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Wal-Mart Discrimination Case Back in Court

Attorneys for former female employees of the chain filed the first of what they said would be an “armada” of smaller, regional class action lawsuits.

WASHINGTON — The gender discrimination case against Wal-Mart Stores Inc., turned down by the U.S. Supreme Court in June, entered a new chapter in the lower courts Thursday as attorneys for former female employees of the chain filed in U.S. District Court of Northern California in San Francisco the first of what they said would be an “armada” of smaller, regional class action lawsuits.

This story first appeared in the October 28, 2011 issue of WWD.  Subscribe Today.

The attorneys in the Dukes vs. Wal-Mart case filed an amended complaint in the district court that largely encompasses Wal-Mart’s regional stores in California and an estimated 95,000 current and former female employees who worked at Wal-Mart and Sam’s Club stores from December 1998 to the present, according to lead co-counsel Brad Seligman of the Impact Fund, based in Berkeley, Calif. The women are seeking injunctive relief, back pay and punitive damages.

Seligman said Wal-Mart operates 200 stores in the California region and employs more than 70,000 people in those stores.

“We’re back,” Seligman said at a press conference. “We’re happy to announce that we have filed this morning a new amended complaint in the case Dukes vs. Wal-Mart, starting the next stage of the now decadelong struggle against discriminatory pay and promotion policies at Wal-Mart.”

In June, the U.S. Supreme Court ruled in favor of Wal-Mart Stores Inc., stopping what would have been one of the largest gender discrimination class action lawsuits in history from moving forward. The high court said the case could not advance as a class action because the plaintiffs did not meet the critical legal standard of commonality, which could have potentially encompassed 1.5 million current and former female Wal-Mart employees and exposed the nation’s largest retailer to billions of dollars in liability.

Wal-Mart’s appeal to the Supreme Court stemmed from a lawsuit filed in 2001 by Betty Dukes and five other female employees alleging the company’s corporate structure discriminated against women regarding pay and promotions, among other accusations. Wal-Mart argued that it has a strict company-wide policy that bars discrimination.

“As we have said all along, these claims are unsuitable for class treatment because the situations of each individual are so different, and because the claims of these five plaintiffs are not representative of the thousands of women that work at Wal-Mart,” a Wal-Mart spokesman said Thursday. “The fact is, the statewide class that the plaintiffs’ lawyers now propose is no more appropriate than the nationwide class that the Supreme Court has already rejected.”

Noting that Wal-Mart believes “anyone who feels they have been treated unfairly should have their day in court,” the spokesman said, “We’re ready to defend our record because it’s a record to be proud of. In fact, nearly 200,000 female associates have worked for the company 10 years or more, we have twice the number of female officers compared with the Fortune 500 average and 20 percent of our board of directors are women, compared to 15 percent for Fortune 500 companies.”

In 2004, the U.S. District Court for Northern California conferred class action status in the case to current and former female Wal-Mart employees dating back to 1998. A sharply divided U.S. Ninth Circuit Court of Appeals in San Francisco ruled in April 2010 that the gender discrimination complaint could go to trial as a class action. The ruling affirmed the lower court’s certification and also allowed members to seek back pay and an injunction.

Thursday’s action marked a new phase in what the attorneys for the women said meets the new class action certification standards laid out by the Supreme Court.

“The Supreme Court did not rule that Wal-Mart was off the hook,” Seligman said. “It made a procedural ruling that said that a national class couldn’t go forward under the standards.”

He said the newly amended complaint has many differences from the original complaint. Seligman pointed to a new regional focus, as opposed to the national focus in the first case, and new evidence, facts and statistical analyses that were not part of the case before the Supreme Court that focuses on the conduct of the store, district and regional managers in the California region who made pay and promotion decisions.

He said evidence outlined in the new complaint shows that Wal-Mart’s key decision makers “harbored a discriminatory attitude” toward women, based on a meeting in 2004 where Wal-Mart managers allegedly met with senior corporate officials and were allegedly told the key to leadership is focus and “men are better at focusing” than women.

“This is going to be the first of an armada of cases we will bring alleging a pattern of discrimination of pay and promotion, but focusing on local decision making in the areas where the key decisions were made,” said Joseph Sellers, co-counsel for the plaintiffs with the law firm Cohen Milstein Sellers & Toll. “We expect to bring cases in the areas where we found, based on the evidence at hand, systemic discrimination is the strongest. We expect to file cases in the next three to six months.”