Wal-Mart Dealt Body Blow in Gender Bias Class Action Lawsuit

The case of Dukes v. Wal-Mart isn’t new. Filed a decade ago by six women on behalf of all female employees of Wal-Mart, it claims that the company pays women less than men for the same jobs, that female employees receive fewer promotions than men, and that female employees have to wait longer for promotions than men. In a 6-5 decision, the 9th Circuit Court of Appeals has ruled that the case should move forward as a class action. Wal-Mart is likely to appeal to the U.S. Supreme Court.

Wal-Mart argues that this case isn’t suitable for a country-wide class action because each outlet operates as an independent business with separate policies. The company also argues that the case as a class action is just too big. It involves somewhere between 500,000 and 1.5 million women.

Let’s say the class is composed of one million women. Let’s say each woman is determined to be entitled to $1,000 (a low-ball number by the standards of today’s discrimination cases). That would come to one billion dollars. Wal-Mart, coming off a decline in total sales for the fourth-quarter for the first time since 1969 and its third consecutive quarter of declines in sales at stores open at least a year, is also concerned about the negative impact of this case on an important component of its customer base: women shoppers.

The 9th Circuit did make a couple of rulings that could favor Wal-Mart. It ordered the lower court to determine whether punitive damages are appropriate in this case and whether the lawsuit should include former and current female employees going back to 1998 or to 2001. If this case moves forward, it will be the mother of all class actions and have ramifications for all employers, particularly large ones. Stay tuned.

For more, see Jottings, Workplace Prof, and Ross Runkel.