Obama Administration Sides With Wal-Mart Workers

By Karen Gullo and Margaret Cronin Fisk
March 19 (Bloomberg) -- The Obama administration sided with women suing Wal-Mart Stores Inc. for discrimination, urging a federal appeals court to let the current and former workers sue as a group and proceed with the biggest sex-bias case in U.S. history.
The U.S. Equal Employment Opportunity Commission, weighing in on the lawsuit for the first time since it was filed in 2001, rejected Wal-Mart’s argument that as many as 2 million workers shouldn’t be allowed to seek back pay and punitive damages as a group because that would violate the company’s right to defend itself against each worker’s claims before a jury.
That position would prevent the government from ever seeking punitive damages from companies with a pattern of discrimination and interfere with the EEOC’s ability to obtain redress for violations of Title VII, the federal law that prohibits discrimination, said Barbara Sloan, an EEOC attorney, in a filing with a federal appeals court in San Francisco.
“If Wal-Mart’s arguments were accepted, it could effectively preclude a claim for punitive damages in most if not all Title VII pattern-or-practice cases including those brought by the Commission,” Sloan wrote. “It would be ‘nonsensical’ to prevent victims of particularly egregious discrimination from proceeding collectively.”
Wal-Mart, the largest U.S. private employer, is accused of paying women less than men and giving them fewer promotions. The 2001 lawsuit was originally filed in San Francisco by six women seeking to represent other employees.
Appeals Court
A federal appeals court on March 24 will hear arguments in Wal-Mart’s appeal of a judge’s ruling that allowed workers to sue as a group and seek back pay and punitive damages. Wal-Mart, based in Bentonville, Arkansas, denied discriminating and said it should be allowed to defend the women’s claims on a case-by- case basis.
“We believe the EEOC’s positions are fundamentally incorrect and look forward to presenting our argument to the court of appeals on Tuesday,” Theodore Boutrous, Wal-Mart’s attorney, said today in an e-mail message.
The EEOC’s support of the Wal-Mart class action “can’t simply be attributed to the change in administrations,” said attorney Joseph Sellers, who represents the women. “These are the views of the people who were the holdovers at the commission,” he said.
“Wal-Mart’s position, if adopted by the court, would lead to the elimination of employment class actions larger than a couple of hundred people,” he said.
The EEOC didn’t address the merits of the case. The agency said it was filing the brief because “this court’s resolution of issues relating to punitive damages and backpay in class cases may directly affect the commission’s enforcement of Title VII” of the 1964 Civil Rights Act, “particularly its systemic litigation.”
The U.S. Chamber of Commerce earlier filed an amicus brief supporting Wal-Mart’s efforts to reverse the class-action decision. “If the district court’s decision stands, it will have a potentially destructive effect on the Chamber’s members, who will likely face billions of dollars in new class-action claims,” the organization’s lawyers argued in a March 6 filing.
The EEOC’s support of class certification “would be given considerable weight” by the appeals court considering the decision, law professor Carl Tobias of the University of Richmond said today. “That’s the agency’s area of expertise.”
The case is Dukes v. Wal-Mart Stores Inc., 04-16688, U.S. Court of Appeals for the Ninth Circuit (San Francisco).
To contact the reporters on this story: Karen Gullo in San Francisco kgullo@bloomberg.net; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.