San Francisco A divided federal appeals court on Monday exposed Wal-Mart Stores to billions of dollars in legal damages when it ruled a massive class-action lawsuit alleging gender discrimination over pay for female workers can go to trial.
Wal-Mart had asked the Ninth Circuit Court of Appeals in San Francisco to undo class-action certification in what could be the largest sexual discrimination lawsuit in the nation's history. The suit argues that female workers were paid less and received fewer promotions at Wal-Mart than male counterparts, and that the retailer's corporate structure fostered this gender discrimination.
In its 6-5 ruling on Monday, the court agreed with a lower court's ruling. It said the female workers can bring claims for injunctive and declaratory relief and back pay through a class-action lawsuit.
The Ninth Circuit sent back to the district court the claims for punitive damages.
The suit originated with a Wal-Mart worker named Betty Dukes who sued for sexual discrimination in 2001 with six other plaintiffs in a class-action lawsuit that extended the case to all women who had worked at the company since 1998. A trial judge certified the case as a class-action matter in 2004.
Wal-Mart has fiercely fought the lawsuit since it was first filed. The company, which employs some 2.1 million workers in approximately 8,000 stores worldwide, argued that the conventional rules of class-action suits should not apply because each outlet operates as an independent business. Since it doesn't have a companywide policy of discrimination, Wal-Mart argued that women alleging gender bias should file individual lawsuits against individual stores.
The company also had argued that the number of litigants that the lawsuit purports to represent is too big to defend.
The ruling Monday may have trimmed the number of women who stand to collect damages if Wal-Mart is found liable. The appeals court ordered the trial judge to determine whether the lawsuit should date to 1998, as alleged in the complaint, or to 2001 when it was filed.
The attorneys suing Wal-Mart were quick to respond to the court’s ruling on Monday.
"It upheld the heart of the case," said Brad Seligman, the lead lawyer suing Wal-Mart.
A Wal-Mart representative is preparing a statement.