Wal-Mart said Friday that it had settled a lawsuit that accused the company of discriminating against gay and lesbian employees when it denied health insurance benefits to same-sex spouses.
A motion filed Friday by Jacqueline Cote, a former Wal-Mart associate and the lead plaintiff, and her lawyers, asked the U.S. District Court for the District of Massachusetts for approval of a class action settlement in Cote’s action. More than 1,000 people may be eligible.
Under the proposed settlement, Wal-Mart will set aside $7.5 million to compensate associates who were unable to obtain health insurance coverage for their legal same-sex spouses, as well as the costs of administering the settlement and legal fees.
Under the proposed settlement, Wal-Mart will set aside $7.5 million to pay for claims by the retailer’s associates in the U.S. and Puerto Rico who were unable to obtain health insurance coverage for their same-sex spouses from Wal-Mart from Jan. 1, 2011 to Dec. 31, 2013, as well as the costs of administering the settlement and legal fees and expenses. In 2014, Wal-Mart voluntarily made the same health insurance benefits available to same-sex spouses of its associates that it offered to opposite-sex spouses. As part of the proposed settlement, Wal-Mart commits to continuing to do so in the future.
The agreement signals that legal doctrine on discrimination against gays and lesbian is changing; discrimination against those groups will be considered a form of sex discrimination. Since federal civil rights laws prohibit sex discrimination, such a doctrine could make it easier for gay and lesbian plaintiffs to prevail in court.
In their motion for preliminary approval of the settlement, lawyers for Cote argued that she was discriminated against because she was married to a woman. Cole and her attorneys also said that Wal-Mart discriminated against her because she doesn’t conform to the stereotype that women should only marry men.
Wal-Mart didn’t endorse a particular legal theory as part of the settlement and it didn’t move to dismiss the case on grounds that the arguments were flawed.
Sally Welborn, senior vice president of global benefits at Wal-Mart, said, “We’re happy both sides could come together to reach a resolution. Respect for the individual, diversity and inclusion are among the core values that made Wal-Mart into the company that it is today. We will continue to not distinguish between same and opposite sex spouses when it comes to the benefits we offer under our health insurance plan.”
“I’m pleased that Wal-Mart was willing to resolve this issue for me and other associates who are married to someone of the same sex,” Cote said. “It’s a relief to bring this chapter of my life to a close.”
Cote was represented by LGBTQ Legal Advocates and Defenders, Outten & Golden LLP, the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, and Arnold & Porter LLP.
Jonathan Smith, the Washington Lawyers’ Committee’s executive director, said, “We believe the proposed settlement is fair and reasonable and are pleased we could announce it today.”