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Wal-Mart Bias Case

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That's where it is today, as a federal appeals court considers Wal-Mart's appeal of a district court ruling that certified a bias lawsuit against the company in what experts say is the largest civil rights class action ever against a private employer. Lawyers are weighing the implications regardless of how the case finally ends.

The suit seeks damages for lost earnings, as well as punitive damages, although the amounts have not yet been specified, says Brad Seligman, executive director of the Impact Fund, a Berkeley, CA,-based nonprofit organization that is involved in the case on behalf of the plaintiffs.


It began in 2001, when six women-current and former Wal-Mart employees from California-accused the company of systematically discriminating against its female workers by paying them less than men and offering them fewer chances for promotion.

The lawsuit (Dukes v. Wal-Mart) immediately drew national attention because of Wal-Mart's stature as the largest private employer in the United States. It owns and operates more than 3,500 stores nationwide and employs more than 1.2 million workers. Two-thirds of them are women, but according to the lawsuit, women comprise only 33 percent of Wal-Mart's managers.

The case took on added proportions in 2003, when lawyers for the plaintiffs filed a motion for class certification in San Francisco's U.S. District Court. The motion asked Judge Martin Jenkins to rule that the case could go to trial on behalf of all women who worked for Wal-Mart in the United States at any time since December 26, 1998. The class includes more than 1.6 million women.

The motion was supported by 110 detailed sworn statements from women who worked in 184 different Wal-Mart stores in 30 different states. It included testimony and exhibits developed from more than 10 Wal-Mart managers and executives who were deposed, Wal-Mart's electronic payroll data, and more than 1.2 million pates of documents from Wal-Mart's corporate files.

In his decision certifying the case as a class action, Judge Jenkins described it as ''historic in nature, dwarfing other employment discrimination cases that came before it.'' He also noted that his ruling came in the year marking the 50th anniversary of Brown v. Board of Education. ''This anniversary serves as a reminder of the importance of the courts in addressing the denial of equal treatment under the law whenever and by whomever it occurs,'' the judge declared.

Seven firms with extensive class-action and employment-rights experience are working together on the case representing the plaintiffs.

''Up until now, Wal-Mart has never faced a trial like this,'' asserted Seligman. ''Lawsuits by individual women had no more effect than a pinprick. Now, however, the playing field has been leveled. Wal-Mart will face the combined power of 1.6 million women in court.''

''Wal-Mart has been living in the America of 30 years ago, and those days are over. Certification of this class shows that no employer, not even the world's largest employer, is above the law,'' added Joseph M. Sellers, an attorney with Cohen, Milstein, Hausfeld and Toll, P.L.L.C., a Washington, DC, plaintiffs class-action firm, which is also involved in the suit.

Wal-Mart's chief counsel in the case is Paul Hastings, Janofsky & Walker, a Los Angeles firm.

In seeking review by the appeals court, Wal-Mart's lawyers argued that the case is too large to be managed properly and that the class lumps employees with different experiences together so that Wal-Mart can not litigate individual claims against the company.

''That's the problem with a class action. You lump everyone into the same boat, whether they were impacted or not. That's just not right,'' said Mona Williams, Wal-Mart's vice president for communications.

''Keep in mind that there are only six plaintiffs in this case,'' she added. ''Do I think they were all treated fairly? Probably not. To me, their stories generally have the ring of truth. This is a big company and we have some managers who do dopey things.

''But the stories told by these plaintiffs and others are not representative of the experience most women have working at Wal-Mart. There are hundreds of thousands of women who have wonderful stories to tell about what our company has meant to them.''

The 9th Circuit Court of Appeals in San Francisco is expected to set a hearing date for late winter or early next spring on the class certification order. The trial court has stayed the case until the higher court rules.

In an earlier ruling, the San Francisco district court rejected Wal-Mart's motion to transfer the case to Arkansas, where rulings can be appealed to the 8th Circuit Court of Appeals in St. Louis.

While awaiting further developments, lawyers across the country are considering what the outcome might mean. For employers, the implications of the class-certification decision are ''profound and potentially frightening,'' wrote James J. Oh, a shareholder in the Chicago office of Littler Mendelson, a national employment and labor law firm.

''Successful results breed copycats, and there likely will be an uptick in employment-discrimination class actions,'' he declared in a July article on the firm's website. Mr. Oh is a member of Littler Mendelson's class-action avoidance and defense practice group.

He was proven right barely a month later, when an assistant warehouse manager filed a national sex-discrimination class-action lawsuit against Costco Wholesale Corporation. The suit charged Costco with imposing a ''glass ceiling'' that denies women promotions to high-paying managerial positions.

Meanwhile, the law firms representing the plaintiffs in the Wal-Mart case have reported that other lawyers not associated with the case have been contacting women and offering to represent them. According to the Wal-Mart lawyers, the other lawyers ''are offering to assist women in submitting 'paperwork' and are sending them retainer agreements to sign.''

Women can hire and pay their own lawyers if they want to, but they do not need them to participate in the case, and ''at this time, there is no paperwork to be filled out,'' the Wal-Mart lawyers said.

Costco Wholesale Corporation

    


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