by Art Gutman Ph.D., Professor, Florida Institute of Technology

On April 26, 2010, a panel of eleven 9th Circuit Court judges ruled 6-5 that a class approximated at 500,000 female Wal-Mart employees could proceed with a class action suit in accordance with Rule 23 of the Federal Rules of Civil Procedure. These rules are available here, and the text of the case is available here.

The case involves an original claim by six named plaintiffs filed on June 8, 2001 that females employed at Wal-Mart are (1) paid less then men in comparable positions even when women have higher performance rating and more seniority and (2) are less likely to be promoted and wait longer for their promotions than men. The plaintiffs charged that:

"Wal-Mart’s strong, centralized structure fosters or facilitates gender stereotyping and discrimination, that the policies and practices underlying this discriminatory treatment are consistent throughout Wal-Mart stores, and that this discrimination is common to all women who work or have worked in Wal-Mart stores.”

The plaintiffs sought to certify a class of women working at any Wal-Mart store on or after December 26, 1998. Considering that Wal-Mart had 3,400 stores in 41 regions, the estimated size of the class in the original claim was approximately 1.5 to 1.6 million women.

In 2004, the District Court for the Northern District of California certified a proposed class of females on issues relating to alleged discrimination, including liability for punitive damages, injunctive relief, and declaratory relief, but rejected a proposed class for back pay determination. In 2007, a three-judge panel of the 9th Circuit ruled 2 to 1 to affirm the district court ruling. Wal-Mart then appealed for the en banc review.

In a nutshell, the majority of six in the en banc panel made three rulings: (1) that Rule 23 was satisfied for injunctive relief, declaratory relief, and back pay, for females employed at Wal-Mart on or after June 8, 2001 (approximately 500,000 females), but remanded to the district court on (2) a separate class of current female employees seeking punitive damages relating to the promotion claims and (3) a separate class of female employees no longer working at Wal-Mart at the time the suit was filed. The dissenting judges argued that the majority rulings were “made with virtually no analysis” and is “wrong both as a matter of law and fact”, and that it establishes a split among circuit courts.

This is a complex ruling. We will update with a more detailed analysis in the coming weeks. In all likelihood, we are a looking at a landmark Supreme Court ruling somewhere down the line.

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