By  on April 27, 2010

A federal appeals court Monday allowed a potentially landmark gender-discrimination lawsuit against Wal-Mart Stores Inc. to go forward as a class action.

The opinion stemmed from a labor suit brought by Wal-Mart employee Betty Dukes and five other plaintiffs in 2001. Their complaint alleged the retailer’s corporate structure discriminated against women in terms of pay and opportunity for promotion, among other accusations.

In its six-to-five opinion Monday, the appeals court affirmed the class-action certification, and stood by the lower court’s finding that members could seek back pay as well as injunctive and declaratory relief. However, it effectively reduced the size of the class by ruling it should comprise women who worked at Wal-Mart at the time of the initial complaint’s filing in 2001 instead of those on the payroll as early as 1998.

In 2004, the U.S. District Court for Northern California conferred class-action status in the case to female employees who had worked at domestic Wal-Mart stores since 1998. The company appealed the decision to the U.S. Ninth Circuit Court of Appeals in San Francisco. Wal-Mart, the largest private employer in the U.S., argued the potential class could encompass up to 1.5 million workers, and was too large and unmanageable.

The company said it was pleased the court’s ruling cut the size of the previously certified class by as much as two-thirds and indicated it would appeal to the Supreme Court. Separately, Wal-Mart executive vice president and general counsel Jeff Gearhart said the company disagreed with the ruling from what it called a “sharply divided” court.

“We do not believe the claims alleged by the six individuals who brought this suit are representative of the experiences of our female associates,” Gearhart said.

Attorneys for the plaintiffs estimate the class still contains more than 1 million women.

“Ultimately, the importance of this case is that the Ninth Circuit rejected Wal-Mart’s argument, which is a variant of ‘too big to fail,’” said Brad Seligman, lead attorney for the plaintiffs. He said lead plaintiff Dukes continues to work for the retailer.

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