Creating the largest private civil rights case in U.S. history, a federal judge approved a class-action sex-discrimination lawsuit against Wal-Mart Stores Inc. representing as many as 1.6 million current and former women workers.
The suit alleges that the retail giant set up a system that frequently pays its female workers less than their male counterparts for comparable jobs and bypasses them for key promotions.
Wal-Mart, the nation's largest private employer, sought to limit the scope of the lawsuit filed in San Francisco three years ago on behalf of six women.
Nine months after the case was argued, U.S. District Judge Martin Jenkins ruled Tuesday to expand the lawsuit to include virtually all women who have worked at Wal-Mart's 3,500 stores nationwide since December 1998.
The decision that the case merits class action was pivotal because it gives lawyers for the women tremendous leverage as they pursue punitive damages, as well as back pay and other compensation.
"I think it's a terrific victory for the women who work at Wal-Mart who have labored for years under working conditions where they have been told repeatedly they have been unsuitable for management and not suitable to make as much as men," said Joseph Sellers, one of the attorneys representing the women.
Bentonville, Ark.-based Wal-Mart downplayed the significance of the ruling and promised an appeal.
The decision "has absolutely nothing to do with the merits of the case," spokeswoman Mona Williams said. "Judge Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action."
In a daylong hearing in September, company attorneys urged Jenkins to allow so-called mini-class action lawsuits targeting each outlet. Wal-Mart contends its stores, including Sam's Club warehouse outlets, operate with so much autonomy that they are like independent businesses with different management styles that affect the way women are paid and promoted.
Pursuing the allegations as a single class action "is absolutely unmanageable on a nationwide basis," Wal-Mart lawyer Paul Grossman told Jenkins. "It would require a mind-boggling number of individual determinations."
Jenkins ruled that a congressional act passed during the civil rights movement in 1964 prohibits sex discrimination and that corporations are not immune.
The judge decided that the "plaintiffs present largely uncontested descriptive statistics which show that women working at Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time, that women take longer to enter management positions, and that the higher one looks in the organization the lower the percentage of women."
Jenkins found that the evidence so far "raises an inference that Wal-Mart engages in discriminatory practices" against women.
Wal-Mart contends the suit ignores the thousands of women who earn more than their male counterparts. The retailer also says the lawsuit's allegations are flawed because they don't consider the factors that cause one job to pay more than another. For instance, some sales jobs require a gun license, while others pay a premium for workers skilled in handling live crickets sold for fishing, Grossman said.
Williams added that Wal-Mart is evaluating its employment practices.
"Earlier this month Wal-Mart announced a new job classification and pay structure for hourly associates," Williams said, adding the plan was to "ensure internal equity and external competitiveness."
The trial is expected to play out in at least two phases. It would start with the women trying to demonstrate that Wal-Mart has a pattern of paying women lower wages and passing them over for promotions. Wal-Mart would then get a chance to dismantle that theory.
The next phase, if a judge or jury found Wal-Mart did have a pattern of discrimination, would let the plaintiffs seek damages. With so many women in the case, the plaintiffs attorneys have developed a mathematical model to help them determine how much each plaintiff was owed - whether for wages or because they were passed over for promotion.
John C. Fox, a California labor attorney, said women could be entitled to recover wages if a statistical analysis shows similarly situated male employees earned more. But if women are seeking compensation for being glossed over for promotions, each plaintiff would have to prove that, which Fox said could be virtually impossible because of the number of women involved.
"It strikes me this case is crying to be settled," he said.