As we continue to watch oil gush relentlessly into the Gulf of Mexico, we are watching another type of gusher seep relentlessly forward. As with BP, there were internal warnings that all systems may not have been quite right. Yet, Wal-Mart Stores now finds itself defending a massive class action suit alleging widespread gender discrimination with respect to compensation and promotional practices.
As reported June 3, 2010 in the New York Times, Wal-Mart hired a major law firm to conduct an audit of company employment practices some six years before the class action suit was filed. The law firm’s investigation report was handed to Wal-Mart in 1995 and found widespread patterns of gender discrimination in pay and promotional practices, favoring males over females. The law firm recommended to its client (Wal-Mart) that a number of proactive steps be taken to reduce potential legal exposure. According to the news story, senior-level HR executives had expressed concern with respect to lack of progress on these issues in 2000 and again in 2002. Six years after the law firm completed the audit, the class action gender discrimination suit was filed. Wal-Mart now discredits the report. Whether the report will be allowed into evidence at trial will be an issue for the court.
While we do not profess to know the final outcome nor exact merits of the Wal-Mart case (Dukes v. Wal-Mart), we do know there were red flags and fair warnings early on that there were risks upon the horizon. Oh, those pesky lawyers and HR-types!
As we noted in our February 17, 2010 Blog posting, discussion with respect to legal compliance issues is a critical component in framing the corporate culture. Win, lose or draw, both BP and Wal-Mart have their hands full.
Rick and Christina