Wal-Mart asks appeals court to dismiss discrimination case

David Kravets

Tuesday, Aug. 9, 2005 | 9:25 a.m.

SAN FRANCISCO -- Wal-Mart Stores Inc., the world's largest private employer, urged a federal appeals court Monday to dismiss a lawsuit alleging that female employees were discriminated against in pay and promotions.

Wal-Mart is appealing a federal judge's decision to let the nation's largest employment discrimination lawsuit go to trial. The suit claims that as many as 1.6 million current and former female employees earned less than men and were bypassed for promotions.

Wal-Mart attorney Theodore Boutrous told a three-judge panel of the 9th U.S. Circuit Court of Appeals that women Wal-Mart employees were not discriminated against. "There's no significant disparity in terms of pay between men and woman," he said, citing a Wal-Mart study.

Judge Harry Pregerson told Boutrous that his legal briefs in the case were "arrogant" and that the circuit was not litigating the merits of the case. Pregerson said the appeals court was reviewing whether a federal judge abused his discretion in allowing the case to go to trial.

"We're not trying these issues today," Pregerson said when Boutrous insisted the company was innocent.

Wal-Mart, which faces billions of dollars in potential damages in the case, earned $10 billion last fiscal year and employs 1.3 million people.

The Bentonville, Ark.-based retailing powerhouse, meanwhile, says the conventional rules of class actions should not apply in this case because its 3,400 stores, including Sam's Club warehouse outlets, operate like independent businesses.

Lawyers for the women urged the appeals panel to uphold the ruling last year by U.S. District Judge Martin Jenkins of San Francisco that corporations must comply with a 1964 civil rights law prohibiting sex discrimination. Jenkins, in allowing the case to go to trial, ruled that lawyers for the women had enough anecdotal evidence to warrant a class-action trial, which conflicted with Wal-Mart's study.

Brad Seligman, an attorney representing the women, said men were paid more than women companywide. "There were statistically significant differences in pay," he said.

Judge Andrew Kleinfeld suggested that Wal-Mart and the women settle the case out of court.

After the 40-minute hearing, lead plaintiff Betty Dukes, a greeter at a Wal-Mart in Pittsburg, Calif., said, "I think our side showed great promise." Since the case was filed, her pay has increased from about $8 hourly to $13, she said.

Boutrous objected to Jenkins' plan: If companywide gender discrimination is proven at trial, it could force Wal-Mart to pay billions of dollars to women paid less than their male counterparts, with no opportunity to dispute their individual circumstances.

Jenkins rejected the idea of 1.6 million individual hearings as "impractical on its face" and has planned to use a statistical formula to compensate the women.

Wal-Mart, in seeking dismissal of the case, called that an unprecedented denial of due process.

Boutrous has suggested that women who allege they were discriminated against file lawsuits against individual stores. The women's lawyers said the idea was ridiculous, and would clog the federal judiciary.

The court did not indicate when it would decide whether the case can go to trial.