Will the Corporate Court Deliver for Wal-Mart?

The Supreme Court heard oral arguments today in Wal-Mart v. Dukes, a gender discrimination class action against the retail giant. AFJ’s Justice Watch blog has highlighted specific aspects of the case in daily installments. Today’s final installment summarizes what's at stake in the case and places it in the context of the Roberts Court’s strong pro-corporate bias.

The ability of the world’s largest retailer, and largest private employer in the United States, to discriminate on a massive scale against its female employees is at stake in the biggest case of the U.S. Supreme Court’s 2010-11 term – Wal-Mart v. Dukes. In Dukes, the district court approved, and the en banc Ninth Circuit Court of Appeals upheld, certification of a class action brought by Betty Dukes and others to hold Wal-Mart accountable for suppressing women’s pay and promotion for more than a decade. Despite detailed findings by the lower court and the lack of a circuit split on the issues in dispute, the Roberts Court accepted Wal-Mart’s appeal.

Powerful corporations like Wal-Mart have consistently enjoyed a home field advantage when litigating in front of the Roberts Court. Since 1953, corporate interests have won just 42 percent of the time in the Supreme Court, but that percentage has jumped to 61 percent in the Roberts Court, with three of the seven most pro-corporate terms occurring during Chief Justice Roberts’ first five years. Just last term, the Roberts Court ruled in favor of the side that the U.S. Chamber of Commerce supported in 13 of 16 cases. The U.S. Chamber, and a wide array of other large corporate interests, have lined up on Wal-Mart’s side in this case.

Why is Wal-Mart v. Dukes so important? When Congress passed Title VII as part of the Civil Rights Act of 1964 to prohibit discrimination in employment, women working full time were paid approximately 59 percent of what men were paid, on average. Today, nearly 37 years later, women are paid only 77 percent of what men are paid. Over an average lifetime of work, this difference will result in a loss of $700,000 for a female high school graduate, $1.2 million for a college graduate and $2 million for a professional school graduate. Working women and their children also experience higher rates of poverty than men, and have a greater need for public assistance to obtain health care, including those working at Wal-Mart.

If our nation’s largest employer – with approximately 1.4 million employees, more than 860,000 of whom are women, a large percentage of whom are women of color – can avoid liability for systemic discrimination across its nationwide chain of stores, it will undermine the equal rights of all women workers. Moreover, any ruling by the Roberts Court that makes it harder for employees to bring a class action will remove an important safeguard that protects workers when they suffer discrimination.

In today’s political climate, corporations are eager to roll back the clock and destroy many of the gains workers made during the Civil Rights era. Wal-Mart v. Dukes could dramatically boost or inhibit those efforts, depending on how the Court rules.

Click here to read more about this landmark case and download AFJ's comprehensive analysis.

Previously:

• Wal-Mart Win in Dukes Case Would Empower Corporations to Steal Wages
  
• Wal-Mart v. Dukes Threatens to Undermine Class Actions as a Tool for Social Justice
• Wal-Mart’s Centralized Corporate Control Spreads Gender Discrimination Throughout the U.S.
• Shocking Statistics Demonstrate Extent of Nationwide Sexism at Wal-Mart
• Personal Stories Demonstrate Indignities Female Employees Face at Wal-Mart
• How “The Wal-Mart Way” Ruined Two Women’s Careers

Read more »

Wal-Mart v. Dukes Threatens to Undermine Class Actions as a Tool for Social Justice

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we discuss the important role class actions play in leveling the playing field for everyday Americans who challenge injustice in court.

If the Roberts Court rules for Wal-Mart and raises the bar for maintaining a class action, the result could be devastating for enforcement of civil rights and employment discrimination laws. Some of the most important civil rights cases in American history were class action lawsuits. Brown v. Board of Education ended racial segregation in public schools in a class action. Griggs v. Duke Power empowered employees to remedy seemingly neutral policies that disproportionately harmed racial minorities. The pollution case portrayed in the movie Erin Brockovich and the sexual harassment case portrayed in North Country were also class actions. Class actions have allowed for historic civil rights gains because of the unique tools they provide to combat discrimination and other forms of corporate misbehavior.

Class actions play an essential role in holding corporations accountable for their widespread unlawful behavior, particularly when the harm suffered by each individual is small relative to the larger discriminatory picture. An individual is far less likely to enforce rights in court if the recoverable damages are too small to justify the cost of lengthy litigation or arbitration, a fact which often allows corporations to get away with unlawful conduct. The Supreme Court has recognized this function:

The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.

As a result of the relative disadvantages of filing an individual claim, most plaintiffs who lose at the class certification stage, and are consequently unable to share the burdens of litigation with a larger class, do not pursue individual discrimination claims. One reason is that the cost of bringing a lawsuit can be much higher than the potential return to individual plaintiffs, resulting in “negative value” claims. For example, the average settlement in a sex discrimination claim deemed by the Equal Employment Opportunity Commission (EEOC) to have merit is $34,200, which is not enough to cover litigation costs and still compensate the plaintiff.

Many individual plaintiffs are also unaware that they have a claim. In the Wal-Mart case, for example, Wal-Mart strictly prohibits employees from discussing pay. It also tends to segregate women and men into different store departments. This keeps employees ignorant of pervasive pay discrepancies throughout Wal-Mart’s system. Even if aware they might have a claim, potential low returns and fear of retaliation keep individuals from seeking compensation when they have been discriminated against. Wal-Mart’s threats of retaliation are well-documented.

Class actions allow plaintiffs to uncover company-wide statistics that provide a more accurate measure of whether the company is engaged in a pattern of discrimination or its conduct has a discriminatory effect. The standard of proof in pattern-or-practice and disparate impact cases is also very different than in an individual lawsuit. In the former, courts look at the overall practices of a company, with plaintiffs carrying the burden of showing that unlawful discrimination has been the regular procedure or policy, or that while fair in form, company policy is discriminatory in operation. In the latter, the focus is on the decisions of management applied to each individual. Statistical evidence is often decisive in class actions, but may be irrelevant in individual lawsuits. Without it, however, discriminatory practices that can be seen in a company overview may remain hidden.

Click here to read more about this landmark case and download AFJ's comprehensive analysis.

Previously:

• Personal Stories Demonstrate Indignities Female Employees Face at Wal-Mart
• How “The Wal-Mart Way” Ruined Two Women’s Careers
• Shocking Statistics Demonstrate Extent of Nationwide Sexism at Wal-Mart
  
• Wal-Mart’s Centralized Corporate Control Spreads Gender Discrimination Throughout the U.S.

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Wal-Mart’s Centralized Corporate Control Spreads Gender Discrimination Throughout the U.S.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we discuss how Wal-Mart’s centralized corporate control spreads gender discrimination from headquarters to every region of the United States.

Wal-Mart argues that the plaintiffs’ theory of liability should fail because of Wal-Mart’s sheer size. The company maintains that the large number of its stores, managers, and employees means that pay and promotion decisions “turn[ed] on decisions made by individual store managers” and cannot support the commonality among class members that is required for class certification.

Plaintiffs counter with a powerful narrative that shows how sex discrimination at Wal-Mart was the inevitable byproduct of a strong and centralized corporate system that originated in the company’s Home Office in Bentonville, Arkansas, and permeated each of the company’s stores in the United States.

The key issue here is not the size of Wal-Mart. After all, if the core of an apple is rotten, it does not matter how large the apple is – it is still rotten. The issue is whether Wal-Mart’s employment system perpetuated a male-dominated hierarchy that suppressed women’s promotion and pay throughout Wal-Mart’s thousands of stores. The answer to this question is clearly yes.

Don Soderquist, the company’s former vice chairman and chief operating officer, wrote in his book The Wal-Mart Way that Wal-Mart is “intentional about dispersing our culture throughout the company and determined that our values and beliefs be on the mind of every associate.” Soderquist describes the numerous meetings that occur for employees at every level of the company’s hierarchy and writes that “we have taken advantage of every single one of these opportunities to preach Wal-Mart culture.”

Wal-Mart’s engrained practices are also maintained by promoting from within and requiring people in line to become assistant managers – the lowest salaried management position – to go through a 4-5 month training program at the Walton Institute, where the message is that women are not aggressive enough and would lower standards if promoted to management. Once employees become Store Managers, they are also required to relocate regularly, which spreads Wal-Mart culture but disadvantages women who typically have less flexibility than their male counterparts to relocate suddenly. Sam Walton, the company’s founder, recognized as early as 1992 that this requirement is unnecessary for business purposes and deprives the company of talented female managers, but the policy remains.

Centralized control at Wal-Mart is pervasive. All personnel policies, including compensation and promotion guidelines, are set by the Home Office. Each store has the same job categories, job descriptions, and management hierarchy. Regional management meets at least weekly at the Home Office to discuss developments in individual stores. The company has a sophisticated computer network that allows the Home Office to monitor daily activities at every store. Managers are tied to the Home Office through a computer link called the Manager’s Workbench. The Home Office controls each store’s temperature and mandates what music will be played inside. Wal-Mart also has a strict anti-union policy that it enforces uniformly throughout its stores.

Within the context of this highly uniform corporate structure devoted to pushing the “Wal-Mart Way,” Store Managers, District Managers, and Regional Vice Presidents – more than 85 percent of whom are men, and most of whom have been trained at the Walton Institute – get to make largely unfettered pay and promotion decisions. Under Wal-Mart’s employment system, there is:

• No criteria for making promotion selections;
• No oversight or systematic review of compensation or promotion decisions;
• No posting of most promotion opportunities; and
• No written information about the management trainee program, and no ability for hourly employees to apply for it.

In addition, Wal-Mart managers can:

• Offer raises based on undefined “exceptional performances;”
• Depart from starting pay rates for whomever they choose; and
• Through a “tap on the shoulder,” decide who becomes a management trainee.

The result is a system in which male managers promote people like themselves who accept and perpetuate Wal-Mart’s male-dominated corporate structure.

Tellingly, Wal-Mart knew at least six years before this lawsuit was filed that its employment practices would likely be seen by courts as discriminatory and subject to class-wide relief, after it hired a prominent law firm to evaluate whether its policies promoted sex discrimination. Akin Gump found widespread gender disparities. “By one measure, the law firm found, men were five and a half times as likely as women to be promoted into salaried, management positions.” The law firm advised Wal-Mart to take remedial steps in 1995, but Wal-Mart ignored the advice and continued its practices.

As a legal matter, the Supreme Court has recognized that Title VII should apply when “an employer’s undisciplined system of subjective decision-making has precisely the same effects as a system pervaded by impermissible intentional discrimination.” A strong corporate structure “creates the context – the policies, the decision-making systems, the work environment and culture – in which individual decisions are made.” These holdings support liability here.

Click here to read more about this landmark case and download AFJ's comprehensive analysis.

Previously:

• Personal Stories Demonstrate Indignities Female Employees Face at Wal-Mart
• How “The Wal-Mart Way” Ruined Two Women’s Careers
• Shocking Statistics Demonstrate Extent of Nationwide Sexism at Wal-Mart
  

Read more »

Shocking Statistics Demonstrate Extent of Nationwide Sexism at Wal-Mart

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we discuss the overwhelming statistical evidence that demonstrates the degree to which women are denied opportunities for advancement at Wal-Mart.

At the time this lawsuit was filed in 2001, Wal-Mart divided the United States into 41 regions. Each region contained approximately 11 districts, and each district contained six to eight stores. Overall, there were more than 3,000 stores. The lawsuit also includes Sam’s Club, which is wholly owned and run by Wal-Mart.

Plaintiff’s statistical expert, Dr. Richard Drogin, found that women employees at Wal-Mart were paid less than men in every year, and in virtually every job, even when relevant non-discriminatory factors were considered. This pattern was found in every one of the 41 Wal-Mart regions. Moreover, the disparity in pay between comparably employed women and men has increased every year since 1997. Strikingly, this disparity exists despite the fact that women, on average, have longer tenure at Wal-Mart – 4.47 years v. 3.13 years – and higher performance ratings.

The following table demonstrates the pay and promotion differential for field management positions and the three largest hourly job categories in 2001, the year this lawsuit was filed.

Click to enlarge

The massive disparities between men and women in these statistics support a prima facie case of employment discrimination. One reason for this is the stark break between hourly department managers, the vast majority of whom are women, and the next management level up, where employees are trained for salaried management positions. (See the entries above and below the black line in the table.) To move upward, an employee at Wal-Mart needs to receive a discretionary “tap on the shoulder” from upper-level management, which is overwhelmingly male. Women cannot apply for this promotion. Overall, if plaintiffs’ class certification is upheld, they will have a strong case of pattern-or-practice or disparate impact discrimination.

Indeed, Wal-Mart has among the worst records of American retailers in the percentage of women in management, prompting the company’s Executive Vice President for People to say that “we are behind the rest of the world.” Wal-Mart had a far lower percentage of female managers in 2001 than their closest competitors had in 1975. When this lawsuit was filed, women comprised 34.5 percent of Wal-Mart’s managers, compared to 56.5 percent of comparable retailers’ managers. One of plaintiffs’ experts put the odds that this discrepancy can be explained by chance as “less than one chance in many billions.”

Plaintiffs’ statistics demonstrate a clear pattern of nationwide discrimination that demands class certification in this case.

Click here to read more about this landmark case and download AFJ's comprehensive analysis.

Previously:

• Personal Stories Demonstrate Indignities Female Employees Face at Wal-Mart
• How “The Wal-Mart Way” Ruined Two Women’s Careers

Read more »

Personal Stories Demonstrate Indignities Female Employees Face at Wal-Mart

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we highlight some of the declarations from women who described the deep-seated sexism that is pervasive among Wal-Mart managers. For example:

• Senior management for Sam’s Club, a Wal-Mart affiliate, often referred to female store employees during Home Office executive meetings as “Janie Qs” and “girls.” When a female executive who was new to the company objected to the terms, the criticism was not well received and senior managers continued to use them.
• A Wal-Mart company newsletter featured a photograph from a company event showing Wal-Mart’s Executive Vice President of Operations and Chief Operating Officer posing on a leopard-skin stiletto high-heel-shoe chair while surrounded by women singing and dancing.
• When a female employee with five years at Wal-Mart and a Master’s Degree asked her department manager why her pay was less than that of a just-hired 17-year-old boy, the manager said: “You don’t have the right equipment.…You aren’t male, so you can’t expect to be paid the same.”
• A manager told plaintiff Chris Kwapnoski that she needed to “doll-up” and “blow the cobwebs off” her make-up.
• A store manager also told Kwapnoski that he gave a male associate a larger raise because the male associate had “a family to support.” This was a common refrain from Wal-Mart managers.
• A male department manager told a female employee that male employees will always make more than female employees because “God made Adam first, so women would always be second to men.”
• During a job interview to be a department manager, an assistant manager told Cleo Page that it was man’s world and that men control managerial positions at Wal-Mart.
• A male support manager responded to a female employee’s request for a transfer to Hardware by asking, “[y]ou’re a girl, why do you want to be in Hardware?”
• When a female district manager asked a male store manager why he always put female assistant managers in charge of Softlines, he responded “because that’s what women know.”
• When a female employee with experience in Sporting Goods expressed interest in becoming a Sporting Goods department manager, a male assistant manager told her, “[y]ou don’t want to work with guns.”
• When a female employee sought a position as a meat cutter, a male meat manager told her that Wal-Mart does not hire women as meat cutters. Similar arguments were used by managers to keep women out of the Electronics and Domestics departments.

The bias against women also pervades the Walton Institute, a company training center that “provides an educational environment for Wal[-M]art leaders from around the world to learn more about themselves and about Wal[-M]art’s unique company culture and how to sustain that culture.” At Institute sessions, participants in a discussion on diversity within the company were told that so few women were managers because “men have been more aggressive in achieving those levels of responsibility.” Company executives and managers also said that promoting women would require standards to be lowered.

Sam Walton, Wal-Mart’s founder, was an avid quail hunter and from the earliest days of the company invited top managers to an annual quail hunt. When women urged an alternative bonding experience, it was rejected as interfering with tradition. One woman who was hired from outside to be a Vice President of Sam’s Club described Wal-Mart as a “very tight, deep culture” and “very closed.” As she recalled, “I didn’t go hunting with them, I didn’t go fishing with them, I wondered if I had been able to do some of those things if I might have assimilated more quickly into the organization.” Female store managers were also required to attend business functions at strip clubs and Hooters. Wal-Mart’s Executive Vice President for People defended holding a district meeting at Hooters by claiming it was “one of the best places to meet and eat” in town.

Plaintiffs’ statistics provide a clear picture of the degree to which women are denied opportunities to succeed at Wal-Mart, but personal stories demonstrate the daily indignities that female employees must endure. For more information, click here to download AFJ’s special report on Wal-Mart v. Dukes.

Previously:

• How “The Wal-Mart Way” Ruined Two Women’s Careers

Read more »

How “The Wal-Mart Way” Ruined Two Women’s Careers

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today’s installment introduces the personal stories of Wal-Mart employees Betty Dukes and Edith Arana. Dukes and Arana were enthusiastic employees who suffered the effects of the company’s discriminatory practices.

When Betty Dukes started at Wal-Mart, she was energetically committed to advancing within the company. She dreamed of working her way up from a $5-an-hour part-time cashier position into corporate management. Instead, she toiled for several frustrating years with very few opportunities for advancement. After discussing her concerns with a district manager, store managers retaliated against her. They wrote her up for returning late from breaks despite the fact that male colleagues evaded punishment after doing the same thing or after failing to clock out at all. Dukes later received a demotion and pay cut for asking a colleague to let her make change from a cash register, even though this was a common employee practice. The financial strain forced Dukes to move in with her mother.

Dukes has said she hopes this case will change Wal-Mart’s practice of blocking women from entering management, and will ensure women receive equal pay. A Baptist minister, she put her “Betty vs. Goliath” struggle in biblical terms, stating that, “David had five stones but only needed one.”

Edith Arana accepted a $7-an-hour job at Wal-Mart after 10 years in retail because she believed that Wal-Mart was “a family-based company” where “you can come in as a cashier, and the sky is the limit.” Arana often took on heavy workloads, was commended for going “beyond what is expected” and was praised for doing “an outstanding job filling in where she is needed—anywhere, anytime.” Nonetheless, management consistently denied her promotions and gave them to men with less experience.

Arana also tried to enlist in Wal-Mart’s assistant manager training program, but was consistently denied. A store manager promised to recommend Arana for the program but reneged after she was forced to take sick leave after a car accident. This missed opportunity became particularly important when Arana became the sole breadwinner for her husband and three children after her husband developed liver cancer. Arana felt that no matter how well she performed, store management would not allow her to advance because she was a woman. Eventually, her heavy workload led a doctor to order her to take leaves of absence. Arana called herself “destroyed and devastated” by her experience with Wal-Mart.

Dukes and Arana are two of the named plaintiffs in this case whose stories are representative of the many employees who suffered as a result of pervasive sex discrimination at Wal-Mart.

For more information, click here to download AFJ’s special report on Wal-Mart v. Dukes.

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New report on Wal-Mart v. Dukes case details stakes and legal ramifications

Alliance for Justice today released a comprehensive report on the biggest case of the U.S. Supreme Court’s 2010-11 term. The report analyzes the stakes and legal ramifications of Wal-Mart v. Dukes, which concerns the right of as many as 1.5 million female Wal-Mart employees to hold the retail giant accountable for a pattern of discrimination that pervades every region of the giant retailer’s U.S. operations. Oral arguments in the case are scheduled for Tuesday, March 29.

The report, “Wal-Mart v. Dukes: Will the Supreme Court Protect Wal-Mart’s Discrimination Against Women?” is available for download here.

In addition to describing key facts in the case, the report explains its broader implications not just for employment discrimination claims, but for all class actions against major corporations. According to the report, “If our nation’s largest employer can avoid liability for systemic discrimination across its nationwide chain of stores, it will undermine the equal rights of all women workers. Moreover, any ruling by the Roberts Court that makes it harder for employees to bring a class action will remove an important safeguard that protects workers when they suffer discrimination.”

Among the information and themes explored in the report are:

• Whether Wal-Mart’s size and the sheer number of its stores, managers, and employees will prevent class certification for widespread gender discrimination. The report addresses this core issue in the case from a number of angles. It tells the personal stories of Betty Dukes and Edith Arana, excerpts declarations of more than 110 other women who filed stories of discrimination, and recounts statistical evidence that shows pay and promotion disparities in each Wal-Mart region and for virtually every job category. The report also explains how Wal-Mart created a structure that led to an upper-level management that consists of nearly all men, while women comprise the vast majority of lower-level employees. Tellingly, Wal-Mart has among the worst records of American retailers for hiring women in management, with its management practices stuck where its rivals were in the mid-1970s. Moreover, it was warned about its discriminatory practices six years before this case was filed by a law firm that found that men were “five and a half times as likely as women to be promoted.” Wal-Mart ignored the firm’s advice and continued its practices.
• What’s at stake for the women at Wal-Mart? Class actions play an essential role in holding corporations accountable for their widespread unlawful behavior, particularly when the harm suffered by each individual is small relative to the larger discriminatory picture. As a result of the relative disadvantages of filing claims, most plaintiffs who lose at the class certification stage do not pursue individual suits, which, even if successful, would not force Wal-Mart to change its discriminatory practices. Thus, as the report states: “If the Supreme Court limits access to a class action in this case, it will enable Wal-Mart to essentially rob its women employees of fair wages without serious legal consequences.”
• What’s at stake for American workers? If the Supreme Court decertifies the class action here, it will make it more challenging for other plaintiffs to bring class actions. Depending on the Court’s reasoning, a decision favoring the corporation could make it harder for class actions to be filed against other large employers with many outlets, managers, and employees. The Supreme Court might also undermine the availability of back pay for injured class victims.
• Will the Roberts Court buck or continue its pro-corporate trend? Powerful corporations like Wal-Mart have consistently enjoyed a home-field advantage when litigating in front of the Roberts Court. Since 1953, corporate interests won 42 percent of the time in the Supreme Court, but that percentage has jumped to 61 percent in the Roberts Court, with three of the seven most pro-corporate terms occurring during Chief Justice Roberts’ first five years. Just last term, the Roberts Court ruled in favor of the side supported by the U.S. Chamber of Commerce in 13 of 16 cases. The U.S. Chamber, and a host of other corporate interests, are supporting Wal-Mart in this case.

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