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While we are glued to our TV’s awaiting the outcome of the state budget there is a major employer who is facing a sex discrimination/class action lawsuit where the US Supreme Court will hear oral arguments next week. I refer to Dukes v. Wal-Mart, brought by six women, a day in court that has been lingering for the past decade.
Following text is from Nina Martin of New America Media. The story link, included in the latest CA Progress Report, is provided below.
“This is a sex-discrimination case brought by six California women on behalf of female employees at Wal-Mart and Sam’s Club stores across the country. The lead plaintiff, Betty Dukes, started working at the company in 1994 and still works at a Wal-Mart store in the town of Pittsburg, outside San Francisco.
The women’s claims are that: 1) they get paid less than men for doing the same jobs, and 2) the company denies them promotional opportunities even when they are better qualified and have more years of service than male co-workers. One of the things women told us repeatedly is they would train men who started working at Wal-Mart way after they did, and these men would become their supervisors. The women would think, “Wow, how unfair is that.”
Wal-Mart is a company that prides itself on promoting from within. But the women we surveyed reported innumerable obstacles when they tried to move into managerial positions, as well as discrepancies in pay that got wider and wider. At the management trainee level, women earned an average of $22,400, versus $23,200 for men. At the store manager level, it was $89,000 versus $105,000. By the time they reached the regional vice president level, women were earning $279,772, while men were averaging $419,000.
The issue before the Supreme Court is whether the lawsuit should be allowed to continue as a class action. Why is this issue so important, in the Wal-Mart case and beyond?
In many instances, problems in a workplace are so widespread that it is not feasible for individuals to bring separate lawsuits. Some situations call for systemic change. Wal-Mart is the largest private employer in the world. It is not a good use of court resources for thousands of separate suits to be brought by women who may have been shortchanged $2,000 a year, not to mention that an individual in that situation would never be able to find a lawyer to represent her. The injustice and violation of law would then persist year in and year out.
In order to be certified as a class, the plaintiffs had to show that Wal-Mart’s practices were widespread and affected large numbers of women. To do this, the legal team gathered evidence from many, many women around the U.S. In 2004, the federal court in San Francisco allowed the suit to proceed on behalf of more than 1 million current and former Wal-Mart employees. The Ninth Circuit Court of Appeals has upheld the class certification three times.
This is a case that seems especially important in the current economic climate— people are desperate for work, unions are under siege, and companies have more leverage than ever, especially in nonunion industries or states.
It’s true these are very challenging times for all workers, but especially true of low-wage workers. It used to be that many employees had unions, which collectively could demand fair wages and better treatment of workers. But there are no unions at Wal-Mart, and there, as at most other companies today, employees are on their own.
Wal-Mart started out in a small town in the South, and I think that many of its policies and practices are rooted in its origins. Historically, Wal-Mart’s senior managers embraced the notion that women are not the primary breadwinners. When some of our clients asked why John Doe was paid more than she was, it was not uncommon for her to be told, “Because he has a family to support”—even when the worker was herself the sole breadwinner in her family A number of key people also held the view that women weren’t interested in advancing to management, they were perfectly content to remain in entry-level jobs.
What is Wal-Mart’s argument against allowing the class action to proceed?
Wal-Mart’s main contention is that women workers across 3,400 stores and 170 different job classifications cannot possibly have enough in common to be treated as a class. But as an interesting aside, Wal-Mart was a lead plaintiff in an antitrust class action brought on behalf of 8 million merchants, suing Visa and MasterCard. In that instance size wasn’t an obstacle to proceeding as a class action.
Do you think much has changed in Wal-Mart since the suit was filed in 2001?
One positive effect of litigation is that most defendants immediately begin addressing the problems that are at the root of the lawsuit. Wal-Mart did begin changing some of its practices after the case was filed. It created a promotion system whereby employees can learn about management openings, instead of waiting for a tap on the shoulder from their boss. It created a diversity office and tied compensation for senior managers to meeting diversity goals. It created a global women’s leadership council. And it restructured its overall compensation system, which hopefully has addressed some of the disparities that exist.
We know these things because they are reported in the press. The information collected in the course of the lawsuit itself is now several years old. After the Supreme Court ruling, which is expected in June, the case will go back to the lower courts, there will be more discovery, and we’ll get an accurate picture of how much Wal-Mart has actually changed. Maybe Wal-Mart has gotten better. If so, that’s great. That’s what this lawsuit is all about.”
http://www.californiaprogressreport.com/site/node/8804
Juice readers: “In 1963, Congress passed the Equal Pay Act (“EPA” or the “Act”) as an amendment to the Fair Labor Standards Act, to “prohibit discrimination on account of sex in the payment of wages by employers.” Congress included within the text of the EPA a clear and concise policy statement and briefly described the problems it was intended to remedy. The clear statement of congressional intent and policy guiding the EPA’s enactment indicate the Congressional desire to fashion a broad remedial framework to protect employees from wage discrimination on the basis of sex. The Supreme Court has expressly recognized the view that the EPA must be broadly construed to achieve Congress’ goal of remedying gender discrimination. Congress passed the EPA out of “concern for the weaker bargaining position of women” to provide a remedy to discriminatory wage structures that reflect “an ancient but outmoded belief that a man, because of his role in society, should be paid more than a woman.” The EPA protects both men and women. It also protects administrative, professional and executive employees who are exempt under the Fair Labor Standards Act.
The EPA, Section 206(d)(1), prohibits “employer[s] … [from] discriminat[ing] … on the basis of sex by paying wages to employees […] at a rate less than the rate [paid] to employees of the opposite sex […] for equal work on jobs [requiring] equal skill, effort, and responsibility, and which are performed under similar working conditions[.]” To establish a prima facie case under the EPA, an employee must show that:
- different wages are paid to employees of the opposite sex;
- the employees perform substantially equal work on jobs requiring equal skill, effort and responsibility; and
- the jobs are performed under similar working conditions.
The EPA provides that the employer may not pay lower wages to employees of one gender than it pays to employees of the other gender employees within the same establishment for equal work at jobs that require equal skill, effort and responsibility, and that are performed under similar working conditions.”
Gilbert note: It will be interesting to see how the court rules in this matter as it relates to permitting a nationwide “class action” claim. We are talking some huge numbers. Wal-Mart, the world’s largest retailer, has over two million employee/associates in 8,400 stores.
I don’t feel much suspense on this one. The 5-member REPUBLICAN majority on the politicized Supreme Court, while maybe unpredictable on civil liberties, is dependable for ruling that corporations can do no wrong.
I’d be thrilled to be wrong about that.
Vern. You might be surprised.
Note: I did edit some of the article text and provided the full story link
Vern, I am sure that you are not troubled at all the unions sue challenging the proposed construction of EVERY WalMart in California on generally baseless environmental grounds – the real purpose of the suits has nothing to do with protecting the environment, simply the unions imposition of punishment for WalMart’s use of a non union work force.
Speak of the devil:
Dear Vern,
We want to alert you to breaking news regarding Walmart’s bid to take control of Massmart, South Africa’s third largest retailer. In a surprising turn of events this week, the South African government’s Competition Tribunal ordered the hearing on the proposed merger delayed for almost two months.
This delay came as three key departments of the South African national government urged the Tribunal to postpone the hearing. These departments had been in what they thought were good faith negotiations with Walmart around its public commitments, expecting the company to back up its pronouncements with real commitments.
On March 3, these departments were quoted in Business Report saying
[Walmart’s] ‘willingness to co-operate in an attempt to alleviate [our] concerns’ faded significantly last month after the Competition Commission recommended unconditional approval for the proposed merger.
According to Bloomberg “the government told the court that the proposed purchase raised ‘very significant public interest issues, and might not be capable of being justified.’”
Workers, local suppliers, the small business community, and the South African government are now asking difficult questions about whether Walmart’s entry is really in the best interest of South Africa. Many are concerned that if Walmart is allowed to enter South Africa without making binding commitments, it will have the same devastating effect on workers, suppliers, and the economy in South Africa that it has had in the United States and other countries.
This news will likely be of particular interest to urban cities across the United States—like New York, Washington, D.C., and San Diego—that are working against Walmart’s aggressive drive to enter their communities without conditions that ensure the retailer lives up to its promises.
Vern. What goes around comes around.
when I was a bit younger we shopped at a local mom and pop store where they extended us credit until our dad got his paycheck. Along came the great A&P chain which put many of the mom and pops out of business as they couldn’t compete.
Fast forward to the original “big box” stores which have been taking business away from the local Ralph’s, Albertsons and Vons supermarkets. Nest step. Add food for sale sections in the big box Super Centers such as our nearby Target store which takes another slice of the very close margin pie to the point where people are starting to rebel against this “one stop” shopping experience. The Ralph’s and friends are worried about the big box expansion in to foods and have lobbied to stop the Super Centers.
The locals are concerned. Go into Costco where, in addition to electronics, bakery, butcher, food and clothing, you can get everything from prescription eye glasses, tires, liquor, cell phones, jewelry, prescription drugs, hot dogs, pizza and gasoline to books and Christmas wrapping paper. Look at all the mom and pop businesses that have been wiped out in the process.
Truth be told you will find me grabbing a pizza or other items at their stores.
So for all those who want to bring jobs back to America can you explain to us why you shop at Wal-Mart purchasing their imported goods?
“The Ralph’s and friends are worried about the big box expansion in to foods and have lobbied to stop the Super Centers.”…”Look at all the mom and pop businesses that have been wiped out in the process.”
Wait a second; isn’t this just the good ol’ free market doing it’s thing? You wouldn’t want the government to step in to help the Ralphs and the “Mom and Pops” now, would you?
anon. You’re correct. It is the “free” market.
I smile in reflecting back when the big kid on the block, A & P, drove the mom and pops out of business only to have his clock cleaned by the big box stores as they arrived on the scene. There was no Target and/or Costco/Sams Club when I grew up in Newark.