Wal-Mart Bias Case Moves Forward
Experts in employment law said the case is significant beyond its potential effect on Wal-Mart.
"The magnitude of the class is more [notable] than anything else. The issues of the individuals are not particularly novel," said Thomas J. Flaherty, an employment lawyer in McLean who represents employers. He said cases "of this magnitude and scope are pretty unique and are precedent-setting."
Joseph M. Sellers, a District attorney who is co-counsel for the women in the case, said the class-action certification is significant because "it's going to open the courthouse doors for 1.6 million women, most of whom would never bring their case to court, many of whom have suffered in silence and probably given up on any chance to make things better."
Carolyn P. Short, a lawyer in Philadelphia representing companies, called the Wal-Mart suit "a landmark case" that will be felt throughout corporate America. "I do think there's going to be an internal corporate focus within the boardroom where programs are going to be tightened and improved. . . . I do think there are going to be concentrated corporate efforts to make sure they're in compliance with the law and be female-friendly."
In his ruling yesterday, Jenkins cited statistical evidence that lawyers for the women found in Wal-Mart files. Richard Drogin, a statistician at California State University at Hayward, found that it took women an average of 4.38 years from the date of hire to be promoted to assistant manager, while it took men 2.86 years. It took 10.12 years, on average, for women to reach store manager, compared with 8.64 years for men. He also found that female managers made an average salary of $89,280 a year, while men in the same position earned an average of $105,682 a year. The results for hourly workers show that women were paid 6.7 percent less than men in comparable positions.
Attorneys for the women also cited an analysis by labor economist Marc Bendick Jr., who compared hiring practices at Wal-Mart and 20 other retailers. He found that 56.5 percent of the in-store managers at the competitors' stores were female, compared with 34.5 percent at Wal-Mart. In anecdotal evidence cited in the ruling, a male Wal-Mart manager was quoted as telling an employee, "Men are here to make a career and women aren't. Retail is for housewives who just need to earn extra money."
Most large discrimination cases are settled out of court. Home Depot Inc. settled a sex-discrimination class-action suit in 1997 for $104 million. In 1996, Texaco Inc. shelled out a $176.1 million settlement on behalf of black employees who sued for racial discrimination. And Coca-Cola Co. paid $192.5 million in 2000 to employees who sued for discrimination. Publix Super Markets paid $81.5 million in 1997 for discriminating against female workers.
Randel Johnson, U.S. Chamber of Commerce vice president of labor, said, "I think that's more incentive to file lawsuits because damages are exponentially larger than they ever were. And there's an enormous amount of potential damages at the end of the rainbow here should Wal-Mart be proven guilty. That drives litigation in this area, and much of it is frivolous."
Wall Street analysts yesterday said the history of settlements in large corporate discrimination cases could mean Wal-Mart faces paying billions of dollars. Sanford C. Bernstein & Co. told clients the company has almost $4 billion in cash.
The Bentonville, Ark.-based company reported profit of $9 billion on sales of $256 billion for the fiscal year ended Jan. 31. The company's stock closed yesterday at $54.06, down 87 cents.
Staff researcher Richard Drezen contributed to this report.
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