Tuesday, April 27, 2010

Ninth Circuit Certifies Wal-Mart Gender Discrimination Class-Action Law Suit

In a divided 6 to 5 ruling, the Ninth Circuit Court of Appeals has certified a gender discrimination class-action lawsuit against Wal-Mart to proceed to trial. Wal-Mart is the world’s largest retailer. The gender discrimination lawsuit includes over 1 million women, and is the biggest employment discrimination case in U.S. history. Brad Seligman, a lawyer for the plaintiffs and executive director of the Impact Fund, a public-interest litigation organization that funds complex litigation, stated that “Wal-Mart tries to project an improved image as a good corporate citizen. No amount of P.R. is going to work until it addresses the claims of its female employees.”

The class-action lawsuit was originally filed against Wal-Mart in June 2001 by six female Wal-Mart employees who had worked in 13 Wal-Mart stores. The lawsuit alleged that Wal-Mart engaged in a pattern and practice of discriminating against women in promotions, pay, training and job assignments. Since the filing of the lawsuit, Wal-Mart has fiercely defended itself and its outside counsel, Theodore Boutrous, a partner Gibson Dunn & Crutcher LLP, has successfully managed to delay the case for nine long years including obtaining a stay of discovery during the pendency of several appeals. It is not surprising that Wal-Mart's general counsel, Jeff Gearhart, stated that "…Wal-Mart is considering options, including seeking review from the Supreme Court... We do not believe the claims alleged by the six individuals who brought this suit are representative of the experiences of our female associates." Appeals have delayed the lawsuit from moving to trial thus far, Wal-Mart has nothing to lose by appealing the decision to the Supreme Court, other than time.

Many experts believe the court’s class certification ruling provides a major incentive for the parties to reach a settlement before the case goes to trial, because juries are so unpredictable—sometimes awarding plaintiffs big sums and sometimes awarding the plaintiffs nothing. If the case does proceed to trial, approximately 1.4 million female plaintiffs could be awarded billions in actual damages and an even more substantial amount in punitive damages. The Ninth Circuit left the issue of punitive damages to the trial judge to decide whether the plaintiffs can seek punitive damages on class-wide basis or whether they must they pursue punitive damages individually. Seligman stated that he would be "happy to talk settlement." However, Boutrous believes that [Wal-Mart] is focused on a Supreme Court appeal rather than on a settlement. Boutrous stated that "[W]e feel the majority's ruling conflicts with not only Supreme Court precedent, but the law of several other circuits…talks of settlement were premature."

This is all very disturbing. There has been such little media coverage regarding the pending gender discrimination lawsuit that most people, myself included, had forgotten about it. I gather we all assumed that the case had been dismissed or quietly settled. And, Wal-Mart had done such an extraordinary public relations effort of profiling itself as an environmental sustainability superstar over the past six years that our collective focus was misdirected. Professor Jared Diamond’s op-ed piece in the New York Times last December applauded Wal-Mart’s sustainability programs include using renewable energy to power its stores and cleaner transportation to drive its trucking fleet. The new sustainability programs were going to save Wal-Mart’s millions in operating expenses which would have resulted in major savings, that Wal-Mart had announced that it would to pass on to its customers. We were all lovin’ Wal-Mart. However, it makes me wonder whether Wal-Mart’s environmental sustainability efforts were simply smoke and mirrors to create goodwill, and a positive public image to defray attention from Wal-Mart’s mistreatment of its women employees. Perhaps Wal-Mart is committed to environmental sustainability, I certainly hope so, but it all feels pre-calculated and rather icky in light of the gender discrimination lawsuit. As a periodic Wal-Mart customer, is it too much to ask that the world’s largest retailer should help save the environment, and treat its women employees decently? We should demand no less.


  1. Wow! Very interesting.
    Th 9th Circuit is hard to predict sometimes, especially in tight cases like this.
    It's a big win for women and minorities, fighting against the biggest American powerful corporation and their lawyers - who are arguable the hottest appellate law firm right now in America.
    With a huge work force like the one Wal-Mart has, they need to be very careful when treating minority and women employees.

  2. Walmart has been taking advantage of women for decades. I think it boils down to a lack of respect for women in general. The secretiveness of the lawsuit for nine years evidences Walmart's power to influence the media. I applaud the courage of the Ninth Circuit to let the case proceed to litigation. These woman will finally get their day in a court and be vindicated.

  3. I appears that you have already decided the outcome of the suit, pronouncing Wal-Mart guilty without recourse to trial. It's one thing to "allege" mistreatment and another to establish guilt. It's disturbing to see someone who has made the law her career display such prejudice.

    Many experts believe the court’s class certification ruling provides a major incentive for the parties to reach a settlement before the case goes to trial, because juries are so unpredictable ...

    This statement sums up the problems with the country's tort system. Rather than being a venue for justice and the redress of grievances, it has become little more than a casino. The system increasingly looks like an extortion racket where defendants are told to pay-up or face the spin of the legal roulette wheel.

    We were all lovin’ Wal-Mart. However, it makes me wonder whether Wal-Mart’s environmental sustainability efforts were simply smoke and mirrors to create goodwill, and a positive public image to defray attention from Wal-Mart’s mistreatment of its women employees.

    Ah, yes, there is no redemption for the sinner. Unless, of course, they get their politics straight and support unionization and other leftist causes, then all things are possible. Just ask Robert Byrd, a former Grand Kleagle of the KKK, who is now described by liberals and their media mouthpieces as the "conscience of the Senate". Or, Alcee Hastings, impeached as a federal judge for corruption and perjury, and now a celebrated Democrat congressman. Perhaps all their political posturing is "simply smoke and mirrors to create goodwill and a positive public image."

    ... is it too much to ask that the world’s largest retailer should help save the environment, and treat its women employees decently?

    As I said before, it hasn't yet been established that Wal-Mart has mistreated anyone. They have, however, tried to be responsive to the environmental concerns of their customers.

  4. I would bet that after this development, Wal Mart will be trying to settle this suit- and fast. With more than one million women potentially involved in this suit- can Wal Mart really afford all this bad publicity, even if they eventually prevail in court. People will not be remembering the verdict, just the thousands of horror stories about the company's treatment of women.Even if they win in court, overall, they will be losing.

    In undergrad, all of the management classes were structured to use Wal Mart as one of the prime examples to a well functioning business entity, maybe after this, schools as well as consumers will start rethinking their approach to management and the never-ending glass ceiling.

    It's great that Wal Mart is trying to save trees and such with their "environmental sustainability" movement, but maybe they should start focusing on saving face.

  5. According to Model Rule of Professional Conduct 1.3, “A lawyer shall act with reasonable diligence and promptness in representing a client.” Delay tactics like those employed in this case make a mockery of the justice system. I don’t propose to speculate on whether this action is meritorious or not, however, if there is a so-called glass ceiling for female employees at Wal-Mart and women have been unduly hindered from corporate advancement, these women should not have to wait nine years in order for it to be determined whether their case may proceed to trial. A comment to the above-cited rule proclaims, “Even when the client’s interests are not affected in substance, unreasonable delay can cause a client needless anxiety and undermine confidence in the lawyer’s trustworthiness.” Too many lawyers treat the Model Rules of Professional Conduct as a loose guideline that they can bend for the benefit of their clients or in order to run up a larger litigation bill than necessary. Delays in litigation and the cost of litigation wars can more easily be borne by corporations such as Wall Mart than they can by the victims of corporate wrongs. A comment to Rule 3.2 states, “Dilatory practices bring the administration of justice into disrepute.” With delay tactics, there is no question that the general public will develop an ever-increasing negative view of the civil justice system. The system works best for those with huge finances while victims are left waiting for compensation for the harms they have had to endure.

  6. Michael RosenbergApril 28, 2010 at 9:19 AM

    I find it interesting that you say that Walmart is creating this image of being an environmentally friendly corporation, and this would create a "smoke and mirror" situation to this pending litigation. Just last night on tv was a Walmart truck driver saying how he has helped Walmart save hundreds of millions of dollars in fuel costs by changing his route, thus passing the savings onto me--the consumer. Why would anyone think that Walmart treats women badly when it is fulfilling its corporate responsibility to the environment? I think that this would certainly play into any jury's award of monetary damages.

    Any sort of discrimination should grab the press's attention and inform the public of any corporate misdeeds. We are in an era (or at least I'm more aware of it now) of Corporate greed. These gross violations of the public's trust must be illuminated.

  7. You're right - Walmart has done a extraordinary job of sweeping this story under the rug by promoting its commendable environmental policies. HOWEVER, I will never believe that public sentiment has turned so strongly in Walmart's favor as to suddenly make it look like the "good guy" in this pending employee discrimination matter. To me, Walmart is - and always will be - in public disfavor when it comes to its image. Assuming this lawsuit will generate bigger headlines, I believe it will resurrect public resentment. Walmart's attorneys should recognize this and settle with the aggrieved parties.

  8. 1.4 million female plaintiffs...wow, I wonder if there really is a valid gender discrimination claim for all these women or if some women have joined in the class action lawsuit just to cash in some money. I was reading an article now and one woman who filed the lawsuit said:
    "When asking why they didn't get a promotion that went to a man, they were told management is men's work, not women's work, you should be home taking care of your family," said co-lead counsel Joseph Sellers.”
    It upsets me that some men would even still have this mentality in 2010. I’ve worked some retail jobs before in which I have seen gender discrimination in which all the women were placed as cashiers and the men were placed on the floor to work on commission giving them opportunities to get paid more. Not once did I see a woman placed on the floor. When I asked someone why this was so, he or she told me that men are better and more aggressive sellers. Even though I love Walmart and it’s one of my favorite stores to shop at I agree that Walmart is an equally discriminating employer. They create an environment of low wage and high demands for all their hourly employees. I once applied to Walmart and they wanted to hire me at $6.50 an hour, and I had lots of retail experience. The reason why I applied there to begin with is because I asked some guy that worked there how the pay was. He told me his hourly wage at which he started at, and it was definitely more than the $6.50 I was offered. If women are being paid less for the same job as a man and if they have to work harder and wait longer for a promotion than Walmart is violating US laws and should be held accountable.

  9. -Anthony Gonzalez

    I agree with Drew, these shady delay tactics expose the flaws in our legal system. 9 years...no wonder everybody forgot this claim was still pending. Wal-mart just needs to settle and start treating the ladies better. Wal-mart needs to keep the eye on the prize, "keep making money and not making enemies." I mean haven't they ever heard that "hell has no fury like a woman scorned," and here they're dealing with over a million scorned women...Goodluck Wal-mart!

  10. Jamil Davis

    Walmart is doing what any sound PR firm would do in their situation: quickly change the image of the company from potential villain to good samaritan. This is common from the corporate world to childhood adolescence. I broke mom's vase but if I make her a cake, she might not notice. I do agree with the comment above that Walmart has every right to carry out this case out until there is a determination of the facts by judge and jury.
    The real question I have to ask is if this suit was by a group of racial minorities would it be in the public eye more? There have been great bounds met by the woman's right movement but it still seems apparent today such as this case that women still do not garner the respect and interest of society as a whole. Maybe it is because society has been slow to come around to women's right or maybe there is no woman out there who will continue to champion their cause. It just makes me wonder how far women have really come in our society.

  11. On its face, discriminatory practices seem apparent: Walmart’s female employees only make up 33% of Walmart’s management, yet it employs 65% of women as its hourly employees. I’m not sure, but isn’t Walmart America’s largest private employer? If the Supreme Court does decide to take the case, are four Supreme Court justices really going to contend the class is too big to proceed? Considering how huge and profitable Walmart is, it’s scary to think it would allow systemic sexism to plague its employment practices considering the potential damages and PR nightmares that can appear. If Walmart’s guilty, I wonder how many small businesses that each employs a couple thousand people a piece practice the same ideals.

  12. Kyle Sheehan

    Wal-Mart will be looing to settle this case very quickly I imagine. It is obvious that they do not want this to gain any traction in the public media realm, after all they did delay it 9 years, probably in hopes that those bringing the suit would eventually grow tired of the delay and drop the suit. I can't imagine that Wal-Mart is going to allow this to go very far or gain much publicity, their good will is too much to lose for them. It seems difficult to me as well that Wal-Mart, with such a large workfroce and such a seemingly systematic way to go about things, would let gender play a role in who they chose to best operate and manage their product, but crazier things have happened.

  13. I mean honestly, I wouldn't expect anything more of Wal-Mart. This is the same company that is responsible for enabling sweatshops and cheap labor, child labor, and the same company that goes into small cities and undersells the mom and pop's stores until it's the surviving shop. Not surprising at all that it discriminates against women and uses deplorable tactics. It's rather interesting, however, that cases like this, where a big corporation is a party, tend to stay outside the realm of coverage by medias, whether it be Wal-Mart or Nissan. Although, i do agree that the Wal-Mart hasn't been conviceted yet, but Wal-Mart has a history of mistreatment with it's employees; therefore it would not be a surprise at all if Wal-Mart was found to be guilty. It's sad, but history and the present events in this country, tell us that if you have money, you may be able to manipulate the justice system.

  14. This was an enlightening article thank you. I was unaware of this pending suit against Wal-Mart for sexual discrimination. This is a huge issue affecting many women in this country every day. People need to be informed about this pending suit against Wal-Mart because sexual discrimination cannot be tolerated in this country. This is a serious issue for women who currently struggle in the work sphere dollar- to –dollar with men. Wal-Mart is enjoyed by millions, with their 24-hour service and cheap prices however this cannot be at the expense of women. It bothered me that I hadn’t heard more in the news and media about this pending litigation. I hope if Wal-Mart is guilty that justice is served and proper sanctions and punishments applies; otherwise this sort of practice will continue.

  15. LaureenG (FIU)

    I agree that Walmart's treatment of its employees is deplorable. My niece was offered a job after a college and turned it down for this very reason. I would hope that their environmental efforts are not just a smokescreen adn that the efforts are legitimate and that they truly are truly to save their environment. It is doubtful though, that on one hand, they can treat human beings badly and with the ohter try to save the environment.