Appeals Court Rules Walmart Sex Discrimination Case Can Go to Trial

April 26, 2010 — -- A class action lawsuit representing more than 1 million women got the green light to proceed today against Walmart Stores Inc.

Walmart claims the suit, which alleges the giant chain store discriminates against female employes, could cost it billions of dollars if it is upheld. The reputation of an iconic company is also on the line.

It is the largest class action suit in American history, and Walmart indicated today it may take the fight to the Supreme Court.

The 9th Circuit U.S. Court of Appeals in San Francisco ruled that the case against one of the country's largest private employers could go to trial, nine years after the suit was originally filed in 2001.

The suit, filed on behalf of six women who worked in 13 of Walmart's stores, alleges that the women employed by the company face systemic sexism -- that they're paid less than men in comparable positions, receive fewer promotions and wait longer for promotions -- according to the court documents released today.

The decision opens the door for a million other women who worked in Walmart stores to seek back pay and perhaps even punitive damages.

Brad Seligman, an attorney for the plaintiffs, said in a statement to ABCNews.com that other than the sheer size of the case, there was nothing "novel" about it, characterizing the lawsuit as "old school discrimination."

"The Court of Appeals rejected Walmart's argument, which was a variant of the 'too big to fail' argument," said Seligman. "The court holds that all companies, the big as well as the small, have to comply with the law and may face a class action when they discriminate on a wide basis."

A statement from Walmart said that the company was "considering [its] options, including seeking review from the Supreme Court."

"We do not believe the claims alleged by the six individuals who brought this suit are representative of the experiences of our female associates," read the statement from Jeff Gearhart, executive vice president and general counsel for Walmart.

"Walmart is an excellent place for women to work and fosters female leadership among our associates and in the larger business world," said Gearhart.

Womens groups, though, were cheering today, saying that the case sends a message at a time when women still earn about 79 cents for every dollar men earn.

"I can't imagine a bigger message being sent to bigger employers and to employers overall," said Marsha Greenberger of the National Women's Law Center. "That [big companies] can be held accountable, the laws apply to them."

Six Plaintiffs to Represent Female Employees of Walmart Since 1998

WalMart had appealed the claim, arguing that each woman should have to file a seperate suit, rather than try to establish a "nationwide class of women."

According to the court documents, the women who filed the suit sought to represent "all women employed at any Walmart domestic retail store at any time since Dec. 26, 1998."

WalMart Stores, Inc. operates more than 4,300 facilities in the U.S. and employs more than 1.4 million people in the United States.

In today's 6-5 ruling, the court decided that the claim was not too big, as Walmart had suggested, to go to trial.

Judge Michael Daly Hawkins wrote in this opinion that while Walmart had emphasized the "historic nature of the Plaintiffs' motion," the court believes the "class size was not unmanageable."

In the court's dissent, Judge Sandra Ikuta wrote that there was a reason no court has ever taken on a class as big as this one.

"While the six plaintiffs allege they have suffered discrimination at the hands of a few individual store managers, they fail to present '[s]ignificant proof' of a discriminatorypolicy or practice of Walmart that would make it possible to conclude that 1.5 million members of the proposed class suffered similar discrimination," Ikuta wrote.

"On its face, a class action of this sort makes no sense," Ikuta added, writing that the court could very well face millions of individual hearings due to the class size.