The suit, originally filed on behalf of six women workers, alleges Wal-Mart set up a system that frequently pays its female workers less than their male counterparts for comparable jobs and bypasses women for key promotions.
Wal-Mart, the nation's largest private employer and the world's biggest retailer, sought to limit the scope of the lawsuit filed in San Francisco three years ago.
U.S. District Judge Martin Jenkins took nine months to decide whether to expand the lawsuit to include virtually all women who work or have worked at Wal-Mart's 3,500 stories nationwide since 1998. His ruling makes the lawsuit targeting the Bentonville, Ark.-based retailing powerhouse the nation's largest class action. A trial date has not been set.
The decision that the case merits class action was pivotal because it gives lawyers for the women tremendous leverage as they pursue punitive damages, as well as back pay and other compensation. Without the muscle provided by a class action, they might have had a hard time finding attorneys to pursue their cases against the retail giant.
"I think it's a terrific victory for the women who work at Wal-Mart who have labored for years under working conditions where they have been told repeatedly they have been unsuitable for management and not suitable to make as much as men," said Joseph Sellers, one of the attorneys representing the women.
Mona Williams, a company spokeswoman, said, "Today's ruling has absolutely nothing to do with the merits of the case.
"Judge Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action. We strongly disagree with his decision and will appeal."
CBS News Legal Analyst Andrew Cohen says Jenkins' decision "is clearly a defeat" for Wal-Mart.
"Wal-Mart would have loved to have knocked this case out at this stage," says Cohen. "But, it is not a ruling on the merits of the case, and it does not mean that Wal-Mart ultimately won't prevail if and when the case gets to trial."
Wal-Mart's plans to appeal, Cohen says, "probably will add years to the length of this case."
In a daylong hearing in September, company attorneys urged Jenkins to allow so-called mini-class action lawsuits targeting each outlet. Wal-Mart contends its stores, including Sam's Club warehouse outlets, operate with so much autonomy that they are like independent businesses with different management styles that affect the way women are paid and promoted.
Pursuing the allegations as a single class action "is absolutely unmanageable on a nationwide basis," Wal-Mart lawyer Paul Grossman argued to Jenkins. "It would require a mind-boggling number of individual determinations."
But Jenkins ruled that a 1964 congressional act, passed during the civil rights movement, prohibits sex discrimination and that giant corporations are not immune.
In addition, the judge said the women put on enough anecdotal evidence to warrant a class-action trial.
Jenkins decided that the "plaintiffs present largely uncontested descriptive statistics which show that women working at Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time, that women take longer to enter management positions, and that the higher one looks in the organization the lower the percentage of women."
Jenkins found that the evidence so far "raises an inference that Wal-Mart engages in discriminatory practices in compensation and promotion that affect all plaintiffs in a common manner."
Wal-Mart contends the suit ignores the thousands of women who earn more than their male counterparts. The retailer also says the lawsuit's allegations are flawed because they don't consider the factors that cause one job to pay more than another. For instance, some sales jobs require a gun license, while others pay a premium for workers skilled in handling live crickets sold for fishing, Grossman said.
The high-stakes case has already produced 1.25 million pages of evidence and 200 sworn depositions since the lawsuit was filed in June 2001.
The trial is expected to play out in at least two phases. It would start with the women trying to demonstrate that Wal-Mart has a pattern of paying women lower wages and passing them over for promotions. Wal-Mart would then get a chance to dismantle that theory.
The next phase, if a judge or jury found Wal-Mart did have a pattern of discrimination, would let the plaintiffs seek damages. With so many women in the case, the plaintiffs attorneys have developed a mathematical model to help them determine how much each plaintiff was owed — whether for wages or because they were passed over for promotion.
Betty Dukes, one of the women spearheading the suit, said she was paid just $8.44 per hour during her first nine years working at a variety of positions at Wal-Mart's store in Pittsburg, Calif. Meanwhile, several men holding similar jobs but less seniority earned $9 per hour, Dukes said.
Since the suit was filed, Dukes' pay was increased to at least $10.87 per hour, but she suspects she might have been earning more if Wal-Mart had done a better job alerting her and other women to management openings. Wal-Mart didn't require job vacancies to be posted nationally until last year, Seligman said.
The case is Dukes v. Wal-Mart Stores Inc., 01-2252.