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As Walmart Gets Greener, Major Labor Lawsuit Looms

Mary Catherine O'Connor | Monday April 26th, 2010 | 0 Comments

Can the wrath of women scorned undermine the strides that Walmart has made with respect to environmental sustainability over the past five years? The mega-retailer claims its sustainability programs, which include using renewable energy to power its stores and cleaner transportation to drive its trucking fleet, is going to save the company millions in operating expenses–savings it plans to pass on to its customers.  But this might prove difficult if it has to pay billions in damages over a class action lawsuit alleging it unfairly limited pay and promotions to female employees.

On Monday, this nine-year-old suit received a big boost when the United States Court of Appeals for the Ninth Circuit, in San Francisco, ruled that the plaintiffs can head to court as a class action. This will make it the largest class-action employment lawsuit in U.S. history.Six individuals brought the suit, but since they claim that the retailer–the largest private employer in the world–takes a systematic approach to its discrimination against female employees, the court allowed it proceed as a class action. But just barely so–the vote was split 6-5.

Judge Michael Daly Hawkins, in the majority opinion, wrote: “Although the size of this class action is large, mere size does not render a case unmanageable.”

But the dissenting judges, and Walmart, contend that the case should address the individual complaints rather than being applied to the generalized experiences of female Walmart employees. It could also set a precedent for similar cases against other large companies, based, as dissenting judge Sandra S. Ikuta wrote, on “nothing more than general and conclusory allegations, a handful of anecdotes and statistical disparities that bear little relation to the alleged discriminatory decisions.”

The plaintiffs says the unfair treatment they received was not isolated, accusing Walmart of “systematically paying women less than men, giving them smaller raises and offering women fewer opportunities for promotion,” according to the New York Times.

“We disagree with the decision of the sharply divided 6-5 court to uphold portions of the certification order, and are considering our options, including seeking review from the Supreme Court,” Walmart said in a statement. “We do not believe the claims alleged by the six individuals who brought this suit are representative of the experiences of our female associates.”

What’s your take? How much can this lawsuit undermine Walmart’s current and future efforts around corporate social responsibility? And do you think it’s right for the plaintiffs to represent a class action?

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