Wal-Mart left more than its heart in San Francisco today. It’s reputation as a global retailer also may be left in a federal courtroom as a judge has approved a “class action” sex discrimination lawsuit against the Arkansas giant. This case could prove to pack a wallop in the pocketbook for Wal-Mart, as it has been warning its stockholders for nearly three years. Class action certification means the women plaintiffs in this case could number well over a million present and former female “associates” at Wal-Mart. The suit charges that Wal-Mart pays its female workers less than their male counterparts for comparable jobs and bypasses women for key promotions. The company was hoping that this case would never reach class action status, forcing plaintiffs to take their cases one at a time. A Wal-Mart spokeswoman said company will appeal the ruling. U.S. District Judge Martin Jenkins began deliberating this case nine months ago. According to the Associated Press, class action status “gives lawyers for the women tremendous leverage as they pursue punitive damages, back pay and other compensation.” The case, Dukes v Wal-Mart, was brought by Betty Dukes, who says she was paid just $8.44 per hour during her first nine years working at a variety of positions at Wal-Mart’s store in Pittsburg, Calif., while several men holding similar jobs but less seniority earned $9 per hour. In a hearing last September, Wal-Mart tried to argue that its stores are all autonomous, like independent businesses, with different management styles that affect the way women are paid and promoted. But the women plaintiffs argued that Wal-Mart stores are “virtually identical in structure and job duties”. “There is a high emphasis on a common culture, which is the glue that holds the company together,” the plaintiff’s lawyer told the AP. The judge found that “women working at Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time, that women take longer to enter management positions, and that the higher one looks in the organization the lower the percentage of women.” Wal-Mart admitted that the company was examining its employment practices. “Earlier this month Wal-Mart announced a new job classification and pay structure for hourly associates,” the company said. “This new pay plan was developed with the assistance of third-party consultants and is designed to ensure internal equity and external competitiveness.” But the company’s actions appear to be too little, too late. “Let’s keep in mind that today’s ruling has absolutely nothing to do with the merits of the case,” Wal-Mart said in a press release today. “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 seek an appeal. While we cannot comment on the specifics of the litigation, we can say we continue to evaluate our employment practices. For example, earlier this month Wal-Mart announced a new job classification and pay structure for hourly associates. This new pay plan was developed with the assistance of third party consultants and is designed to ensure internal equity and external competitiveness.”
It appears that if Wal-Mart is ever going to achieve “internal equity” among its workforce, it’s going to happen in a federal courtroom. Today’s ruling is a major setback for Wal-Mart, and guarantees that the company’s employment practices are going to be the subject of ongoing scrutiny by the public — something this company tries very hard to keep concealed. Although its spends $2 million a day on advertising, the image Wal-Mart portrays in TV ads, versus the testimony that will come out in this case, will force the retailer’s media machine to lock on its spin cycle. Giant Home Depot went through a similar sex discrimination class action suit in the late 1990s, and paid out over $100 million in that case. This Wal-Mart class action sex discrimination suit could make that Home Depot case look like a Mom and Pop dispute. The Dukes case is likely to cost Wal-Mart far more than any sexual discrimination case filed against a retailer, proving yet again that the bigger they come, the harder they fall. For earlier stories on this matter, search this database by the words “sex discrimination.”
