Wal-Mart Suit Gets OK
By Michele Chandler

In the largest private civil rights case in U.S. history, a San Francisco federal judge Tuesday approved a sex discrimination lawsuit against Wal-Mart involving as many as 1.6 million past and present women workers.
The ruling came in a suit filed in 2001 by six current and former California Wal-Mart employees who allege that the retail giant discriminates against its female workers in pay and promotions.

By granting class-action status to the case, U.S. District Judge Martin Jenkins' decision affects all women who worked at Wal-Mart's discount stores, Supercenters, Neighborhood Markets and Sam's Club warehouse stores after December 1998.

Wal-Mart is the nation's largest employer and owns 3,566 U.S. stores, including 10 Bay Area outlets.

The Arkansas-based retailer vowed to appeal the ruling and a spokeswoman downplayed its importance. "Let's keep in mind that today's ruling has nothing to do with the merits of the case,'' said Wal-Mart spokeswoman Mona Williams. "Judge Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action.''

Wal-Mart Chief Executive H. Lee Scott announced a new pay structure at the company's annual meeting earlier this month, saying some workers will receive pay raises and that company officers' bonuses would be tied to diversity goals.

Lawyers for the plaintiffs hailed Tuesday's ruling as leveling the playing field between female employees and Wal-Mart. "Lawsuits by individual women had no more effect than a pinprick,'' said Brad Seligman, executive director of The Impact Fund, the Berkeley-based lead counsel for the women. "Now . .. Wal-Mart will face the combined power of 1.6 million women in court.''

Pay disparities

The lawsuit alleges significant salary disparities at Wal-Mart, with men making an average of $1,400 more a year than women in the same jobs, said Jocelyn Larkin, an Impact Fund attorney.

"For a cashier, it was $700, but when you make $14,000 a year, $700 is a big deal,'' Larkin said. She noted the salary differences occur all the way up the line to regional vice presidents, where the salary gap was $150,000.

If the lawsuit succeeds, former and current Wal-Mart employees could be owed more than $1 billion in back pay alone, said Joe Sellers, another lawyer for the employees. That figure covers the difference between what the women earned and what they should have been paid, he said.

Women account for about 70 percent of Wal-Mart's current workforce of 1.2 million, but only about one-third of the company's managers are female. Wal-Mart employs a lower percentage of women managers than other retailers, the plaintiffs' lawyers said.

Workers allege access to promotions also was unfair. Rather than posting notices about management positions, the company often kept information about new jobs quiet, simply tapping the shoulder of employees it wanted to promote, according to the lawsuit.

Posting jobs

About a year ago -- after the lawsuit was filed -- Wal-Mart began posting notices of open management jobs, said Irma Herrera, executive director of Equal Rights Advocates, a San Francisco lawyers group also involved in the case.

Judge Jenkins noted that statistics from the plaintiffs "show that women working at Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time, that women take longer to enter management positions and that the higher one looks in the organization, the lower the percentage of women.''

Industry experts expect the class action to have little impact on Wal-Mart's formidable bottom line.

"This has been talked about for a while, and I think everyone understands their financial cash strength right now,'' said Jon Schallert, president of The Schallert Group consulting firm. "They definitely have the ability to compensate any of the potential victims.''

Wal-Mart shares fell 87 cents Tuesday, closing 54.06.