Wal-Mart facing biggest ever sex discrimination claim

America's biggest employer stands accused of systematically discriminating against female staff. And there's more than just money at stake.

by James Taylor
Last Updated: 19 Aug 2013
Today, the US Supreme Court will begin hearing a case that could have huge significance for the country’s economy. At issue is whether to allow a group of women to pursue a class-action lawsuit against Wal-Mart for sex discrimination – and since Wal-Mart has more than a million female staff, this could leave it exposed to a potentially massive financial penalty. Wal-Mart denies the claims, of course, and argues that it’s crazy for the court to allow the complaints of a small and disparate group of women to be seen as representative of an entire class. Most of corporate America will be hoping the Supreme Court agrees….

If this issue rings a bell, it’s because it’s actually been rumbling on for ten years already. The group of women (led by one Betty Dukes, who still works at Wal-Mart – brave indeed) claim they were systematically paid less than their male counterparts and routinely passed over for promotion; one of them even says she was told by her manager to ‘doll up’ and ‘blow the cobwebs off your make-up’. Back in 2004, a district court judge gave them the go-ahead to launch a class-action suit on behalf of all Wal-Mart’s female employees; the giant retailer has already lost one appeal, so it’s now taking its case to the Supreme Court.

The court won’t actually rule on the merits of the women’s specific complaints. Instead, the judges will decide whether or not it’s reasonable to suggest that these women’s experiences are representative. Wal-Mart says not - its argument is that even if these women have a case individually, they can’t possibly speak for such a huge group of women working in thousands of different stores right across the country. But the women claim that there’s a corporate culture of discrimination, coming from the top down – and that they wouldn’t have the resources to pursue their claims separately.

If they’re allowed to pursue their case, and Wal-Mart loses (or chooses to settle, which some think may happen in order to avoid a high-profile court case), it would cost the giant retailer a fortune; one of the lawyers is talking about $1,000+ per woman, per year, so we’re talking billions. What’s more, corporate America is worried that it would open the door to other similar class-action lawsuits against other big US employers – which is why the likes of Intel, Microsoft and GE have all filed ‘friend of the court’ briefs, sticking up for Wal-Mart. With $16bn in net profits last year, Wal-Mart is one of the few companies on earth who could afford a fine like that. Others would not be so fortunate.

The good news, as far as these corporates are concerned, is that the Supreme Court has tended to agree that it’s not appropriate for this kind of complaint to be made as a class-action lawsuit. And if these women want to avoid another decade of legal wrangling, perhaps they’d be better off going it alone anyway…

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