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Sexual Discrimination Lawsuit Against Wal-Mart to Proceed

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A federal appeals court in San Francisco allowed a landmark sexual-discrimination lawsuit against Wal-Mart to move ahead, ruling that the seven plaintiffs were eligible for class-action status. Plaintiffs are alleging that women employed in Wal-Mart stores are paid less than male employees in comparable positions (regardless of performance ratings and seniority) and that female workers receive fewer and wait longer for promotions to in-store management positions than men. As many as 1.5 million former Wal-Mart employees may join the legal action.

The 2-1 decision by a judicial panel of the Ninth Circuit Court of Appeals comes a year and a half after the case was initially argued and submitted, and it upholds the decision made by a District Court in 2004 in the case of Dukes v. Wal-Mart Stores, Inc. The plaintiffs also filed a motion on April 28, 2003, to certify a class of female Wal-Mart employees who may have been affected by the company’s allegedly discriminatory policies.

In supporting the ruling, Judge Harry Pregerson wrote in his opinion, “We hold that the district court acted within its broad discretion in concluding that it would be better to handle this case as a class action instead of clogging the federal courts with innumerable individual suits litigating the same issues repeatedly…. Wal-Mart failed to point to any specific management problems that would render a class action impracticable in this case, and the district court has the discretion to modify or decertify the class should it become unmanageable. Although the size of this class action is large, mere size does not render a case unmanageable.”

The original complaint against the world’s largest retailer claimed that Wal-Mart violated Title VII of the 1964 Civil Rights Act. “Plaintiffs contend that Wal-Mart’s strong, centralized structure fosters or facilitates gender stereotyping and discrimination,” wrote Judge Pregerson, “that the policies and practices underlying this discriminatory treatment are consistent throughout Wal-Mart stores, and that this discrimination is common to all women who work or have worked in Wal-Mart stores. Plaintiffs seek class-wide injunctive and declaratory relief, lost pay, and punitive damages. They do not seek any compensatory damages on behalf of the class, which is estimated to include more than 1.5 million women. The class encompasses women employed in a range of Wal-Mart positions–from part-time, entry-level, hourly employees to salaried managers.”

In his opinion, Pregerson noted, “Plaintiffs produced substantial evidence of Wal-Mart’s centralized company culture and policies, which provides a nexus between the subjective decision-making and the considerable statistical evidence demonstrating a pattern of discriminatory pay and promotions for female employees…. We find that the district court did not abuse its discretion when it held that Wal-Mart’s subjective decision-making policy raises an inference of discrimination, and provides support for plaintiffs’ contention that commonality exists among possible class members.”

Wal-Mart had argued that each of its 3,400 stores operates as a largely independent entity, thereby eliminating the possibility of a class action.

However, Judge Pregerson added, “Plaintiffs’ expert opinions, factual evidence, statistical evidence, and anecdotal evidence present significant proof of a corporate policy of discrimination and support plaintiffs’ contention that female employees nationwide were subjected to a common pattern and practice of discrimination. Evidence of Wal-Mart’s subjective decision-making policy raises an inference of discrimination and provides further evidence of a common practice.”

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