By Myron Curry
Wal-Mart is the world's largest retailer and America's single largest employer. It was, therefore, a noteworthy event in June 2004 when a federal judge expanded a lawsuit filed by six California women to a class action. The case has now mushroomed to cover 1.6 million women Wal-Mart workers, employed nationwide since 1988, making it, by far, the largest class action in U.S. history. This article looks at two questions: How will liability be determined? What can other employers learn?
In granting the case class action status, Judge Martin Jenkins indicated that Wal-Mart had for the most part failed to dispute the plaintiffs evidence that women were paid less than men in every region and in most job categories; that the salary gap widens over time even for employees hired into the same jobs; that women take longer to reach management positions; and that the higher one looks in the organization, the lower the percentage of women. Among other facts cited by the plaintiffs are that two-thirds of the company's 1.2 million U.S. workers are women, but only one-third of all managers and only 14 percent of store managers are women. As a comparison, on average, 60 per cent of the managers in general merchandise stores are women. None of these facts in themselves prove that there was intentional, systematic bias, the judge declared, but they help to support an inference that Wal-Mart engages in discriminatory practices.
Wal-Mart's defense is that the inequalities between its male and female employees resulted from factors other than unlawful discrimination. In such cases, employers typically argue that women were not interested in and/or not qualified for the higher paying jobs defenses Wal-Mart has indicated it will use.
For the most part, the same team of plaintiffs lawyers and experts (see www.impactfund.org) who have brought other very large class action discrimination cases are involved in the Wal-Mart lawsuit. Several years ago, they represented plaintiffs in a gender discrimination class action against Home Depot, which the company eventually settled for $104.5 million and an agreement to make significant changes in its treatment of female employees. Like Wal-Mart, Home Depot argued that women were uninterested in and/or unqualified for the higher paid jobs. Although the Home Depot case never went to trial, the plaintiff's experts were ready to submit the following evidence to prove that prejudice was the real reason for the difference in pay and positions between men and women:
Many knowledgeable observers predict that Wal-Mart, like Home Depot, Lucky Stores, Smith Barney, and a number of other prominent employers who have chosen to settle gender discrimination lawsuits will eventually settle. But the company is famous for its tough stance in discrimination cases, and it remains to be seen how long it will litigate this one. It's even possible it could choose to go to trial, if it can't get the class action declaration reversed, but that seems unlikely. Very few class action cases ever go to trial, although both sides prepare their evidence as if there will be a trial.
Lessons for Employers
The most reliable way for an employer to determine its vulnerability to a class action lawsuit is to gather for itself the same statistical data that plaintiffs would use. If the data show that, for example, fewer women are in higher-paying jobs than men, this is cause for further analysis. Are the rates what would be predicted based on the availability of qualified workers in the local labor pool? Are the rates in accordance with workers skills and experience regardless of their gender, etc.? Disparities in opportunities and outcomes may be due to lawful factors, such as differences in education. But employers need to beware of making assumptions about these differences that are unsupported by objective evidence.
Employee surveys are another tool for discovering the potential risk of a class action lawsuit. Survey questions such as those that follow (when correlated to data on the respondents gender, age, and ethnicity) may uncover areas of concern. These questions are intended to be answered on a scale of 1 to 5, from strongly agree to strongly disagree:
Some organizations resist this kind of self-analysis, preferring ignorance of the facts and reliance on assumptions. If self-analysis uncovers indefensible disparities in opportunities and outcomes for women or any other group based on immutable characteristics, the company would need to make substantial changes in its practices and perhaps its culture changes which some organizations prefer not to make, regardless of the liability risk.
On the other hand, audits and surveys can provide reassurance that the employer is fulfilling its obligation to provide equal employment opportunities and, most likely, also getting a higher level of productivity and performance from all its employees.
Training Reduces Exposure
Discrimination is a sensitive and costly problem that is becoming all too common throughout the workplace. By providing discrimination prevention training to your employees and managers on a regular basis, you'll reduce your organization’s expose to this costly problem and create a safer workplace.
About the Author:
Myron Curry is the President of Business Training Media, a leading provider of harassment prevention training videos for improving management and employee productivity.
Subscribe to his free Workforce Management Newsletter that’s jammed packed with informative articles, tips, case studies, white papers, downloads and more.
Reprint Policy: You may reprint / publish the above article. All we ask is that you keep all links activie, make no changes to article and include the author's bio. Article Resource: Business Training Media
Return to our Business Article Library
Browse through our extensive list of free Human Resources magazines, white papers, downloads and podcasts!