Walmart v. Dukes Pits the Retailer Against Class Action Discrimination Lawsuit

By Laura Heller, dealnews writer

After 10 years of battling in the courts, the world's largest retailer is about to go before the U.S. Supreme Court to halt the progress of what could become the largest class action sex-discrimination suit in the country's history. While Walmart's millions of shoppers may never be aware of the case, they will likely be affected by the outcome of the decision in a number of ways — because of the amount of money the case will cost to argue (not to mention any settlements), the management changes it may bring about, and the precedent it may set that affects all as citizens.

The long history of the case, known as "Walmart vs. Dukes," began when Betty Dukes started working as a cashier in a Pittsburg., Calif., Walmart store. She later claimed she was denied advancement opportunities. An ambitious attorney, Brad Seligman, used Dukes as the lead plaintiff in a case bolstered by the stories of several woman claiming discrimination against the retailer. In 2004, a federal judge ruled the case could move forward as a class action, opening the plaintiff pool up to include more than a million women.

The case has moved up through the court system, with Walmart fighting the class action status all the way — it could cost the company billions of dollars when the final tally is counted. There are lots of legal ramifications here, including how class action suits can be filed going forward.

Last year, Walmart reported sales of $419 billion and employed more than two million people. It has always fought lawsuits, even seemingly inconsequential ones, refusing to set a precedent for litigious parties. But discrimination suits, no matter how small, have a way of changing how companies do business. And since Walmart is the largest single private employer in the U.S., odds are good that a great many American women and minorities have either worked or shopped there.

According to the Los Angeles Times, a researcher hired by Zeligman found that women make up two-thirds of the hourly employees at Walmart but fewer than 14% of store managers. And in nearly every job category, women consistently earned less than men, regardless of their seniority.

The suit also identifies a pattern of discrimination at Walmart that it says is due to entrenched practices. Employees describe meetings at Hooters and strip clubs, and that the "old boys club" was alive and thriving. Anyone who has ever worked in the retail industry, this reporter included, has likely had similar experiences, not just with Walmart executives but those in leadership positions across the industry. This isn't to excuse any actions, nor are there any outrageous stories to share from personal experience, but as a woman reporting on the retail industry for 15 years, I can attest to a general reluctance to embrace a more modern view of gender roles and equality.

Women leaving Walmart for positions elsewhere would often say, off the record, "this is a difficult place to work for a woman."

The company claims to have cleaned up its policies and says there's no difference in pay between male and female employees at 90% of its stores. Walmart has made it easier for employees to seek promotions, created a diversity office, a women's leadership council and restructured compensation.

The Supreme Court will hear Walmart v. Dukes on March 29 and decide whether the case can proceed as a class action. Regardless of the decision, it shouldn't change anything about the way Walmart does business right now. That's already happened, and constant public pressure continues to bring about changes in hiring, benefits, pay and the treatment of workers. There are other less definable benefits as well. When companies integrate different groups into the corporate culture, creativity and innovation often flourish.

But a judgment against Walmart in a class action suit could have an impact, not just on the company but its customers and shareholders, many of whom are the very employees named in the suit. A payout of millions or billions of dollars wouldn't break the company, but it wouldn't go unnoticed either.

Raising prices to boost profits is an unlikely scenario; Walmart must remain competitive and its every day low price policy won't go away, but it could be a more interesting and profitable place to work. All of this does prove that for a small town, everything that comes out of Bentonville, Ark., is awfully big.

Laura Heller is a freelance writer based in Chicago who specializes in mass market retail trends and consumer electronics industries. You can follow her on Twitter@lfheller. You can also sign up for an email alert for all dealnews features.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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