Wal-Mart loses job-bias appeal
Wal-Mart Stores Inc. must face the largest workplace class-action lawsuit in U.S. history and defend itself against claims that it discriminated against thousands of women employees, a federal appeals court in San Francisco ruled Tuesday.
The company said it would appeal the decision of the three-judge panel, which ruled 2 to 1 in favor of the plaintiffs.
The U.S. 9th Circuit Court of Appeals rejected Wal-Mart’s claim that a class of more than 1.5 million employees -- all of Wal-Mart’s women workers since 1998 -- would be unmanageable.
If the women prevail, Wal-Mart could be vulnerable to billions of dollars in damages.
“No amount of PR, of spin, of procedural dodges can avoid the day in court that is coming,” said Brad Seligman, an Oakland lawyer serving as lead counsel for the plaintiffs. “It is time for Wal-Mart to face the music.”
The ruling upholds a 2004 decision by U.S. District Judge Martin Jenkins in San Francisco certifying that six named plaintiffs, who claim that Wal-Mart favors men in pay and promotions, could represent all of the company’s women workers.
“Plaintiffs’ expert opinions, factual evidence, statistical evidence and anecdotal evidence present significant proof of a corporate policy of discrimination,” wrote Judge Harry Pregerson on behalf of the majority, “and support plaintiffs’ contention that female employees nationwide were subjected to a common pattern and practice of discrimination.”
Judge Michael Daly Hawkins also voted in favor of the plaintiffs. Judge Andrew J. Kleinfeld dissented, criticizing the way the class was structured.
Although Tuesday’s decision was a win for the plaintiffs, it was mostly a procedural issue. The courts have not ruled on the allegations outlined in the original suit, which was halted during Wal-Mart’s appeal of the class certification.
Legal experts said class certification could be the most important issue in the case.
“In major class-action litigation, the whole nut turns on whether you get class certification upheld,” said Chris Cameron, a labor law expert and associate dean at Southwestern Law School in Los Angeles. “Nobody tries those cases. It would be too long, too complicated and too expensive to do it. Economically speaking, it’s more feasible to sit down and negotiate a settlement.”
Wal-Mart, however, said it had strong grounds for arguing against class-action status.
The Bentonville, Ark.-based company is appealing Tuesday’s ruling for rehearing by the three-judge panel as well as by a larger panel of judges in the 9th Circuit, known as an en banc panel.
The 9th Circuit, which hears federal appeals in nine Western states, including California, is considered the most liberal of the federal appellate courts.
“On each of the key issues we have raised in the case, the 9th Circuit decision contradicts many recent ones from around the country as well as Supreme Court authority,” said Wal-Mart attorney Theodore J. Boutrous Jr. of Gibson, Dunn & Crutcher in Los Angeles. “These are important issues that we think will warrant attention from the en banc court and the Supreme Court.”
Led by Betty Dukes, who works at Wal-Mart’s Pittsburg, Calif., store, the plaintiffs contend that Wal-Mart discriminated against women workers by, among other things, relying heavily on lower-level store managers’ subjective decisions about raises and promotions. They also say the company failed to implement a meaningful job-posting system for management slots.
Wal-Mart has suffered a blistering attack from labor unions and other activists, who have cited pay disparities, discrimination and lack of healthcare benefits as among their principal complaints.
Since the Dukes case was filed, Wal-Mart has established an advisory panel on equal employment opportunity, appointed a “chief diversity officer” and touted a $4 generic prescription drug program.
The company said Tuesday that it planned to unveil a “major healthcare campaign” today.