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Wal-Mart sex-bias suit could be landmark case

Wal-Mart Stores Inc will urge the Supreme Court next week to reject the largest class-action sex-discrimination lawsuit in history, brought by female employees who seek billions of dollars.
/ Source: Reuters

Wal-Mart Stores will urge the Supreme Court next week to reject the largest class-action sex-discrimination lawsuit in history, brought by female employees who seek billions of dollars.

The top U.S. court hears arguments on March 29 in a lawsuit against the world's largest retailer for allegedly giving women less pay and fewer promotions at 3,400 U.S. stores since late 1998.

Lawyers for the two sides will spar over whether the small group of women who began the lawsuit 10 years ago can represent a huge nationwide class of current and former employees that could total millions of women.

The case has pitted women's and employees' rights against business interests, with Robin Conrad of the U.S. Chamber of Commerce calling it "the most important class-action case facing the court in over a decade."

The case will have far-reaching implications for working women who challenge discrimination, women's rights advocate Marcia Greenberger of the National Women's Law Center said.

"The ability of women to be treated fairly in the workplace hangs in the balance," Greenberger said.

The ruling, expected by late June, could change the legal landscape for workplace class-action lawsuits and affect many cases, including a similar one against Costco Wholesale Corp.

Large class-action lawsuits make it easier for big groups of plaintiffs to sue corporations and they have yielded huge payouts by tobacco, oil and food companies.

Companies have sought to limit such lawsuits to individual or small groups of plaintiffs.

The Supreme Court, with a conservative majority that has often ruled for businesses, has already limited large class-action securities fraud lawsuits and asbestos cases.

If Wal-Mart wins, the huge class would be undone, though the company still could face individual discrimination lawsuits. If the workers win, they would be able to pursue their lawsuit as a collective group at trial.

Legal experts and financial analysts said Wal-Mart, with more than $400 billion in sales and $16 billion in net income last year, has enough cash to make even a big payout if it loses at trial.

"It would take a seismic ruling against the company to have an impact on the valuation," said R.J. Hottovy, equity analyst at the Chicago-based Morningstar Inc investment research firm.

Strip clubs
The Wal-Mart lawsuit has produced testimony that managers held business meetings at Hooters restaurants, attended strip clubs and referred to female employees as "girls," in what plaintiffs lawyers said was a corporate culture rife with stereotypes demeaning to women.

Wal-Mart, founded in 1962 and based in Bentonville, Arkansas, has denied the allegations and said it has operated under a policy barring discrimination.

The discount retailer said the claims involving current and former female workers, hourly employees and salaried managers, and stores across the country are too different to proceed as a single class-action lawsuit.

Lawyer Theodore Boutrous, who will argue for Wal-Mart, said bundling together all the diverse claims is unfair, making it impossible for the company to defend itself.

"Class actions can be helpful for efficiency, and there's an attraction to that. But at some point, they can start chopping away rights. I think that's what happened here," Boutrous told reporters.

Jocelyn Larkin and other lawyers for the employees disagreed. They said overwhelming evidence supported the judge's decision, upheld by a U.S. appeals court, to certify the nationwide class for trial.

"Wal-Mart is attempting to dismantle the Supreme Court's employment discrimination class-action jurisprudence," Larkin said.

"Such far-reaching changes to the law would require the court to overrule 45 years of civil rights and class-action precedent. This would rule out certification of all but the smallest employment discrimination cases," Larkin said.

The Obama administration did not take a position in the dispute, even though the federal government's Equal Employment Opportunity Commission previously supported the workers.

Legal briefs filed with the Supreme Court split largely along predictable lines, with Wal-Mart supported by business groups and big corporations, including retailer Costco, tobacco company Altria Group Inc and software giant Microsoft Corp. Women's rights groups backed the employees.

The Supreme Court case is Wal-Mart Stores Inc v. Betty Dukes, No. 10-277.