PRESS RELEASE: APRIL 01, 2011

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What Sex Has to Do With Getting Ahead at Wal-Mart

March 31, 2011

Businessweek

By Ann Woolner

April 1 (Bloomberg) -- If you want to know why so few women hold executive positions at Wal-Mart Stores Inc., here's the answer the Walton Institute gives out to management trainees:

Women aren't as aggressive at seeking promotions as men.

Not surprisingly, women at Wal-Mart have a different explanation: Management stereotypes employees by gender (see example above).

Women from Florida to Alaska swear in court papers that they wanted to build careers at Wal-Mart, worked extra hard, earned good evaluations and openly sought promotion only to be bypassed by less-qualified men.

So they filed the world's largest sex discrimination case against the world's largest employer. How's that for gumption?

Their case has been going well for them, if slowly, since they filed it 10 years ago. But when it got to the U.S. Supreme Court this week, they ran into trouble. How much trouble's hard to say until the court rules, probably in June.

Given the size of Wal-Mart's labor force, we are talking about a case that would cover at least 500,000 employees and possibly more than 1 million. Every current female employee can become part of the lawsuit that claims company-wide bias against them, two federal courts in California have ruled.

The class is so humongous, and each woman's situation so different from another's, that Wal-Mart says the Supreme Court should disband it and force any aggrieved employee to sue individually. It's just too big for a court to manage fairly, they say.

Judge's Opinion

And yet, the company's sheer size, with its gargantuan labor force, can't be allowed to insulate it from claims that something about its corporate conduct denied hundreds of thousands of employees the pay they would have gotten but for their sex.

"If the employer had 500 female employees, I doubt that any of my colleagues would question the certification of such a class," 9th U.S. Circuit Court of Appeals Judge Susan Graber, writing approvingly but separately from the 6-5 majority that let the class certification stand last year.

Wal-Mart says company-wide policy forbids discrimination, not encourages it. For a class-action lawsuit to prevail, the women have to show corporate involvement. But at Wal-Mart, each manager in its 3,400 stores has near-complete freedom to decide pay and promotions.

So we're talking about a huge coincidence, apparently. Women in almost every job category, in each of Wal-Mart's 41 regions make less than men in the same jobs, by an average of $5,000, according to the plaintiffs' statistician. This is true despite findings that women stay with the company longer than men and generally have higher performance ratings.

Deli Manager

Gretchen Adams says she was told she was getting top pay at $26,500, when promoted to deli manager at a Wal-Mart Supercenter in Stillwater, Oklahoma. Then she found out that a man she was training for the same position in Jasper, Alabama, was getting $30,000. It happened again when she trained a man in Cape Coral, Florida, and then in Las Vegas.

Although similar accusations show up in multiple stores located around the country, Wal-Mart's statistician challenged the plaintiffs' figures as being too regional to be useful. Looking on a store-by-store, department-by-department basis, she found little pay disparity, a method the plaintiffs attack.

As for promotions, the company doesn't post most openings. You learn about them if your manager taps you on the shoulder and suggests you apply. Is it surprising that the mostly male management prefers mostly male management, especially in a corporate culture as traditional as Wal-Mart's?

Through classes, meetings and pep rallies at stores, the company's Bentonville, Arkansas, home office sends forth its culture to each and every store.

Scalia's Confusion

So while the plaintiffs acknowledge decentralized personnel decisions at Wal-Mart, they say that the company's distinctive and tightly controlled corporate culture plays an indirect but powerful role.

"I'm getting whipsawed here" as to how personnel decisions are made, Justice Antonin Scalia complained to the lawyer for the women.

"On the one hand, you say the problem is that they were utterly subjective, and on the other hand you say there is strong corporate culture that guides all of this.

"Well which is it," Scalia demanded.

Does he really not understand this?

Just Maybe

It could be both. You just might have a corporate culture that allows illegal job discrimination to flourish at the hands of independent store managers. It could happen if management trainers defend the paucity of women in higher ranks and tells trainees women don't want promotions; if the company sponsors hunting trips as bonding exercises for executives; if the home office doesn't intervene when its mostly male store management keeps promoting mostly men or ask questions when men are routinely paid more than better-qualified women doing the same work.

For all the discussion of whether a company-wide policy or practice keeps women down, it's too early in the case to say for sure. A trial will determine that.

But there's enough for the Supreme Court to allow the class action suit to keep going.

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