Wal-Mart sex-bias case could have wide impact

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A shopper at a Walmart in North Fayette, Pa., loads her purchases into her car. The Supreme Court is set to begin hearing arguments in a Walmart gender discrimination case involving hundreds of thousands of female employees, current and former, regarding pay and promotions since 1998.Gene J. Puskar / AP

The nation's highest court will hear arguments Tuesday in a case pitting employee rights advocates against corporate America, and the outcome could have a sweeping impact on working women and the work world at large.

The Supreme Court will hear arguments in a gender discrimination case against retailing behemoth Wal-Mart over pay and promotions for some 1.5 million female employees, current and former, dating to 1998. At issue is whether this large group of women should be allowed to proceed with a suit en masse.

With their decision, the high court justices could make it easier for large groups of employees to band together and against colossal companies such as Wal-Mart or make it harder by limiting how many of them can join forces to try to change company policies and extract monetary damages.

If the plaintiffs win and are allowed to proceed with the largest class-action lawsuit ever,  potentially worth billions of dollars, “it would be an extremely significant victory,” said Sarah Crawford, director of workplace fairness for the National Partnership for Women and Families. A decision for the plaintiffs would send a message to employers about fair treatment for women, she said.

A decision in favor of Wal-Mart, the nation's largest private employer could mean that millions of women, many of them working low-wage jobs, "could go without a remedy for unlawful discrimination," she said.

Advocates for big business are watching the case equally closely. A decision allowing such a massive class action would have a negative effect on large companies, said John Wester, an employment attorney for Robinson Bradshaw & Hinson in Charlotte, N.C.

“Employers across the country would tremble,” he said.

The justices won’t actually be deciding whether Wal-Mart, which employs more than 1.4 million workers at 4,000 locations nationwide, discriminated against women. Instead the justices will decide whether to allow the sex-bias case to move forward as one of the biggest class-action discrimination cases ever, representing as many 1.5 million current and former female workers who may have been denied raises or promotions. A decision is not expected until late June.

The size and scope of the group is what worker rights advocates say is so important about the case — and just what business advocates say is the problem.

Betty Dukes, the main plaintiff in the case, has worked for Wal-Mart since 1994 and believes that she was paid less than men with less seniority and that she was passed over for managerial positions. Dukes is one of eight named women in the suit who hope to stand for hundreds of thousands of others who might have been similarly affected.

The claims of bias are pretty egregious. The suit contends the retailer’s corporate culture is “rife with gender stereotypes demeaning to female employees.”

Wal-Mart executives allegedly referred to women employees as “Janie Qs” and business meetings were held at Hooters restaurants, according to a Supreme Court filing. The lawsuit contends that “while women comprise over 80 percent of hourly supervisors, they hold only one-third of store management jobs, and their ranks steadily diminish at each successive step in the management hierarchy.”

In 2009, the Ninth Circuit Court of Appeals agreed to class-action status, but Wal-Mart appealed to the Supreme Court, seeking to dissolve the class and force employees to make their cases individually or in smaller groups.

“This kaleidoscope of claims, defenses, issues, locales, events and individuals makes it impossible for the named plaintiffs to be adequate representatives of the absent class members,” the retailer contends in its case.

But the plaintiffs argue that denying class-action status "would burden the federal courts with potentially thousands of store-level cases."

Such an outcome would make it harder for the plaintiffs to get relief, and for future victims of discrimination to bring successful legal cases, worker advocates argue.

A record number of organizations have lined up on both sides of the case. Among companies supporting Wal-Mart’s move to stop the class-action suit are corporate giants including Costco, Microsoft, Bank of America and General Electric. Lining up on the plaintiffs side are groups including the National Women’s Law Center, the National Partnership for Women and Families, the NAACP, the AFL-CIO and the ACLU.

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Gerald Maatman, an employment attorney with the law firm Seyfarth Shaw who wrote a brief supporting Walmart on behalf of Costco and the Society for Human Resource Management, said the suit is unfair because it’s too big.

“What’s the glue that holds the case together?” he asked. If the Supreme Court decides in Wal-Mart's favor, the case could be restructured in smaller cases, which would be “fair to all concerned," he said.

But that would make it harder for victims of discrimination, argued Fatima Graves, vice president for education and employment at the National Women’s Law Center.

“When you’re able to proceed together as a class there’s a host of benefits that flow from that.”

For example, a larger group provides employees with more protection from retaliation, and it’s often easier to obtain company data as a representative of a larger group.

What’s really at stake, Graves said, “is the ability to challenge broad-scale practices, rather than doing them piecemeal, especially for low-wage women. This case is going to matter because it will let women know they have the ability to challenge pay discrimination" and it will provide incentive for employers “to take corrective action in the first place.”

Jamie Ladge, assistant professor of management and organizational development at Northeastern’s College of Business Administration, says the case could be a wakeup call for  Wal-Mart and other large employers.

She noted that women now make up a majority of the work force, women are earning more degrees "and women are advocating more for themselves.”

Class-action lawsuits like the one against Wal-Mart can protect all workers and signal to corporate America that “cultures need to change.”