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Supreme Court to Hear Wal-Mart's Appeal in Nation's Biggest Employment Discrimination Case

Source: WSJ

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Posted on 06 Dec 2010

The Supreme Court on Monday agreed to hear an appeal in the biggest employment discrimination case in the nation’s history, one claiming that Wal-Mart discriminated against hundreds of thousands of women in pay and promotion. The lawsuit seeks back pay that could amount to billions of dollars.

The justices will review a divided lower-court ruling that allowed the civil rights lawsuit to proceed as one of the largest class actions in history. Wal-Mart, backed by business groups and an array of companies, argued the lower-court ruling was an unprecedented expansion of class actions, which allow plaintiffs to pool their individual claims into one big suit.

Six women filed the suit on behalf of current and former Wal-Mart employees, alleging the company paid female workers significantly less than their male counterparts and offered them fewer opportunities for advancement.

The plaintiffs are seeking back pay, punitive damages and changes to how Wal-Mart makes its pay and promotion decisions. They conceded their class action is a large one, but said that's to be expected because Wal-Mart is the nation's largest corporate employer.

The high court will likely hear arguments next spring, with a decision expected by July.

The plaintiffs alleged that Wal-Mart's corporate culture and employment polices fostered gender stereotyping and led to adverse treatment of women in all of the retailer's 41 domestic regions. They charged that Wal-Mart lagged far behind its competitors in its promotion of women and knew of discrimination against its female employees but failed to act.

Wal-Mart said it is an excellent place for women to work, with policies that prohibit discrimination. The retailer said the case should not be granted class-action status because the plaintiffs' claims are too varied to proceed together, making it difficult for the company to mount a defense in a single case.

The plaintiffs held different jobs in different stores, working for different managers in different states, Wal-Mart said.

The company also said the trial judge erroneously granted the lawsuit class-action status under a legal provision that is not designed to allow class actions that primarily seek money instead of other forms of legal relief.

The San Francisco-based 9th U.S. Circuit Court of Appeals ruled 6-5 to allow the lawsuit to proceed as a class action. The court said there were common issues in the workers' claims and it ruled the trial judge was within his authority to conclude that handling some parts of the case as a class action would be better than clogging the courts with individual lawsuits that litigated the same issues repeatedly.

The decision, however, narrowed the lawsuit somewhat. The appeals court said women who no longer worked for Wal-Mart when the original suit was filed in 2001 should not be considered part of the class, but it left open the possibility that those plaintiffs could proceed separately.
The court also said a trial judge acted prematurely by allowing the class-action to proceed on the issue of punitive damages.

The retailer's high-court petition is being supported by an array of corporations, including Bank of America Corp., General Electric Co. and Microsoft Corp. They say the lower-court ruling threatens to expose companies to staggering liability by allowing unrelated discrimination claims to proceed as class actions.


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