A U.S. judge Tuesday certified a class action suit that accuses Costco Wholesale Corp. of discriminating against its female employees.
With the judge’s decision, the lawsuit has expanded from three original plaintiffs to include approximately 700 women who say the retailer’s promotion policy limited the advancement of female employees. According to the suit, the company frequently failed to post openings for warehouse manager and assistant manager positions, instead promoting workers without a formal interview or application process.
Another judge had already certified the case in 2007, but its progress through the courts stalled when Costco appealed that decision to the 9th Circuit. The appeals court postponed its ruling hold pending a Supreme Court decision in Wal-Mart v. Dukes. After the Supreme Court threw out Dukes—ruling that the plaintiffs did not have enough in common to constitute a class—the Costco suit headed back to court.
In his ruling, U.S. District Judge Edward Chen differentiated between the Costco case and Dukes, noting that the size of the current class is significantly smaller than that in Dukes and that decisions about hiring and promotions are more centralized at Costco than at Wal-Mart. He also cited plaintiffs’ evidence suggesting that the company has a documented diversity problem, including one figure stating that women received only 103 of 561 promotions to assistant general manager over a five-year period. According to Chen, Costco “offers numerous competing explanations for the observed gender disparity in promotions. None of these explanations undermine the companywide nature of the challenged policies and their disparate effects.”
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