Wal-Mart and Women: Good Business Practice or Gamesmanship?

By Spangler, Melanie A.; Britt, Margaret M. et al. | Journal of Applied Management and Entrepreneurship, April 2008 | Go to article overview

Wal-Mart and Women: Good Business Practice or Gamesmanship?


Spangler, Melanie A., Britt, Margaret M., Parks, Tomas H., Journal of Applied Management and Entrepreneurship


Executive Summary

This paper will focus on the legal, labor, and employment implications of the Dukes v. Wal-Mart Stores, Inc. decision. We will also examine what opportunities Wal-Mart management has before it to reshape its employment policies such as more objective hiring practices along with making Wal-Mart senior management accountable for Affirmative Action goals.

Introduction

On February 6, 2007, the United States Court of Appeals for the Ninth Circuit upheld the district court's prior ruling to certify a class of female plaintiffs alleging that Wal-Mart discriminated against them on the basis of their gender in violation of Title VII of the Civil Rights Act of 1964 (Pregerson, 2007). Close observers of the Dukes v. Wal-Mart Stores, Inc.case understand that a monumental, and perhaps historic, event was taking place before their eyes. The purpose of this paper is to address the significance of this case with respect to the impact on women's productivity and labor issues in terms of career advancement and to provide management advice to Wal-Mart executives.

First, one must consider the importance of class certification to the parties. A class action certification "is one of the most devastating employment-related events that can happen to an employer" (Haase & Sullivan, 2006, p. 153). As these researchers explain, the employer now faces potential liability, significant legal costs to defend the suit, and the need to counter evidence that would likely have been inadmissible if the plaintiffs had to proceed on an individual basis against the employer. Certification of the class action indicates the court has ruled that this suit may proceed as a class action allowing the six named plaintiffs to represent the entire class.

The Dukes case is additionally significant as it is the largest discrimination class certification in federal court history, involving an estimated 1.6 million potential plaintiffs (Hart, 2007). The class consists of "[a]ll women employed at any Wal-Mart domestic retail store at any time since December 16, 1998, who have been or may be subjected to Wal-Mart's challenged pay and management track promotions policies and practices" (Pregerson, 2007, p. 1340). Wal-Mart is the nation's largest private employer and as such sets the culture within the retail industry, if not the entire employment arena (Hart, 2007). This researcher argues that because of Wal-Mart's involvement, this case has "transformative potential" (p. 356). The potential arises from the ability of the Dukes case to push boundaries and address the continuing pervasive issue of gender discrimination (Hart, 2007).

One must also consider the legal impact of the case on future class action claims of discrimination. Some (Haase & Sullivan, 2006) argue that minimal legal impact has occurred from the Dukes decision. They base this conclusion on analytical reviews of court decisions regarding the certification of class actions against employers. Haase and Sullivan (2006) concluded that Dukes "has not marked a turning point in the legal treatment of subjective decisions in employment" (p. 155). As their analysis found, a majority of courts denied class certification prior to Dukes. (see Reid v. Lockheed Martin Aeronautics Co.; Abram v. United Parcel Service of America, Inc.) Following the Dukes decision, the breakdown in class certifications appears to remain the same with a majority of courts continuing to deny class action certification (Haase & Sullivan, 2006). While the legal trend or impact is a factor to consider, the important issue for businesses to take into account from the Dukes case is that no private employer has ever faced a class action of this size, and the public is engaging in a new dialogue regarding workplace discrimination.

Regardless of the legal impact on future court decisions, Dukes serves as a reminder to employers of the risk and exposure involved when sued, the importance of reviewing their current employment policies and developing policies that limit subjectivity, and assessing how to reduce the risk of being sued (Haase & Sullivan, 2006).

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