that will set the standards for all other class actions, Robin S. Conrad, executive vice president of the National Chamber Litigation Center, told the Times. Conrad's organization is part of the U.S. Chamber of Commerce and has filed amicus briefs in support of Wal-Mart's position.
