New quarterly wage data released today by the Department of Labor show that in 2010 women working full-time in sales and related occupations made only 64.0 cents for each dollar earned by men—the biggest wage gap in any industry. Indeed, the industry’s wage gap is a relic from a different era, equivalent to the overall wage gap thirty years ago, when women earned about 64 percent of men’s wages, in contrast to 77 cents in 2009, according to annual earnings data. Ironically, on the very same day this data was released, Wal-Mart, the nation’s largest retailer, was due to file a brief in the Supreme Court presenting its argument that women employed nationwide at Wal-Mart cannot join together to challenge company-wide pay and promotion practices alleged to discriminate against women. If Wal-Mart’s arguments succeed, the devastating wage gap will become even harder to close.
Ten years ago a group of women who worked at Wal-Mart stores filed a lawsuit describing broad-based sex discrimination by Wal-Mart, including paying women less and promoting fewer women, more slowly, to management positions than men. They brought the case on behalf of all women at Wal-Mart who had faced such discrimination. The Court of Appeals and the District Court both held that the law allowed this large class of women to proceed—since Wal-Mart itself is so large and its practices as described potentially injured all of the women included. Now the Supreme Court will decide the legal issue of whether the “class” of women is just too big to be allowed to proceed; the practical issue is whether Wal-Mart is too big to be held fully accountable for any company-wide discrimination it engaged in.
Wal-Mart’s women employees presented extensive analyses demonstrating a major pay and promotion gap between male and female employees at the company. Plus, they backed up the numbers with specific examples. For instance, managers across the country repeatedly explained to female employees that male employees were being paid more because the men were heads of households with families to support. Some women were even told they should be at home in the kitchen or barefoot and pregnant. Experts concluded that Wal-Mart’s uniform policies and corporate culture perpetuated these sorts of gender stereotypes across the entire company. That vast body of evidence convinced the lower courts to certify a nationwide class, and the law supports that decision.
The ability of employees who face pay discrimination to bring class actions of this type is essential. Making class actions unavailable would close the courthouse door to women who do not have the financial means to bring their own individual lawsuits, including many, many Wal-Mart employees earning modest wages. If women cannot join together in a large class, it also becomes far more difficult to present a full picture of an employer’s widespread pattern of discrimination to a court; this lets discriminating employers off the hook—at enormous cost to the many women who are injured. Finally, class actions, in contrast to individual lawsuits, have much greater power to change corporate culture, address the root causes of workplace discrimination, and provide a company-wide solution to a company-wide problem.
The law allows for this broad-based remedy because discrimination in pay and promotions is broad-based itself. Not only is the current wage gap between women and men substantial, the new quarterly data on the wage gap in sales suggests Wal-Mart represents only the tip of the iceberg when it comes to pay disparities in this industry.
The high wage gap in sales is particularly troubling given the large number of women—nearly 12 percent of women workers—who work in the retail sector. In fact, “cashier” and “retail salesperson” numbered among the top ten occupations for women in 2009 and accounted for nearly 4 million women’s jobs. The problem of wage disparities for retail employees has enormous scope.
If the Supreme Court rules for Wal-Mart, the company’s women employees will be denied the class action mechanism’s unique ability to remedy the discrimination they suffered and to bring about needed changes to prevent future discrimination. And a decision for Wal-Mart would have far-ranging effects on women employees in general, both in the retail sector and other industries, by making it much more difficult to challenge and remedy gender-based pay discrimination, as well as other forms of discrimination. Instead of placing additional barriers in the way of ordinary women standing up to powerful corporate interests, let’s hope that the Court’s decision recognizes the intended purpose of the law allowing class actions and does not undermine their vital role in combating pay discrimination and facilitating justice in the justice system.