Wal-Mart has asked for the recent ruling by the Federal District Court in San Francisco to be overturned. The ruling granted class action status to a sex discrimination suit against the company, paving the way for the largest such case in US history. Wal-Mart must now look for ways to leverage its family-friendly image in the face of negative publicity.
Filed in 2001 by six current and former female Wal-Mart employees, the lawsuit alleges that female staff were denied promotions and received less pay than their male counterparts. The class action status would expand the case to include every woman who has worked at Wal-Mart since 26 December 1998; potentially 1.6 million plaintiffs. The world’s leading retailer would then be facing the largest civil rights class action case in US history.
Wal-Mart disputes the lawsuit’s claims, contending that since individual managers determine promotion and pay raise decisions, company-wide discrimination is improbable. The company claims that the plaintiffs have failed to show that all 1.6 million potential members of the suit suffered discrimination while employed at Wal-Mart. Wal-Mart also noted that the ruling could result in female employees who had not suffered discrimination claiming damages and gaining a share of the settlement.
Retail giant Home Depot faced a similar sex discrimination suit in 1997. The case, brought by 25,000 female employees, was later settled for US$104m. With a class size more than 60 times that of Home Depot’s, settling the lawsuit in a similar fashion would cost Wal-Mart billions.
Faced with a huge potential payout, Wal-Mart has chosen to dispute these charges rather than settle. However, continuing the fight will result in increased media attention, which could have negative effects on consumers’ perception of the company. To maintain its positive image, Wal-Mart should look to highlight successful female employees and leverage its status as a family-friendly establishment. Wal-Mart might consider eschewing traditional marketing methods such as a media advertising campaign that consumers may be less likely to trust. Unconventional methods, such as viral and word of mouth marketing, may create a wider sense of trust and help Wal-Mart to prevent serious long term damage to its corporate reputation.
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