A class has been certified in a case against Costco Wholesale Corp. Workers who sued the retailer for gender bias will be able to proceed with their claims as a group. U.S. District Judge Edward Chen in San Francisco certified a class of Plaintiffs who are seeking monetary relief. The class includes several hundred women employed since 2002 who have been subject to the company’s system for promotion to management positions. Judge Chen said in his order:
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.
Costco, the largest U.S. warehouse-club chain, was sued in 2004 for allegedly limiting promotions of female employees to assistant general manager and general manager by failing to post job openings. The company denies the claims. This ruling is significant since Costco had won a ruling last year voiding another judge’s decision to expand the complaint into a class action. The suit was originally filed by three women and sought to include hundreds. It was established that there was a set of company policies set at the corporate level and that senior management was involved in the decisions. Bob Nelson, a spokesman for Costco, didn’t immediately return a phone message seeking comment on the ruling.
A federal appeals court in San Francisco ruled last year that lawyers for the Costco workers had to follow standards set by the U.S. Supreme Court in a June 2011 decision throwing out a gender-bias lawsuit, known as the Dukes case, against Wal-Mart Stores Inc. involving potential claims for more than 1 million women. Lawyers for Costco workers went back to the trial court with a new proposal to limit the proposed class of employees to two management level positions — assistant general manager and general manager – and that satisfied the court. They also targeted specific employment practices implemented companywide under the influence and control of top management at Costco, including a “tap-on-the shoulder appointment process” without applications or interviews, and a mandated lack of posting for open positions. Judge Chen, explaining why the Dukes case didn’t control, wrote:
Unlike in Dukes, in which Wal-Mart permits store managers to apply their own subjective criteria when selecting candidates, here the criteria plaintiffs allege to be subjective and unvalidated derive from top management’s own instruction.
Judge Chen has set a tentative trial schedule. In the first stage, a jury would decide whether Costco discriminated against women. The court then would decide whether Costco’s practices had an adverse impact on the group and if he should issue an injunction against the company. Depending on the outcome, individual hearings on back pay and compensatory damages would be held and punitive damages would be determined. The case is Ellis v. Costco, 07-15838, U.S. Court of Appeals for the Ninth Circuit (San Francisco).
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