A Rollback For Wal-Mart
Like Microsoft in the 1990s, retail colossus Wal-Mart has a polarizing effect on people. They tend to either love it for its low, low prices, or loathe it for its size and business practices.
In the courtroom and city council room, it's under attack. But these look to be mere skirmishes in light of Tuesday's decision by a federal judge to allow a class-action suit over alleged pay and promotion disparity to go forward. The suit, the largest class action ever in a civil case, could affect 1.6 million present and former female Wal-Mart employees, potentially costing the world's largest retailer billions of dollars in damages.
But some aspects of the case don't fit the exploited-worker vs. corporate-villain view that many hold of Wal-Mart.
For instance, statistics gathered on behalf of the six women who brought the suit show that 65 percent of Wal-Mart's hourly employees are female, compared with only 33 percent of the management. This could indicate promotion discrimination, but other factors could also be at play.
Working mothers, for example, may not find it's worth trading the dependable schedule and pay of hourly wages for the unpredictable and unpaid overtime required of managers. Indeed, Wal-Mart says its female employees have shown little interest in managerial jobs. Sears, Roebuck & Co. beat a sex-discrimination suit in 1986 with just this argument.
On the other hand, it's hard to take seriously Wal-Mart's claim that absent a centralized personnel policy, it's not responsible for decisions made in individual stores. Corporate culture also counts, as the judge wrote in his ruling.
Where the plaintiffs appear on firmest ground is their claim of pay discrimination. They presented a study showing that last year, Wal-Mart's female employees earned 5 percent less than male counterparts with inferior education, experience, and job reviews. Such statistical analysis holds up routinely in court because it is not subject to the same kind of individual evaluation that a promotion might be.
Like most class-action discrimination cases, this one is likely to be settled out of court. That could still mean a sizable settlement, but also a change in Wal-Mart's personnel practices, if warranted. Apparently, the retailer already has recognized the need to correct its course, adding a director of diversity, for instance, and restructuring pay scales.