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Wal-Mart fears class-action status

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Six women are suing Wal-Mart, claiming gender bias. They want class-action status for the suit.

Six women are suing Wal-Mart, claiming gender bias. They want class-action status for the suit.

Danny Johnston, Associated Press

LITTLE ROCK, Ark. — Of the thousands of lawsuits that target Wal-Mart Stores Inc., none worries the company more than the charge by six former employees that the country's largest private employer discriminates against women.

A federal judge in San Francisco will hear lawyers argue today for the suit to be elevated to a class action — a move that could add 1.5 million plaintiffs and make the lawsuit against the nation's biggest retailer the largest of its kind.

"I would say it is the most important because of the sheer scope of it. It is No. 1 on our radar screen right now," Wal-Mart spokeswoman Mona Williams said, noting that the company is the target of 6,649 active lawsuits of all sorts.

The women claim Wal-Mart, based in Bentonville, Ark., discriminated against them in pay and promotions because of their gender. They say the company's tight central control of its 3,468 stores and 1.1 million employees in the United States can only mean that that Wal-Mart culture favored men over women in pay and status.

The company acknowledges that there have been individual instances of employees being treated unfairly but denies that any discrimination filtered down from headquarters in northwest Arkansas.

The lawsuit, filed in 2001, seeks an order ending discriminatory practices at Wal-Mart and lost wages, though lawyers did not list a dollar amount. The suit names Betty Dukes, Micki Earwood, Kimberly Miller, Stephanie Odle, Sandra Stevenson and Patricia Surgeson as plaintiffs. A seventh original plaintiff has dropped out.

The lawsuit includes statements from women across the country who claim they were subject to unfair treatment. Some were promoted to management but claim they were still kept from moving up to the levels they deserved because they are women.

Ramona Scott, who worked as a personnel manager for Wal-Mart stores in Pinellas Park, Fla., and as a customer service manager in St. Petersburg, said in court papers that department employees were segregated by gender — men in electronics and sporting goods with women at the registers — and that the majority of managers were men.

When she recommended a female cashier for a merit raise, the store manager turned it down, saying, "Men are here to make a career and women aren't. Retail is for housewives who just need to earn extra money."

Later, she recommended that a male employee not be given a raise, but was told by an assistant manager that the man had a family to support.

"I pointed out that I, too, had a family to support, I was a single mother, but he just walked away. I did not receive a raise," she said in court papers.

Scott left the company in 1998, not long after a male manager told her that to get along with him, "I needed to behave like his wife," she said, which meant waiting on him and bringing him coffee.

U.S. District Judge Martin Jenkins is expected to hear several hours of arguments today, but not immediately rule. The plaintiffs want the suit open to current and former female workers dating back to 1998.

Whichever way the judge rules, it's far from the final word. Plaintiff attorney Brad Seligman of Berkeley, Calif., predicts the loser will appeal the decision to the 9th U.S. Circuit Court of Appeals.

Still, Perry Binder, an assistant professor of legal studies at the Robinson College of Business at Georgia State University in Atlanta, said the ruling will be critical for both sides.

"Any time a class gets certified, there is power in unity," Binder said. To get that leverage point, he said, the plaintiffs have to come up with "smoking gun documents."

The plaintiffs say their data show that only 14 percent of Wal-Mart store managers — the top job at local stores — are women. Overall, more than 50 percent of competitors' managers are women, but Wal-Mart is at about 35 percent, the plaintiffs claim.

They also say that women in Wal-Mart's management are paid less. Male store managers average a salary of $105,682 — 18 percent more than the $89,280 female managers average.

Williams disputed the plaintiffs' interpretation of the figures, saying Wal-Mart's promotion rates of women show the company has "more opportunities for women than any other employer in the country."

Wal-Mart has warned investors that the suit could be costly. In its latest quarterly filing with the Securities and Exchange Commission, the retailer cautioned that it could incur "increased costs of operations on an ongoing basis" if the plaintiffs prevail. The filing says the case could result in a judgment or negotiated settlement that could affect Wal-Mart's bottom line.

Williams said any worker who perceives unfair treatment can use Wal-Mart's open-door policy to work up the chain for satisfaction.

"We are a very decentralized company, and store managers have a lot of discretion when it comes to decision-making," she said. "With more than 3,000 stores, there are occasional errors in judgment."

Seligman said the opposite is true — that store visits by Wal-Mart executives, real-time computer analysis and Bentonville training sessions for far-flung store managers all telegraph a central point of control.

"For class-certification purposes, is there a common dispute here? Clearly, there is," he said.