Wal-Mart Women Vow to Press Bias Fight in Lower Court, U.S. Rights Agency

The women who sought to sue Wal-Mart Stores Inc. (WMT) for gender bias on behalf of 1.5 million co-workers said they will press their fight against the nation’s largest private employer in smaller lawsuits in lower courts and claims with the U.S. Equal Employment Opportunity Commission.

The U.S. Supreme Court yesterday said the women failed to prove the world’s largest retailer had a nationwide policy that led to gender discrimination. The court deprived them of the leverage a nationwide suit brings, both in pooled legal resources and a potential multibillion-dollar verdict, forcing them to pursue claims on their own.

“When I go back to work tomorrow, I’m going to let them know we are still fighting,” said Christine Kwapnoski, an assistant manager at a Sam’s Club in Concord, California. She had accused a male manager of yelling at female employees and telling her to “doll up” by wearing more makeup and dressing better while working on a loading dock.

Wal-Mart may now face thousands of lawsuits nationwide and claims of discrimination before federal agencies as plaintiffs’ lawyers fan out to courts across the country to file new complaints on behalf of members of the failed group suit.

Photographer: Zhang Jun/Xinhua/Photoshot/Newscom

Betty Dukes, center, one of the six named plaintiffs, speaks to the media outside the U.S. Supreme Court in Washington D.C., March 29, 2011. Close

Betty Dukes, center, one of the six named plaintiffs, speaks to the media outside the... Read More

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Photographer: Zhang Jun/Xinhua/Photoshot/Newscom

Betty Dukes, center, one of the six named plaintiffs, speaks to the media outside the U.S. Supreme Court in Washington D.C., March 29, 2011.

Kwapnoski and others pressing their suit claimed they were victimized by Wal-Mart’s practice of letting local managers make subjective decisions about pay and promotions. More than 100 employees filed sworn statements saying they were paid less and given fewer opportunities for promotion than male colleagues.

Women seeking advancement were required to commit in writing to overnight shifts for two years, while men were only required to rotate through such positions on a six-month basis, one former worker claimed.

Retail for Housewives

(For a related story on the Supreme Court ruling’s impact on class action litigation, click here. To read a story on how it may affect defenses against employee claims, click here. For a story on how the decision may affect company bias policies, click here.)

When one woman inquired about the higher wages paid to men who had the same or less seniority, she was told that “retail is for housewives who just need to earn extra money,” and “he has a family to support,” according to one declaration by a former Wal-Mart employee in Florida.

Wal-Mart said yesterday that the high court ruling “effectively ends this class-action lawsuit.”

“As the majority made clear, the plaintiffs’ claims were worlds away from showing a companywide pay and promotion policy,” Wal-Mart, led by Chief Executive Officer Mike Duke, said in a statement.

Wal-Mart rose 25 cents to $53.29 in New York Stock Exchange trading.

The workers “provide no convincing proof of a companywide discriminatory pay and promotion policy,” Justice Antonin Scalia wrote for the majority. All nine justices voted to overturn a lower-court ruling that approved the class action, with four of them saying they would have ordered further proceedings.

Unbalanced Promotions

Betty Dukes, another lead plaintiff who began working at a Pittsburg, California-based Wal-Mart store in 1994, said she noticed early in her career that “it was not balanced” when it came to promotions.

“The men at my store were being promoted more often than the woman for the same positions, and many of those positions were never openly posted,” she said in a telephone interview. Promotion opportunities were disclosed by management, which was predominantly male, she said.

Filed in 2001, the suit aimed to cover every woman who worked at the retailer’s Wal-Mart and Sam’s Club’s stores at any point since December 1998, including those not hired until years after the suit was filed. A federal appeals court had let the suit go forward on behalf of women who were working at Wal-Mart at the time the suit was filed.

Twenty Companies

More than 20 companies supported Wal-Mart at the Supreme Court, including Intel Corp. (INTC), Altria Group Inc. (MO), Bank of America Corp. (BAC), Microsoft Corp. (MSFT) and General Electric Co. (GE)

The Supreme Court ruling limits the ability of plaintiffs’ lawyers to win multimillion-dollar damages through a single lawsuit, particularly against employers. Units of Cigna Corp. (CI), Goldman Sachs Group Inc. (GS), Bayer AG (BAYN), Toshiba Corp. (6502), Publicis Group SA, Deere & Co. (DE) and Costco Wholesale Corp. (COST) all face gender discrimination complaints that seek class-action status.

Four justices -- Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan -- said they would have returned the case to a lower court and let the workers try to press a class action using a different legal theory.

The lead attorneys for the plaintiffs are Joseph Sellers of Cohen Milstein Sellers & Toll and Brad Seligman of the Impact Fund, which describes itself as a foundation that handles public interest litigation.

Aggrieved Workers

They said they would seek a way around the Supreme Court ruling, moving ahead with claims on behalf of aggrieved workers, either as individuals or as part of smaller groups.

“This case is not over,” said Seligman. “Wal-Mart is not off the hook. There are thousands of claims of discrimination that remain to be filed.”

The case was one of the most closely watched Supreme Court business disputes in years, in part because the justices hadn’t looked at the standards for certifying a class-action suit in more than a decade.

Women’s advocates called on Congress to enact new legislation protecting the rights of female workers in light of the high court decision.

“With this decision, the Supreme Court has assisted Wal- Mart in its efforts to systematically dole out promotions and pay raises on the basis of sex,” said Terry O’Neill, president of the National Organization for Women.

Washington Protest

At a protest against the ruling today in front of the Supreme Court in Washington, about 100 demonstrators called for passage of the Paycheck Fairness Act, legislation intended to address pay inequity issues tied to gender.

Allison Grady, a protester with the Feminists Majority Foundation, said the demonstrators “wanted to be able to show that we were standing with the women of Wal-Mart.”

White House spokesman Jay Carney yesterday declined to comment on the case, while saying President Barack Obama supports proposed federal legislation to ensure pay equity for women in the workplace.

“We still are determined to go forward to present our case in court,” said Dukes, the lead named plaintiff in the case. “We believe we will prevail there.”

She and her co-plaintiffs alleged the world’s biggest retailer discriminated against them on the basis of their sex by denying them equal pay or promotions, in violation of 1964 civil rights law. The court didn’t rule the company discriminated.

Stephanie Odle, 39, who initiated the lawsuit after being fired from a Sam’s Club in 1999, said yesterday was a “great day” for big business.

“It shows how the legal system works,” Odle said in a telephone interview. “But I know in my heart that I made a difference. I didn’t get the outcome we wanted, but the minute that we filed the lawsuit, we started getting changes in pay and promotions.”

Trumped-Up Charge

Odle was working as an assistant manager in a Sam’s Club in Lubbock, Texas, when she was fired.

“They trumped up a charge and terminated me to give the job to a man,” she claimed.

Odle now owns her own business in Norman, Oklahoma. She was one of the original six plaintiffs who pursued the class action against Wal-Mart. She was dropped as a named plaintiff after a lower court decided all the class representatives needed to be from California.

Odle said she worked for Sam’s Club for eight years, in stores in several states.

“I’ve seen the discrimination, no matter what state you’re in, no matter what region,” she said. “I gave up my right to sue individually” while the class action was pending, Odle said. “Now I go back and sue them individually.”

‘Range of Options’

“We had prepared for a whole range of options,” attorney Sellers said in an interview. “We began weeks ago preparing thousands of charges to be filed with the EEOC,” referring to the U.S. Equal Employment Opportunity Commission, which pursues workplace claims on behalf of employees.

Lawyers for the woman will try to pursue “some more narrowly drawn, tailored classes,” the lawyer said. “The case becomes splintered. You end up with multiple cases where Wal- Mart’s practices are being challenged.”

Federal lawsuits and claims before the EEOC won’t be stopped by the statute of limitations, which places a time limit on lawsuits, he said, because it was delayed while the proposed class action was pending.

Sellers and co-counsel Seligman said they would be pursuing individual actions against the company, and possibly smaller class actions.

They may also go back to the federal court in San Francisco where the claim was originally filed, seeking a narrowly drawn case of California plaintiffs, he said, and bringing lawsuits with different arguments in different jurisdictions.

“This will be a multi-front sort of battle,” he said. “There are a number of options still available -- none of them are as efficient” as a nationwide class action.

Contingency Fee

Since class action litigation is prosecuted on a contingency fee basis -- lawyers get paid when the client wins - - lawyers for the plaintiffs said they will continue to finance the litigation.

“We’re in it to see this thing to a successful conclusion,” Sellers said, adding that $3 million in expenses have already been paid. “Millions of dollars in attorneys fees have been expended and we haven’t been paid a penny.”

The cost of defending thousands of lawsuits in hundreds of courthouses may be expensive for Wal-Mart as well.

“Wal-Mart may regret the day” it sought a rejection of class certification, Seligman said. “Wal-Mart is not off the hook.”

The case is Wal-Mart Stores v. Dukes, 10-00277, U.S. Supreme Court (Washington).

To contact the reporters on this story: Karen Gullo in San Francisco federal court at kgullo@bloomberg.net; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Greg Stohr at the U.S. Supreme Court in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net and.

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