Women File Wal-Mart-sized Suit

Everything about the world’s biggest retailer is, well, big.

Now Wal-Mart Stores Inc., also the country’s biggest employer, faces the biggest class-action lawsuit ever in a civil case — a suit that could affect 1.6 million current and former female employees.

Wal-Mart has reached the size, like other giant companies in the past, that attracts a lot of attention — much of it negative publicity over its size and fear of ruining smaller businesses in communities.

Even presidential candidate Ralph Nader on his recent campaign swing through Arkansas called Wal-Mart a symbol of much of what’s wrong in the nation.

Only in the past year has Wal-Mart seemed to awaken to the fact that it is a company under attack. It has begun a PR counteroffensive, cranking out positive advertisements and sensitive new policy announcements.

But the reality of such a large suit is that, sooner or later, there is likely to be a settlement. That settlement could cost Wal-Mart billions of dollars. And it should, if the allegations against the company are true.

The plaintiffs claim Wal-Mart pays female employees less than their male counterparts and that it bypasses women for top managerial jobs.

The pay charge can be backed up with statistics. According to a study presented by the plaintiffs, women at Wal-Mart earned about 5 percent less than men with similar experience doing similar jobs.

And while two-thirds of the hourly workers for the company are women, only a third of managers are women. The promotion charge will be harder to prove since there could be numerous reasons why women might not want to be in management positions.

The company has begun to change its personnel practices. A new job classification and pay structure for hourly employees was announced at last month’s annual shareholders meeting. The company also has added a director of diversity and a compliance team.

With $256 billion in revenue and $9 billion in net income last year, Wal-Mart could survive a big payoff if the court goes against it. But who can assess what impact the negative publicity about the case will have on shoppers? On employees? And what impact will it have on future earnings?

Although a protracted legal battle poses a risk to the company’s public image, we don’t view Wal-Mart as the source of all evil, like some. Still, we look for a settlement in the future. No doubt, other companies also will be keeping a close watch on what happens.