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Article - Wal-Mart Class Action Gender Discrimination Case Holds

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By Myron Curry, President and CEO of BusinessTrainingMedia.com
Copyright -2004

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 plaintiffs� 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:

 

  • evidence that company decision-making processes fostered or permitted the use of hunches, intuitions, or feelings
  • evidence that categorical opinions such as women don't want this kind of work influenced decision making
  • use of gender-associated stereotypes in evaluations (e.g., calling someone a sweet person, a term almost always used for women and not men)
  • features of the organizational culture that allowed gender stereotypes to influence job assignments, training, or promotions
  • an incentive and motivational system that failed to promote or reward bias-free decision-making
  • census data comparisons showing that the number of women in better paid positions was less than would be expected from the available number of qualified women in the area labor pool
  • statistical analysis of the company's personnel data system to show gender-related disparities in the chances that a man and a woman hired at the same time with equal work experience, education, and skills would be assigned to certain jobs or be paid the same
  • existence of gender-segregated job ladders or career paths Without doubt, the plaintiffs attorneys are now attempting to develop similar evidence, much of it depending on sophisticated statistical analyses, to prove gender discrimination at Wal-Mart.

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:

 

  • Women employees do not encounter any barriers to opportunity or advancement due to their gender.
  • African American employees who have the same qualifications and experience are just as likely to be promoted as employees of other ethnic groups.
  • My supervisor generally applies the same standards for performance reviews to everyone regardless of the person�s gender or race.

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 in many workplaces. 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 President and CEO of BusinessTrainingMedia.com a leading provider of workforce and business development training programs designed exclusively for corporate deployment. Myron has over 20 years of successful management experience with leading fortune 500 companies and has written numerous articles about workforce management issues. His company has provided training solutions to many of today's leading organizations, including AT&T, IBM, Bank of America, U.S. Postal Service, Disney, Sprint, Wells Fargo Bank, 3M, Cisco, Yahoo!, Amazon, City of Los Angeles and many others.

Re-print Rights: You may use this article in it's entirety, all that I ask is that you contact me with an email here: myron@business-marketing.com to let me know.