Home Depot USA Inc., the hardware retail giant, yesterday agreed to pay $87.5 million to settle a class action gender discrimination lawsuit brought by women employees in the company's West coast division.

The case was settled just three days before the trial was to begin in federal court in San Francisco. "This was a courthouse-steps settlement, done at the last minute," said plaintiffs attorney Mike Baller of Saperstein, Goldstein, Demchak & Baller, an Oakland, Calif., firm that specializes in class action employment litigation cases.

In a statement, Home Depot said the settlement does not represent an "admission of wrongdoing." It said the firm "maintains that it provides opportunities for all of its associates to develop successful professional careers, and is proud of its strong track record of having successful women involved in all areas of the company."

The company said it agreed to the settlement after "a court-ordered mediation demonstrated that achieving common ground was not only of interest to both sides, but desirable."

Under terms of the settlement, negotiated by Saperstein on behalf of the women plaintiffs, about 8,000 female employees will share in $65 million from the company, with the amounts they will receive depending on their work circumstances at Home Depot, and the lawyers will receive $22.5 million in fees and expenses.

This is one of the largest gender discrimination settlements in U.S. history. Other large settlements include $250 million paid by State Farm Insurance Co. in 1992, $107 million paid by Lucky Stores Inc. in 1994 and an $81.5 million settlement by Publix Super Markets Inc. early this year.

The lawsuit is one of four filed nationwide against the firm by women alleging the hardware giant discriminated against women by paying them less than men, giving them fewer raises and denying them promotions.

The U.S. Equal Employment Opportunity Commission has sought court permission to intervene in a suit filed against the company in New Orleans, which means it would seek to be included as a party to the litigation. The agency seeks to intervene in only a handful of cases nationwide each year, generally in situations where officials believe there is a larger public policy question to be addressed.

"The size of the settlement {in the San Francisco case} certainly seems to confirm the EEOC's view that there are serious employment problems at Home Depot," said Ellen Vargyas, legal counsel of the EEOC.

In its statement, Home Depot said the San Francisco settlement could lead to a favorable resolution of the other cases as well. It said the company had discussed the personnel changes it had agreed to implement as a result of the settlement with the lawyers involved in the other suits, and said it had "led to agreements in principle to also resolve those lawsuits pending final negotiations and agreement on several unresolved issues."

Some legal observers said they were surprised that Home Depot settled, noting that the company had mounted an aggressive defense strategy and had strongly denied the women's allegations. Home Depot also had protested the judge's decision to allow the case to proceed as a class action lawsuit, and had appealed the matter to the 9th Circuit Court of Appeals and then the U.S. Supreme Court. In March the justices declined to review the case, which paved the way for the lawsuit to proceed to trial.

"They had been very vigorous in their statements {that} they believed they had done nothing wrong," said Stephen Bokat, general counsel of the U.S. Chamber of Commerce and executive vice president of the chamber's litigation center.

Bokat said some companies are settling claims, even if they dispute them, because of the risks and expense entailed in fighting a class action lawsuit, which can linger in the courts for years.

That view was shared by Ann Reesman, general counsel of the Equal Employment Advisory Council, which represents about 300 large employers. "It means Home Depot made a business decision," Reesman said. "Win or lose, they'd spend a lot of money. They were in a no-win situation."

One unique aspect of the Home Depot settlement is that it will require the retailer to set up a formal system for employees, both male and female, to inform managers when they want to be considered for promotions to sales and management positions. Saperstein's firm negotiated a similar provision in the Publix settlement.