Wal-Mart faces historic sex bias case

SAN FRANCISCO (Reuters) - The largest sexual discrimination lawsuit in U.S. history moved forward against Wal-Mart <WMT.N> on Tuesday when a federal appeals court approved class-action status for seven women who claim the retailer was biased in pay and promotions.

The plaintiffs estimate as many as 1.6 million women who have worked for Wal-Mart in its U.S. stores since 1998 could join the lawsuit. The number makes the group the largest ever to sue for gender discrimination.

"We hold that the district court acted within its broad discretion in concluding that it would be better to handle this case as a class action instead of clogging the federal courts with innumerable individual suits," Judge Harry Pregerson wrote for the United States Court of Appeals for the Ninth Circuit.

"Although the size of this class action is large, mere size does not render the case unmanageable," he said.

Wal-Mart, the world's largest retailer, said it plans to seek a reversal in the decision. Its shares ended little changed on the news, closing at $48.58 on the New York Stock Exchange.

The plaintiffs in the case allege they were denied promotion opportunities, with some also saying they were sexually harassed or subject to sexist remarks.

The 2-1 ruling by the three-judge panel took no position on those claims, stressing the decision only affirmed a lower court ruling to certify the case, Dukes v. Wal-Mart, as a class action against the world's largest retailer.

In a class action, individuals bring a suit on behalf of a larger group that suffered similar harm.

"Class actions have been for four decades now the critical ingredient in employment discrimination litigation," said William Gould, a Stanford University emeritus professor of law.

"There is very little incentive for the defendants to change their practices unless a finding is made that there is a nexus between the named plaintiffs and the group," he said.

WAL-MART ON DEFENSIVE

Bentonville, Arkansas-based Wal-Mart has argued it did not discriminate and that class-action status should be dismissed because the company grants its 3,400 U.S. stores a great deal of independence in their management.