Wal-Mart Seeks to Get Class Status Overturned

Wal-Mart Stores Inc. asked a federal appeals court Monday to throw out a lower court ruling approving the largest employment class-action lawsuit in history, filed on behalf of as many as 1.5 million women.

The Bentonville, Ark.-based discount retailer urged the appeals court in San Francisco to remove class-action status for the suit, which seeks billions of dollars in back pay for alleged discrimination.

In its 61-page appeal, Wal-Mart argues that U.S. District Judge Martin Jenkins improperly ignored a study by experts for the company that showed no disparity in pay or promotions between men and women in 90% of its 3,400 stores in the U.S.

Wal-Mart is fighting the suit, originally filed by six women who claim the world’s largest retailer pays female employees less than men for the same jobs, passes them over for promotions and retaliates against those who complain.

In June, Jenkins ruled the gender discrimination suit could be broadened to cover potentially all women who had worked at Wal-Mart’s stores in the U.S. since late 1998.

Wal-Mart contends that a class-action trial of such gargantuan scope would be unmanageable, illegal and unfair to the retailer, as well as to some women swept unwittingly into the class-action suit. The company also says that Jenkins’ ruling took away Wal-Mart’s fundamental right to defend itself.

“Wal-Mart is not asking for special rules for special companies,” said Theodore Boutrous Jr., a lawyer in Los Angeles for Wal-Mart. “All companies, large and small, are entitled to the same due process.”

Brad Seligman, an Oakland lawyer representing the Wal-Mart workers, said the company was trying to use its vast size to dodge a legitimate class-action suit.

“Wal-Mart is saying that you can discriminate as much as you want

If the class-action certification is rejected, the case could be broken into several smaller suits, which legal analysts say would give Wal-Mart more leverage in negotiating settlements.

Lawyers for the plaintiffs have until Dec. 29 to file a response. The appeals court is expected to hear oral arguments in the first half of next year.

In its appeal, Wal-Mart says its store managers made employment decisions based on local market conditions, so it would be unfair to judge the company on anything but a store-by-store basis.

If the case goes to trial en masse, Wal-Mart argues, women who have not experienced discrimination would win back pay and possibly punitive damages and female managers who had never engaged in discrimination would be publicly identified as lawbreakers.

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.

Seligman said Wal-Mart was looking for the appellate court to intervene because Jenkins was persuaded by the plaintiffs’ study that found disparities in the company’s behavior on a national, regional and state basis.

“Those findings bind the court of appeal unless they are clearly wrong,” Seligman said. “It’s a very high standard.”

Wal-Mart shares fell $2.17 on Monday because of disappointing holiday sales, closing at $53.15 on the New York Stock Exchange.