5 Consumer Stakeholders and the Environment 327Ca

5 Consumer Stakeholders and the Environment 327
Case 15
Wal- Mart: Challenges with Gender Discrimination
The Civil Rights Act of 1964 forbids gender- based
discrimination in the employ-
ment arena. Section 703 of this act specifi es that:
It shall be an unlawful employment practice for an employer to
fail or refuse
to hire or to discharge any individual, or otherwise to
discriminate against any
individual with respect to his compensation, terms, conditions,
or privileges of
employment, because of such individual’s race, color, religion,
sex, or national
origin.
It shall be an unlawful employment practice for an employer to
limit, segre-
gate, or classify his employees in any way which would deprive
or tend to de-
prive any individual of employment opportunities or otherwise
adversely affect
his status as an employee, because of such individual’s race,
color, religion,
sex, or national origin.
In Dukes v. Wal- Mart Stores, Inc., Betty Dukes, the lead
plaintiff along with

fi ve other plaintiffs and the class that they represent, charged
that “Wal- Mart
discriminates against its female employees by advancing male
employees more
quickly than female employees, by denying female employees
equal job assign-
ments, promotions, training and compensation, and by
retaliating against those
who oppose its unlawful practices.” In addition, the plaintiffs
sought to end Wal-
Mart’s discriminatory practices, to receive relief for the class,
and to secure
punitive damages. Dukes v. Wal- Mart Stores, Inc. also alleged
that Wal- Mart’s
underlying culture and policies contributed to the discrimination
that the plain-
tiffs experienced.
“The theories pursued in the Dukes litigation involve what are
known as
‘glass ceiling/sticky fl oor’ allegations of employment
discrimination that female
employees are relegated to low- paying positions and are unable
to be promoted
into better paying and higher- level managerial jobs.” Note that
“These arguments
manifest an aggressive approach by the plaintiffs’ bar to
establish the class-
worthiness of claims stretching over multiple facilities with
assertions that pay
and promotion claims are readily susceptible to class- action
treatment based
on expert testimony that such claims are truly common and
typical.” According
to data supplied by statistical con sul tant Richard Drogin on
behalf of the plain-

tiffs, Wal- Mart had an established pattern of discrimination
against women. In
his statistical report, Drogin concluded that “Women employees
at Wal- Mart
are concentrated in the lower paying jobs, are paid less than
men in the same
job, and are less likely to advance to management positions than
men. These
gender patterns persist even though women have more se
niority, have lower turn-
over rates, and have higher per for mance ratings in most jobs.
The shortfall in
female earnings, pay rates, and promotion rates has a high
degree of statistical
signifi cance.”
Wal- Mart’s expert witness, Joan Haworth, an economist who
had provided tes-
timony in more than fi ve dozen employment cases, reached
different conclusions
C
o
p
y
r
i
g
h
t
2
0
1
4
.

B
e
r
r
e
t
t
-
K
o
e
h
l
e
r
P
u
b
l
i
s
h
e
r
s
.
A
l
l
r
i
g

h
t
s
r
e
s
e
r
v
e
d
.
M
a
y
n
o
t
b
e
r
e
p
r
o
d
u
c
e
d

i
n
a
n
y
f
o
r
m
w
i
t
h
o
u
t
p
e
r
m
i
s
s
i
o
n
f
r
o
m

t
h
e
p
u
b
l
i
s
h
e
r
,
e
x
c
e
p
t
f
a
i
r
u
s
e
s
p
e
r
m

i
t
t
e
d
u
n
d
e
r
U
.
S
.
o
r
a
p
p
l
i
c
a
b
l
e
c
o
p
y
r

i
g
h
t
l
a
w
.
EBSCO Publishing : eBook Collection (EBSCOhost) - printed
on 5/31/2021 8:42 PM via POST UNIVERSITY (TRAURIG
LIBRARY)
AN: 667095 ; Joseph W. Weiss.; Business Ethics : A
Stakeholder and Issues Management Approach
Account: ns017336.main.eds
328 Business Ethics
regarding pay disparity at the giant retailer. She claimed that
“Drogin’s analyses
did not adequately take into account crucial factors, like the
number of hours
worked and whether they included night- shift work, which pays
more. But her
overarching criticism was that his approach amounted to
pretending that a single
person was making all promotion and pay decisions throughout
Wal- Mart na-
tionwide, when, according to depositions, most pay
determinations were made at
the store manager level or, in the case of certain specialty
department employ-
ees, at the district manager level.” She concluded that “more

than 90% of class
members worked at stores where women were statistically no
worse off than
men. Wal- Mart’s argument, then, was that if a class action
must be fi led, it should
be brought against the specifi c stores with disparities favoring
men.”
Class Action or Not?
Perhaps the most contentious issue in the Dukes v. Wal- Mart
Stores, Inc. case
has been whether or not a class action is warranted. A class -
action fi ling is af-
fected by Rule 23 of the Federal Rules of Civil Procedure,
which prescribes the
conditions under which class-action suits may be brought to
Federal courts. Rule
23(a) outlines the prerequisites for a class action. They are: “(1)
the class is so
numerous that joinder of all members is impracticable; (2) there
are questions of
law or fact common to the class; (3) the claims or defenses of
the representative
parties are typical of the claims or defenses of the class; and (4)
the representa-
tive parties will fairly and adequately protect the interests of the
class.”
Wal- Mart challenged the legal validity of a class action in the
case, arguing,
in a September 24, 2003 hearing before U.S. District Judge
Martin Jenkins, that
the lawsuit should be broken into separate class actions against
each of the
3,473 stores across the United States because decisions about
pay and promo-

tions are largely made at the store level. On June 22, 2004,
Judge Jenkins ruled
that six current and former Wal- Mart employees from
California may represent
all female employees of Wal- Mart who worked at its U.S.
stores anytime since
December 26, 1998. In his fi ndings, Judge Jenkins said that the
evidence pre-
sented by the plaintiffs “raises an inference that Wal - Mart
engages in discrimi-
natory practices in compensation and promotion that affect all
plaintiffs in a
common manner.”
Judge Jenkins’ ruling is potentially momentous because “Class-
action litiga-
tion is unlike a single plaintiff lawsuit in that the stakes are
enormous and the
exposure to a corporation increases geometrically if the
plaintiffs are success-
ful. The holy grail of class- action litigation for both sides is
the class certifi cation
decision. . . . Practically speaking, victory or defeat in the class
certifi cation pro-
cess casts the die for a corporation’s exit strategy from class -
action litigation.”
Enter the United States Court of Appeals for the Ninth Circuit
On appeal to the Ninth Circuit, located in San Francisco,
California, Wal- Mart
claimed that the proposed class failed to meet the commonality
prerequisite of
Rule 23(a)(2), since local store managers had autonomy in
making salary and
promotion decisions. However, “the plaintiffs said this hands -
off approach itself

EBSCOhost - printed on 5/31/2021 8:42 PM via POST
UNIVERSITY (TRAURIG LIBRARY). All use subject to
https://www.ebsco.com/terms-of-use
constituted the common policy that impacted class members—
arguing it fostered
discrimination by allowing individual managers to make
excessively subjective
decisions based on gender ste reo types.” In support of this
position, plaintiffs
presented evidence from an expert witness, sociologist William
Bielby, who
based his testimony on so- called “social framework analysis.”
Bielby testifi ed
that “a strong and widely shared or gan i za tion al culture
promotes uniformity of
practices throughout an or ga ni za tion,” and that such a culture
“could be inferred
from such factors as Wal- Mart’s emphasis on the company’s
found er and its his-
tory, a mission statement defi ned by core values, [and] frequent
communication
about the culture to employees.” Allan King, an interested
observer who has a
doctorate in labor economics and a law degree, says, “There is
no such thing as
social framework analysis. . . . But it will be a challenge for
defendants to per-
suade the court that what they [i.e., plaintiffs’ expert witnesses]
regard as a
methodology is not.” Ultimately, the Ninth Circuit used

Bielby’s testimony to
support its fi nding that commonality had been demonstrated for
the class.
The court wrote, “Evidence of Wal- Mart’s subjective decision-
making policy
raises an inference of discrimination and provides further
evidence of a com-
mon practice.”
On February 6, 2007, the United States Court of Appeals for the
Ninth Cir-
cuit affi rmed, on a 2– 1 vote, U.S. District Court Judge Martin
Jenkins’ decision to
certify a class that had grown to approximately 2 million w omen
in the lawsuit
against Wal- Mart. The class includes the more than 2 million
women who have
worked at any of the company’s more than 4,000 retail stores
nationwide since
December 26, 1998. Writing for the majority, Judge Harry
Pregerson “deferred
to the district court’s ‘broad discretion’ to certify and did not
amend any of its
fi ndings.” Most of the Ninth Circuit Court’s opinion addressed
the commonality
prerequisite of Rule 23(a)(2). The Ninth Circuit’s opinion said
that “Plaintiffs
demonstrated that Wal- Mart had a corporate policy of
discrimination (because
the policy was corporate- wide, it would be in effect at every
Wal- Mart store
and thus would be common to every female Wal- Mart
employee).” However, in
a strongly worded dissent, Judge Andrew J. Kleinfeld said the
appellate deci-
sion “poses a considerable risk of enriching undeserving class

members and
counsel, but depriving thousands of women actually injured by
sex discrimina-
tion their just due.”
In response to the Ninth Circuit’s ruling, Theodore J. Boutrous
Jr., an attorney
representing Wal- Mart, said, “We recognize this is another step
in what is going
to be a long pro cess. It’s a technical legal ruling that only
certifi es the lawsuit as a
class action, but does not address its merits.” Boutrous also
expressed the be-
lief that Wal- Mart has a strong argument for obtaining further
review from either
the full Ninth Circuit Court or the United States Supreme Court,
“because the
majority rule confl icts with many Supreme Court decisions as
well as many
recent decisions from other appellate courts around the country
that ‘have re-
jected precisely the direction taken by the [Ninth Circuit]
court.’ ” However, Brad
Seligman, representing the Wal- Mart plaintiffs, said the
appellate court was now
the second court to rule on the class certifi cation issue and “it’s
clear Wal- Mart
330 Business Ethics

is going to have to face the music and justify its practices, and
we are very opti-
mistic this case will ultimately be returned to trial.” In fact,
Wal- Mart asked the full
Court of Appeals for the Ninth Circuit to reconsider the 2– 1
approval of the class.
In May 2011, the Supreme Court started hearing the Dukes v.
Wal- Mart
Stores, Inc. case. In June, “the Court ruled that the case could
not proceed be-
cause the 1.5 million current and former Wal- Mart employees
suing the company
for alleged sex discrimination could not legally constitute a
‘class.’ ” Therefore,
Wal- Mart successfully defended its position, and from then on
the criteria for get-
ting a class-action suit approved has been much stricter.
Potential Implications of Dukes v. Wal- Mart Stores, Inc.
Observers say the 2– 1 decision by the Ninth Circuit Court of
Appeals does not
break any new legal ground even though it could end up costing
Wal- Mart bil-
lions of dollars. Rather, the primary signifi cance of the ruling
is the unpre ce dented
size of the class action. Anthony J. Oncidi, an attorney with
Proskauer Rose LLP
in Los Angeles, said Judge Kleinfeld’s strong dissent in the 2–1
ruling suggests
that other Ninth Circuit judges may also believe that the 2– 1
majority ruling is not
really appropriate, which could lead to a reexamination by the
full appellate
court. Ultimately, the Supreme Court “may respond to business
community de-

mands that it ‘tighten up class certifi cation’ in the same way it
tightened rules on
punitive damages.”
Although Dukes v. Wal- Mart, Inc. may not break any new legal
ground, em-
ployers nonetheless may want to rethink their practices. As
Susie Gibbons, an
attorney with Poyner & Spruill L.L.P. in Raleigh, North
Carolina, says, “The huge
potential liability of this case represents an expansion of the
class action vehicle
as a weapon of attack against employers, and it should cause all
companies of
any size to review their own hiring and promotional practices. .
. . If I were a risk
manager at a company, I would want to analyze this case to look
at what the
vulnerabilities were that ended up causing this problem for
Wal- Mart.” Writing in
Fortune magazine, Roger Parloff and Susan Kaufman point out
that although
racial or gender quotas and preferences are illegal, “they will
obviously be tempting
to employers who want to avoid being hit with class- action
employment discrimi-
nation lawsuits. For there is only one sure- fi re way to
inoculate oneself against
such suits, and that is to have workforce numbers that look good
even when ana-
lyzed by a plaintiffs’ expert. And the cheapest and fastest way
to get those is to
use quotas or preferences.”
Mary Swanton, writing in InsideCounsel, says that “employers
can use the

fi ndings in Dukes to assess their vulnerabilities. For example,
companies could
test how their corporate culture would stand up to a
sociologist’s analysis. They
also could look at how their decision- making pro cesses can be
made more
objective and whether they have pro cesses in place to ensure
their managers
implement non- discrimination policies.” Meg Campbell, with
Ogletree, Deakins,
Nash, Smoak & Stewart, says, “If they [employers] take the
lesson of this court’s
analysis and look at what they are doing and how they can do it
better, they’ll put
themselves in the best defensive posture in the event of
litigation.”
Parloff and Kaufman also remark, “The Wal- Mart rulings could
end up repre-
senting a high- water mark. . . . The underlying legal battles
seem destined for the
[United States] Supreme Court. The urgent question is whether
the current
[Supreme] Court with its staunchly conservative fi ve- justice
majority, sharp aver-
sion to race- conscious remedies, and weak respect for prior pre
ce dent will al-
low this situation to persist. The Wal- Mart suit may be the case

that gives us
the answer.”
Questions for Discussion
1. Based on the stated human resources philosophy of Wal-
Mart, would it be
likely that the company would discriminate based on gender
differences?
Explain.
2. Put yourself in the role of the plaintiffs. What ethical
arguments would you
offer in support of their allegations?
3. Put yourself in the role of Wal- Mart. What ethical arguments
would you offer
to counter the plaintiffs’ allegations?
4. What do you think the plaintiffs meant by their allegation
that Wal- Mart’s
culture is a signifi cant contributor to gender discrimination?
5. Is a class action against Wal- Mart justifi ed? Explain your
position.
6. Explain how the outcome of Dukes v. Wal- Mart Stores, Inc.
is important for
major stakeholders in the case, including the American society.
Sources
Wal- Mart’s corporate web site asserts that: “Wal- Mart will not
tolerate discrimination
in employment on the basis of race, color, age, sex, sexual
orientation, religion,

disability, ethnicity, national origin, veteran status, marital
status or any other
legally- protected status.” Against this backdrop of professed
commitment to equal
opportunity, Wal- Mart faces an ongoing battle in the gender
discrimination class
action suit Dukes v. Wal- Mart Stores, Inc. fi led on June 19,
2001 in United States
District Court for the Northern District of California.
This case was developed from material contained in the
following sources:
Burns, G. (September 4, 2003). Class action no bargain for Wal-
Mart: 1.5 million
could be added to bias suit by women. Chicago Tribune. http://
www .againstthewal
.com /new _page _4 .html #Class _action _no _bargain _for
_Wal -Mart, accessed April
27, 2008.
Civil Rights Act of 1964, Section 3. (1964). http:// memory .loc
.gov /ammem /awhhtml
/awlaw3 /civil .html, accessed April 27, 2008.
Drogin, R. (2003). Statistical analysis of gender patterns in
Wal- Mart workforce.
Berkeley, CA: Drogin, Kakigi & Associates, 46. http:// www
.walmartclass .com
/static data /reports /r2 .pdf, accessed April 27, 2008.
Dukes v. Wal- Mart Stores, Inc. First amended complaint, 2.
http:// www .coalitointlc
.org /dukeswalmart61901 .pdf, accessed April 27, 2008.
Fanibanda, B. D. (2007). Dukes v. Wal- Mart: The expansion of

class certifi cation as a
mechanism for reconciling employee confl icts. Berkeley
Journal of Employment &
Labor Law, 28(2), 591.
Greenwald, J. (February 12, 2007). Biggest- ever bias suit may
fuel tort trend.
Business Insurance, 41(7), 1.
332 Business Ethics
Greenwald, J. (February 12, 2007). Companies urged to examine
employment
practices. Business Insurance, 41(7), 29.
Maatman, G. L., Jr. (September 5, 2005). “Dukes” class action
may be hazardous:
Employment practices exposure cited as courts assess gender
discrimination.
National Underwriter Property & Casualty, 35.
Parloff, R., and S. M. Kaufman. (October 15, 2007). The war
over unconscious bias.
Fortune, 156(8), 100.
Rittgers, Anna. (June 22, 2011). Wal- Mart v. Dukes ruling
actually protects women—
and all Americans. Christian Science Monitor. http:// www
.csmonitor .com
/Commentary /Opinion /2011 /0622 /Wal -Mart -v . -Dukes -

ruling -actually -protects
-women -and -all -Americans, accessed January 7, 2014.
Rule 23. Class actions (a) Prerequisites to a class action. Rule
23 of the Federal
Rules of Civil Procedure, 507. http:// www .rand .org /pubs
/momgraph _reports
/MR969 /MR969 .appa .pdf, accessed April 27, 2008.
Swanton, M. (April 4, 2007). Dukes of hazard: 9th Circuit
decision paves way for
massive discrimination class actions. InsideCounsel, 24.
Wal- Mart statement of ethics. (Revised January 1, 2005).
http:// www .walmartstores
.com/medi/resources/r_2032.pdf, 13, accessed April 27, 2008.
Due Date: 11:59 pm EST Sunday of Unit 5
Points: 100
Overview:
Corporate responsibility toward consumers should guide all
companies. Businesses
have legal and moral obligations to provide their consumers
with safe products without
using false advertising and without doing harm to the
environment. Ethical companies

also practice fair and equitable hiring and employment
practices. These case studies
address unethical and occasionally illegal practices some
companies have engaged in.
Instructions:
Choose one of the following three case studies and use the
questions to guide your
response:
1. Case Study 12: For-Profit Universities: Opportunities, Issues,
and Promises
a. Research for-profit universities in the news and reference at
least one
article published in the last 6 months in your case study
analysis that
addresses the role of for-profit universities.
b. Identify some of the major stakeholders and issues cited in
the case study
and in your research findings.
c. Based on your knowledge of for-profit universities, provide
an analysis of
the role of these universities in higher education with respect to
corporate
responsibility.
2. Case Study 14: Neuromarketing
a. Define neuromarketing referencing both the case study and an
article you

locate on the topic.
b. Based on the case study and your research on the topic, is
neuromarketing unethical or is it an innovative business
practice? Explain
your response.
c. What moral responsibilities, if any, should marketing
companies have –
especially those firms using neuromarketing techniques? How
does
corporate responsibility enter into the strategy? Explain.
BUS340 – Business Ethics
Stakeholders and Corporate Responsibility Case Study
3. Case Study 15: Wal-Mart: Challenges with Gender
Discrimination
a. Provide a summary of the issues Wal-Mart has faced with
gender
discrimination using both this case study and an article you
locate on the
topic published in the last 6 months.
b. What arguments would Wal-Mart offer to counter the
plaintiffs’
allegations?
c. Explain how the outcome of Dukes v. Wal-Mart Stores, Inc.
is important
for major stakeholders in the case, including the American

society and
expectations of corporate responsibility.
Requirements:
• A Word document, written in third person with no use of first-
person “I.”
• 2-3 pages, excluding the Title and Reference page.
• APA format, including in-text citations for referenced works.
• Two resources cited, the textbook by Weiss and at least one
additional source.
Be sure to read the criteria by which your work will be
evaluated before you write
and again after you write.
Evaluation Rubric for Case Study Assignment
CRITERIA Deficient Needs
Improvement
Proficient Exemplary
(0-26 Points) (27-35 Points) (36-44 Points) (45 Points)
Content Does not
respond to the
writing prompt,
addressing

each of the
required
elements in an
academic
voice.
Somewhat
responds to the
writing prompt,
addressing each
of the required
elements in an
academic voice.
Mostly
responds to the
writing prompt,
addressing
each of the
required
elements in an
academic
voice.
Responds fully
to the writing
prompt,
addressing
each of the
required
elements in an
academic
voice.
(0-5 points) (6-7 points) (8-9 points) (10 points)
Summary and

Paraphrase
Does not rely
on summary
and
paraphrase to
demonstrate
understanding;
significantly
more than 10%
is direct quote.
Somewhat relies
on summary and
paraphrase to
demonstrate
understanding;
more than 10%
is direct quote.
Mostly relies on
summary and
paraphrase to
demonstrate
understanding;
slightly more
than 10% is
direct quote.
Relies on
summary and
paraphrase to
demonstrate
understanding;
no more than
10% of the

submission is
direct quote.
Resources 0-1 resource. 1 resource. 1-2 resources,
including
Weiss.
2 resources,
including
Weiss.
Page Count Less than 1
page.
1 page. 2 pages. 3 pages.
(0-14 points) (15-19 points) (20-24 points) (25 points)
Clear and
Professional
Writing and
APA Format
Errors impede
professional
presentation;
guidelines not
followed.
Significant errors
that do not
impede
professional
presentation.
Few errors that
do not impede

professional
presentation.
Writing and
format are
clear,
professional,
APA compliant,
and error free.

5 Consumer Stakeholders and the Environment 327Ca

Recommended

Recommended

More Related Content

Similar to 5 Consumer Stakeholders and the Environment 327Ca

Similar to 5 Consumer Stakeholders and the Environment 327Ca (20)

More from MargaritoWhitt221

More from MargaritoWhitt221 (20)

Recently uploaded

Recently uploaded (20)

5 Consumer Stakeholders and the Environment 327Ca