Class-action lawsuits are growing fast, and the classes are getting bigger than ever.
Lawyers find one or two employees that they believe represent all other similarly situated employees in a company and file a wage-and-hour lawsuit on behalf of their clients—and perhaps thousands of others who may have never thought about a lawsuit.
Such cases are expensive, time consuming and dangerous because they take what may be small individual claims and exponentially magnify them.
Now the largest class-action lawsuit in U.S. history has been given the go-ahead. Employers nationwide are waiting with bated breath to find out what happens to Walmart.
Recent case: Betty Dukes and 119 other women who had worked for Walmart sued. They sought to represent a nationwide class of women they said had been subjected to discrimination in pay and promotions.
Among their allegations were claims that women employed in Walmart stores are paid less than men in comparable positions, even if they have higher performance ratings and greater seniority. The suit says women receive fewer promotions to in-storepositions than men.
Plus, it alleges that Walmart’s business is run in a way that disadvantages women. Walmart, they claim, has a strong, centralized structure that fosters or facilitates gender stereotyping and discrimination, and that the policies and practices underlying this discriminatory treatment are consistent throughout Walmart stores.
As a result, they argue, every woman who has ever worked in a Walmart store has been the victim of gender discrimination.
The proposed class includes every category from part-time, entry-level hourly employees to salaried managers. While the exact number of employees who may find themselves part of the lawsuit is still unclear, it could reach well over 1 million women employed or formerly employed at 3,400 Walmart stores across the country.
The class includes any woman who worked in a Walmart store at any time after June 8, 2001.
Walmart appealed the class-action certification to the 9th Circuit Court of Appeals. It argued that managing such a large class of alleged sex discrimination victims is impossible and that the women don’t share enough common characteristics to justify one large class-action lawsuit.
Attorneys for the women argued that they had presented expert statistical evidence showing that female Walmart employees received lower wages and fewer promotions and that corporate structures and policies helped create this unequal workforce. It’s only fair, they argued, that all affected women receive their day in court.
The 9th Circuit Court of Appeals agreed and upheld the certification of the class. (Dukes, et al., v. Wal-Mart, No. 04-16688, 9th Cir., 2010)
What it means for employers
Large class-action cases are alive and well. That should be a warning to employers to review their compensations systems for hidden bias. Don’t wait until you face a class-action lawsuit.