Wal-Mart's Womanly Woes

Wal-Mart (NYSE: WMT) has seen its share of labor troubles in the last few years. In addition to repeated calls to unionize its enormous workforce (which Wal-Mart staunchly opposes), a suit filed two years ago alleging gender discrimination could become the largest civil rights lawsuit ever if it's granted class action status.

Six female plaintiffs say that Wal-Mart unfairly denied them promotions and pay raises based strictly on their gender. Their lawyers want the case opened up to current and former Wal-Mart and Sam's Club employees dating back to 1998. They'll have to prove that their clients' experiences with Wal-Mart are representative of all the company's female employees to qualify for class status.

The charges of gender discrimination and descriptions from former employees of a "good old boy" atmosphere have gotten Wal-Mart's attention. Witness the conspicuous television commercials the retailer has run that prominently feature female employees and managers talking about how great it is to work for Wal-Mart. It's clearly been trying to counter all the bad press with a positive blitz of its own.

Wal-Mart acknowledges that some individual local store managers acted badly, but it says there is no top-down mandate to promote men ahead of women. The suit argues, though, that a centralized policy of discrimination does exist within the Arkansas-based company.

A federal judge will begin hearing arguments today about granting class action certification for the suit. Approval would give the plaintiffs much more power, and could potentially transform the lawsuit from a public relations headache into a financial issue for Wal-Mart.

The judgment, whichever way it turns out, will most likely be appealed by the other side, however. That means it will still be some time before shareholders can weigh for themselves the risks of the suit.