The Walmart Suit And What It Means

Larry Price
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Wednesday - April 06, 2011
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The big story in the business sector is about a bias discrimination lawsuit brought against retail giant Walmart.

And while the suit involves one plaintiff, her lawyers want the Supreme Court to decide if the legal action can proceed as a class-action that could conceivably involve 500,000 to 1 million employees.

It could cost the world’s largest retailer a fortune in court costs.

The lawsuit has given birth to a flurry of briefs filed by business interests on Walmart’s side, and on the other civil rights, consumer and union groups. This case will likely have tremendous impact not just because of the money involved, but it could increase the viability of discrimination claims as a change agent in the workplace. When presented individually, discrimination claims are difficult to prove, but when combined in a class action it does something very scary to business owners: It increases the cost of settling the suit out of court because the potential of a huge judgement is not out of the question.

This is good news for budding labor attorneys, who can make lots of money teaching employers how to defend themselves against employment discrimination claims, especially in an environment where many companies have outsourced their human resources department.

What you can watch for in the coming weeks are the lawyers on both sides trying to distinguish between disparate treatment and disparate impact.

Disparate treatment simply means intentional discrimination. It requires no more than a finding that women (or a protected minority group member) were intentionally treated differently because of their gender (or minority status). If you are thinking about filing a similar suit, be advised that disparate impact claims do not require proof of discriminatory intent.

Instead, the plaintiff must show that the apparently neutral employment practice caused an adverse impact - for example, a rule that requires employees to have college degrees to do a particular job. If there is such an employ-ment rule, then the employer will have to defend himself by arguing that there is a business necessity for the practice.

None of this is an open-and-shut case for the employee. Under the law Title V11 (CRA 1991), a person who believes that he or she was a victim of unintentional discrimination because of an employ-er’s practices needs only establish a prima facie case of discrimination, like the college degree for employment.

For the employee, there are several methods to show that one or any of the employer’s procedures has an adverse impact on a protected group.

The favorite for federal agencies is the “4/5 rule.” It says: “A selection rate for any racial, ethnic or sex group which is less than four-fifths or 80 percent of the group with the highest rate will generally be regarded as evidence of adverse impact.”

Labor lawyers know all of these tactics for showing adverse impact. It is not easy and not cheap.

And when you get a class-action suit by more than 500,000 plaintiffs, the chances are pretty good that justice will be served if the employer is found guilty.

It at least should be interesting to follow.

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