The United States Supreme Court on Tuesday takes up the largest employment discrimination lawsuit in US history, a case pitting the world’s biggest retailer, Wal-Mart Stores, Inc., against more than 1.5 million current and former female employees.
The lawsuit, filed in 2001, alleges that Wal-Mart discriminated against women workers by paying them lower wages and promoting them less often than male employees. If the female workers win, it could cost Wal-Mart more than a billion dollars.
Wal-Mart denies the allegations.
But that’s not the issue before the high court.
The justices must address whether lower court judges were correct in allowing the women to join together in a single, massive lawsuit against Wal-Mart.
How the court answers that question could make it harder or easier for plaintiffs to band together in a wide range of lawsuits, including cases involving discrimination, civil rights, the environment, securities fraud, and dangerous products.
Corporations and business groups, who have long sought to limit the size and scope of such class-action lawsuits, have filed friend-of-the-court briefs siding with Wal-Mart. Women’s groups and civil rights organizations have filed briefs supporting the female employees.
Marcia Greenberger, founder of the National Women’s Law Center, says the case will be critical in the fight for women’s rights and employee rights.
“The bigger the employer, the more important the class-action feature,” Ms. Greenberger said at a recent American Constitution Society discussion.
Other analysts say the court will likely approach the case with a broader perspective.
The nationwide class-action suit against Wal-Mart seeks an injunction ordering the retail giant to end its alleged discriminatory employment practices. It also seeks back pay and punitive damages.
A class-action lawsuit is a legal case filed on behalf of a number of plaintiffs who suffered similar injuries. It seeks to achieve a degree of judicial efficiency by lumping similar plaintiffs together into one large case against the same defendant. Lawyers who file such suits identify an appropriate group of the victims to represent the larger class of victims.
Lawyers for Wal-Mart say the case should not proceed as a single class-action lawsuit. They say the class as approved by the lower courts violates federal rules of procedure that require all members of the class to share a common injury. In addition, they say the massive lawsuit makes it impossible for the corporation mount an effective defense.
“The class members – potentially millions of women supervised by tens of thousands of different managers and employed in thousands of different stores throughout the country – assert highly individualized, fact-intensive claims for monetary relief that are subject to individualized statutory defenses,” said Theodore Boutrous of Los Angeles in his brief on behalf of Wal-Mart.
He added that the claims made by the designated class representatives “cannot conceivably be typical of the claims of the strangers they seek to represent.”
The women’s lawyer, Brad Seligman of Berkeley, Calif., countered in his brief that Wal-Mart wants to break the class action down into store-level cases. “This outcome would not only waste judicial resources,” he wrote, “it would deprive plaintiffs of the ability to challenge and seek relief from Wal-Mart’s systematic, company-wide practices.”
Mr. Seligman says that the average individual claim represents an annual wage loss of $1,100. Standing alone such a claim would be too small to pursue, he said in the brief.
Wal-Mart is the nation’s largest private employer, with 41 regions, 400 districts, 3,400 stores, and more than a million employees. Each store employs from 80 to 500 workers. Hourly employees work in 53 departments and 170 job classifications. The company had sales of $405 billion last year and net income of $14 billion.
At its core, the class action suit accuses Wal-Mart’s top management of fostering an old-boy network and a corporate culture infused with gender stereotyping. This culture existed company-wide and was evident in promotion and pay decisions made at the regional and store level, Seligman says. The result was that female workers companywide were treated as second-class employees, according to Seligman.
Female employees, on average, were better performers and more experienced than male workers, yet their pay at Wal-Mart “lags far behind” male employees in every major job, Seligman says.
“Women at Wal-Mart also face a classic glass ceiling,” he wrote. “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.”
Wal-Mart responds that its company-wide policies forbid discrimination and promote diversity. The plaintiffs’ statistical analysis does not measure whether store-level employment decisions were, in fact, discriminatory, the company’s lawyers say.
From 1995 to 2001, they say, women throughout the US were paid 77 percent of what men were paid. In comparison, the plaintiff’s statistics show Wal-Mart paid women 85 to 95 percent of men’s salaries during that same period, they say.
They say that at the retail store level, women comprised two-thirds of all managers and were two-thirds of all employees.
Wal-Mart’s lawyers say the plaintiffs’ case is built on a deceptive statistical analysis and anecdotes of “a smattering of isolated incidents dating back to the 1980s.”
They say the plaintiffs are unable to prove that Wal-Mart maintained a company-wide policy disfavoring women and that the company’s managers engaged in intentional acts of discrimination.