Labor attorneys and workplace experts predicted yesterday that employers will need to consider more decisive movement to narrow pay gaps between male and female employees as a result of a judge's decision to allow a sex-discrimination lawsuit against Wal-Mart Stores Inc. to proceed to trial as a class action.
The finding that there was enough information to show that women at Wal-Mart were paid less than male counterparts in equal positions has put pay inequity back in the forefront of workplace issues. Female employees today earn an average of 77 percent of what their male co-workers do, up from 59 percent 40 years ago, according to the U.S. Census.
Although many companies do track pay inequities, the case could force employers to put equal-pay rules on a faster track than they might have previously. If a pattern of pay disparities appears to exist, companies are now reminded by the Wal-Mart case that they could become embroiled in a messy, long battle or pricey settlement.
"I think this is going to be the fuse that ignites the compensation analysis that we've never seen before," said John C. Fox, chairman of the employment and labor law group with the law firm Fenwick & West in Mountain View, Calif.
Tuesday's ruling could include as many as 1.6 million current and former female Wal-Mart employees, making it the largest private employer civil rights case in U.S. history.
Wal-Mart lawyers had argued to the judge that statistical differences in pay and positions were due to differing job aspirations and interests between men and women that exist in the general labor force, and that can't be blamed on the company.
That has been one argument used for years to explain the wage gap.
But according to a new study by Catalyst, a women's research organization, 55 percent of women and 57 percent of men want to occupy the most senior role within an organization. In addition, women who have children living with them are just as likely to want to occupy a higher position as those who don't have children living with them, the study found.
Even though more women are taking on better-paying occupations, the pay is still not equal, Department of Labor statistics show.
For instance, 15 years ago more than half of all full-time accountants and auditors were men. Today, there are 561,000 male accountants and 784,000 women. Yet male accountants earn $1,041 on average per week, while female accountants make an average of $756 per week.
There were 6,037 wage discrimination charge filings with the Equal Employment Opportunity Commission in fiscal 2003, which accounted for 7.5 percent of the EEOC's total private sector cases. The number of wage filings has remained the same over the past decade, according to a spokesman.
The average median weekly earnings of full-time male employees in 2003 was $695 a week, while women earned $552 a week on average. That means women earned 79.4 percent of men's salaries in comparable positions, according to Labor Department figures.
That gap has decreased slightly but steadily during the past 20 years. In 1993 women earned 71.4 percent of what men earned, and in 1983 it was 66.7 percent.
"This [gap] is narrowing quite slowly," said Jane E. Smith, chief executive of Business and Professional Women/USA. "It will be another 50 years before we see it disappear if it goes at the rate it's going."
Fox said he is working with three to four dozen companies to analyze their pay scales "because they got religion after hearing about what's going on," he said.
In addition, the ruling Tuesday will likely empower women at other organizations to believe they have a voice when it comes to pay equity and opportunities, perhaps forcing employers to take a second look at pay so they don't end up in litigation, labor attorneys said.
Although Wal-Mart's reputation is "not to bend to litigation," no matter what happens with the case, its effects will be felt across the workplace landscape, according to Arisa L. Lieberwitz, associate professor of labor law at Cornell University's School of Industrial and Labor Relations.
"Because Wal-Mart's so big, so enormous, so powerful . . . where there is a large lawsuit, people pay attention," Lieberwitz said. "It may be that women elsewhere can use this as a vehicle for trying to improve their situation in their own workplace."
Beyond the pay issue, the case could have a positive effect on women's careers, said Amy Oppenheimer, an attorney and workplace harassment expert based in Berkeley, Calif. "If Wal-Mart starts promoting women and allowing them to go where many of these men have gone, it's going to open lot of doors."
According to statistics gathered by an expert for the plaintiffs in the Wal-Mart case, women from the most menial positions up to top levels make less than men in the same positions. The numbers also found the number of women decrease as the level of job increases. Lawyers for the plaintiffs say Wal-Mart women were not told when higher level job opportunities opened, or they were told not to apply for certain jobs because they belonged elsewhere.
In response to the suit, Wal-Mart officials have revamped some employment practices. Among other things, the company started new job structure and pay classification earlier this month, to "maintain both internal equity and external competitiveness," according to a news release.