Wal-Mart faces huge sex-bias case

Seems like a biggie, Walter. They're talking billions of dollars to settle this suit. The proof is in the pudding; women have been kept from management positions at Wal-Mart. They've got BIG problems.

http://www.tampatrib.com/News/MGBFEUIYSVD.html

Well, well. It looks like the "old boys' club" tradition is not confined to "three piece suit" operations!

I'm sorry to see this happen, however, this highlights that even today, there is biased against women in the workplace. The differences in salaries between men and women in this particular example really shows that women are being treated unfairly. I have heard that so many people say that this glass ceiling does not exist and that women are treated the same as men. It is much better than 10 years ago, but there is obviously still an equal rights issue. I wonder what stats would tell about different racial groups and pay?

Here's the latest on Wal-Mart.
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Extra
Wal-Mart on trial
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Massive civil-rights lawsuit is already a landmark, but settling grievances over pay and promotions could change the job landscape for all women -- and for all low-wage workers.

By Mark Sappenfield and Ron Scherer

The decision by a federal judge Tuesday to allow a lawsuit against Wal-Mart to proceed sets the stage for a sex-discrimination trial of unprecedented size, with potential significance to working women.

The judge has now officially made the case a class-action lawsuit, allowing some 1.6 million women who work or have worked at Wal-Mart to join. Brought by six San Francisco Bay Area women who allege that the low-price retailer has shown systemic bias against women in pay and promotion, the case will now probably become the largest civil rights class-action suit ever.

To Wal-Mart, it's a decision fraught with danger, as the judge unleashes a trial of unprecedented scope and complexity, which could strain the legal system to the point of failure and unfairness. But to those bringing the case, the judge's decision adds momentum to a lawsuit that could become a landmark for women's rights.

"Wal-Mart sets the standard in lowering wages and benefits, not just in the grocery industry but all low-wage workers," says Ellen Bravo, executive director of Nine-to-Five, the National Association of Working Women in Milwaukee.Check out your options.


Speaking of the first sexual harassment case that was accepted for class action status in 1991, a case against Eveleth Mines in Eveleth, Minn., Bravo adds: "This has the same kind of feel, the same weight and import as the first case in giving people the status and heft individual cases can't have. It has the potential to make a difference in how they view and challenge the practices."

Proving bias can be tough
Wal-Mart is the largest private employer in the United States, and more than two-thirds of its workforce is female. Yet less than one-third of its managers are female. Moreover, a study by the group leading the lawsuit, the Impact Fund, found that women were paid less than men in every department of the store.

Lawyers involved in sexual discrimination lawsuits say proving these cases can be very difficult. The plaintiffs have to show that they did their jobs but their employer made adverse decisions against them. Then, they must show that those decisions were based on sex, race, or religion.

"They are notoriously difficult to prove," says Joseph Turco, a specialist in discrimination lawsuits at the firm Spar & Bernstein in New York. To prove the cases, the plaintiffs will be allowed to present circumstantial evidence. But the employer is allowed to pull out bad performance reviews. "The burden is then back on the plaintiff to show the reason given is pretext," says Turco. But he says society has become more attuned to employers' efforts to hide discrimination. "Our generation gets it," he says.

Moreover, the sheer size of the case could present problems for both sides.

Stepping up the size of the case to a class action "gives them much greater leverage, because obviously the case is that much bigger," says Judy Malone, an employment law attorney at Palmer & Dodge in Boston. "But it also complicates the case. They've gone from having to prove the case of how many individual plaintiffs they have to representing a class of 1.6 million people. It's going to be a very big case to try to manage on both sides."

She adds: "One of the concerns in the case is that this includes all of the Wal-Mart companies, which may include other related companies. And the argument is these are not monolithically managed, so it's really difficult to lump them all together."

Class status is just a procedure
U.S. District Judge Martin Jenkins in San Francisco took nine months to decide whether to expand the lawsuit to include virtually all women who work or have worked at Wal-Mart. In a hearing last September, company attorneys urged Jenkins to allow so-called mini-class action lawsuits targeting each outlet.

Jenkins ruled that a 1964 congressional act passed during the civil rights movement prohibits sex discrimination and that giant corporations are not immune. In addition, the judge said, the plaintiffs presented sufficient anecdotal evidence to warrant a class-action trial.

Judge Jenkins cited "statistics which show that women working at Wal-Mart stores are paid less than men in every region ... that the salary gap widens over time."

Wal-Mart, for its part, said it is not commenting on the case but issued a statement:
"Let's keep in mind that today's ruling has absolutely nothing to do with the merits of the case. Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action. We strongly disagree with his decision and will seek an appeal. While we cannot comment on the specifics of the litigation, we can say we continue to evaluate our employment practices. For example, earlier this month Wal-Mart announced a new job classification and pay structure for hourly associates. This new pay plan was developed with the assistance of third-party consultants and is designed to ensure internal equity and external competitiveness."

More trouble in the wings
Plaintiffs, however, believe their case is strong. "Guys walking in the door made more money than I did," says Christine Kwapnoski, a plaintiff. "There have been a ton of guys promoted over me time and time again... I've been tempted to quit a few times. But I know I can stick it out."

Lawyers for the plaintiffs said female workers were routinely steered toward positions such as cashier, where there was little chance for promotion. According to court documents, one woman was told she was not qualified to be a manager unless she could stack 50-pound bags of dog food.

Wal-Mart's stock closed down 87 cents, or 1.6%, at $54.06 on the New York Stock Exchange on Tuesday.

Wal-Mart may face yet other class-action lawsuits as well. Lawyers are now working on a case involving overnight janitors and restockers who have been locked in the stores overnight. That case has yet to be filed. "These are people who have been told (that) if they open the doors they will lose their jobs - it's a fire and safety problem," says Andrew Stettner of the National Employment Law Project in New York.

Most large class-action lawsuits in the United States are settled before they go to trial. If the sex-discrimination case does go to trial, activists groups believe it has the potential to change the way low-wage employers act. (A guilty verdict would open a second phase of the trial to determine damages.)

In a 1997 case covering 25,000 women, Home Depot settled a sex discrimination case for $104 million.

If Wal-Mart were forced to cough up a comparable $4,000 per person, that would be $6.4 billion, although legal experts have said a figure that high was very unlikely.

Loss wouldn't be 'a death blow'
Emme Kozloff, retail analyst with Sanford Bernstein, said even a settlement or judgment in the billions of dollars "is not necessarily a death blow to Wal-Mart." She said every $1 billion of pretax settlement or damages would reduce earnings per share by about 15 cents. Wal-Mart earned $2.2 billion, or 50 cents per share, in its first quarter ended April 30.

Kozloff said Wal-Mart could cover up to $10 billion in damages or settlement costs with cash on hand and cash flow, but would probably have to suspend share repurchases.

Wal-Mart, based in Bentonville, Ark., employs more than 1.2 million people in the United States -- about two-thirds of whom are women -- and operates more than 3,000 U.S. stores. Globally, Wal-Mart has more than 1.5 million employees, and stores in Mexico, Puerto Rico, Canada, Argentina, Brazil, China, South Korea, Germany and the United Kingdom.

Stung by high-profile lawsuits and negative press about employee treatment, Wal-Mart has recently turned up its public relations efforts with an advertising campaign featuring women and minority managers.

Chief Executive Officer Lee Scott announced earlier this month that he and other top executives would forgo 7.5% of their bonuses this year if Wal-Mart does not meet certain diversity goals.

Information from wire services was included in this report.

-- © Copyright 2004 The Christian Science Monitor. All rights reserved.