Wal-Mart sex bias case faces 'supreme' hurdle

The United States Supreme Court on Tuesday questioned a massive sex discrimination lawsuit on behalf of at least 500,000 women claiming that Wal-Mart favours men over women in pay and promotions.

The justices suggested that they are troubled by lower-court decisions allowing the class-action lawsuit to proceed against the world's largest retailer.

Justice Anthony Kennedy, often a key vote on the high court, said he is unsure "what the unlawful policy is" that Wal-Mart engaged in to deprive women of pay increases and promotions comparable to men.

Billions of dollars are at stake in the case.

Class actions create pressure on businesses to settle claims and create the potential for large judgements.

Wal-Mart denies it discriminates against its female employees.

But Joseph Sellers, the lawyer for the women, said that lower courts were persuaded by statistical and other evidence put forth so far in the 10-year-old lawsuit.

Sellers' claim

Sellers said a strong corporate culture at Wal-Mart's Bentonville, Arkansas, headquarters that stereotyped women as less aggressive than men translated into individual pay and promotions decisions at the more than 3,400 Wal-Mart and Sam's Clubs stores across the country.

"The decisions are informed by the values the company provides," Sellers said.

Justice Antonin Scalia said he felt "whipsawed" by Sellers' description. "Well, which is it?" Scalia asked. Either individual managers are on their own, "or else a strong corporate culture tells them what to do", he said.

Theodore Boutrous Jr, representing Wal-Mart, said that the class-action nature of the case deprives the company of its legal rights because it is being forced to defend the treatment of women employees regardless of the jobs they hold, or where they work in the Wal-Mart chain.

"There is absolutely no way there can be a fair process here," Boutrous said.

He pointed to a group of at least 544 women who serve as store managers who "are alleged to be both discriminators and victims".

Justice Ruth Bader Ginsburg said that at this stage of the lawsuit, the issue is not proving discrimination, but showing enough evidence to go forward.

"We're talking about getting a foot in the door," Ginsburg said, a standard she called not hard to meet.

The 78-year-old justice, who made her name by bringing discrimination claims, said it was possible that Wal-Mart could refute the claims at a trial.

But several of her colleagues appeared to agree with Boutrous that even subjecting Wal-Mart to a trial would be unfair.

A decision should come by summer.

Could cost billions

At stake is whether the suit can go forward as a class action that could involve 500,000 to 1.6 million women, according to varying estimates, and potentially could cost the world's largest retailer billions of dollars.

The case's potential importance goes well beyond the Wal-Mart dispute, as evidenced by more than two dozen briefs filed by business interests on Wal-Mart's side, and civil rights, consumer and union groups on the other.

The question is crucial to the viability of discrimination claims, which become powerful vehicles to force change when they are presented together, instead of individually.

Class actions increase pressure on businesses to settle suits because of the cost of defending them and the potential for very large judgments.

Columbia University law professor John Coffee said that the high court could bring a virtual end to employment discrimination class actions filed under Title VII of the Civil Rights Act of 1964, depending on how it decides the Wal-Mart case.

"Litigation brought by individuals under Title VII is just too costly," Coffee said. "It's either class action or nothing."

Illustrating the value of class actions, Brad Seligman, the California-based lawyer who conceived of and filed the suit 10 years ago, said the average salary for a woman at Wal-Mart was US$13,000, about US$1,100 less than the average for a man, when the case began.

"That's hugely significant if you're making US$13,000 a year, but not enough to hire a lawyer and bring a case."

The company has fought the suit every step of the way, Seligman said, because it is the "biggest litigation threat Wal-Mart has ever faced".

A trial judge and the federal appeals court in San Francisco, over a fierce dissent, said the suit could go forward.

The suit, citing what are now dated figures from 2001, contends that women are grossly underrepresented among managers, holding just 14 per cent of store manager positions compared with more than 80 per cent of lower-ranking supervisory jobs that are paid by the hour.

Wal-Mart responds that women in its retail stores made up two-thirds of all employees and two-thirds of all managers in 2001.

- AP