Lawyers for women in a sex-discrimination class-action lawsuit against Wal-Mart Stores are laying the groundwork for showing that top executives at the retail giant knew that female employees were paid less and promoted less.
They say e-mails and letters about discrimination were sent directly to Wal-Mart CEO Lee Scott, concerns about the lack of women in management were brought to board members, and Wal-Mart’s own internal studies found the company lagged behind other retailers in promoting women.
That issue is key because in order to secure punitive damages, the women’s lawyers must show that corporate executives exhibited malice or reckless disregard, legal experts say. Most cases of this type settle before going to trial.
“They have to show management knew and ignored it,” says John Fox, an employment lawyer in Mountain View, Calif. “That is typically hard to prove.”
Wal-Mart has denied the accusations and plans to appeal the class-action certification, which was granted this week by a federal judge. More than 1.6 million women who worked at Wal-Mart stores since Dec. 26, 1998, could be covered by the lawsuit, making it the largest private class-action case ever.
Wal-Mart officials declined to comment because of the pending litigation but said any problems were isolated. In a statement, they noted the class-action certification has “absolutely nothing” to do with the merits of the case.
“There are lots of documents showing Wal-Mart was very aware, their board of directors were very aware, of the issues with women, going back many, many years,” says Brad Seligman of the Impact Fund, a Berkeley, Calif.-based non-profit representing the women.
Some of what the women’s lawyers will try to show:
• Information was shared with board members. Wal-Mart conducted its own benchmarking study, which concluded that “Wal-Mart falls significantly behind other comparable firms,” according to the class certification briefing. Coleman Peterson, Wal-Mart’s former vice president of human resources, asserted that “we are behind the rest of the world,” the briefing says.
Minutes from a board of directors committee meeting in March 1999 state that Wal-Mart’s percentage of women in store management trails other retailers, according to the legal brief.