Archive for Friday, June 25, 2004

Wal-Mart discrimination case may prompt industry change

Analyst says retail giant addressing gender equity

June 25, 2004


— Retail experts say a nationwide class-action sex-discrimination lawsuit against Wal-Mart Stores Inc. could lead to changes within the world's largest retailer and among competitors.

"If the allegations are true, it will very fast lead to radical improvement of the situation. It is absolutely in (Wal-Mart's) best interest to resolve this as fast as possible," said Kurt Barnard, president of Retail Forecasting LLC in Upper Montclair, N.J.

Another analyst noted that those changes may have begun before the decision Tuesday by a federal judge in San Francisco to grant class-action status to a suit filed three years ago.

The suit originally filed on behalf of six women will now represent as many as 1.6 million current and former employees -- the largest private civil rights case in U.S. history. The suit claims Wal-Mart set up a system that often pays female workers less than their male counterparts for comparable jobs and bypasses women for promotions.

Wal-Mart contends its stores operate with so much autonomy that they are like independent businesses with different management styles that affect the way women are paid and promoted. The company has said the ruling had nothing to do with the merits of the case and promised to appeal.

Merrill Lynch analyst Daniel Barry noted that Wal-Mart already had announced plans to tie executive bonuses to new corporate diversity goals that include the promotion of minorities and women in the same proportion that apply for management positions.

Robert Blattberg, director of the Center for Retail Management at Northwestern University's Kellogg School of Management, said the suit would force retailers to look at whether they are complying with equity laws.

"Most companies spend a lot of time trying to avoid these types of problems," he said. "If these cases start becoming prevalent, it will significantly increase the cost to retailers to track and determine if they are in compliance."

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