Discriminatory Pay And Promotion Practices Can Expose Employers To Costly Consequences

by | Apr 30, 2010 | Law Alerts

Earlier this week, in a case involving sex discrimination claims based upon disparate pay and promotion practices against women employees, the U.S. Court of Appeals for the 9th Circuit, certified one of the largest civil class actions ever. Ten years after the suit was filed (Betty Dukes, et al. v. Wal-Mart Stores, Inc.), it has now been determined that over 500,000 women employees will be allowed to pursue their claims against the retail giant Wal-Mart together as a class.

Betty Dukes alleged that, after complaining to her supervisor, she was demoted to cashier and was discouraged from applying for managerial positions. In 2000, Ms. Dukes, along with six other women, filed their class action lawsuit, on behalf of all women employed at any Wal-Mart domestic retail store at any time since December 26, 1998. Ms. Dukes and her co-plaintiffs asserted claims under Title VII of the 1964 Civil Rights Act alleging that women employed in Wal-Mart stores:

(1) are paid less than men in comparable positions, despite having higher performance ratings and greater seniority; and

(2) receive fewer, and wait longer for, promotions to in-store management positions than men.

Even though the 9th Circuit’s opinion did not address the substantive nature of the claims and addressed only class certification issues, this case highlights the potential consequences of discriminatory pay and promotion practices. Here, Wal-Mart has been embroiled in litigation for 10 years and faces a class size of approximately 500,000 employees.

When employment-related cases make the news, they serve as good reminders for all employers to have their employment practices and procedures reviewed to ensure that they are in compliance with local, state, and federal laws and regulations. After all, an ounce of prevention is worth a pound of cure. While employers are well-advised to be pro-active in attempting to minimize exposure, it doesn’t happen by itself.

This is especially true today when federal governmental agencies have announced a number of initiatives and have hired staff specifically to enforce:

  • Immigration reform and compliance (e.g., unannounced I-9 sweeps by ICE)
  • FLSA compliance (e.g., DOL inspections to ensure proper categorization of Independent Contractors and W-2 employees; and
  • OSHA/health and safety compliance.

As part of the wide array of Employment Law Compliance and Defense services Schwarzberg & Associates offers, we provide the following to our clients:

Creating and/or updating Employee Handbooks; Review and/or design of employment policies and practices regarding:

  • Employee hiring, compensation, evaluation and promotions;
  • Harassment, discrimination, and retaliation;
  • Use of Social Media;
  • Hurricane and emergency preparedness plans;
  • Employee discipline, coaching, and development; and
  • Termination practices, and strategic use of severance and separation agreements


  • Sexual Harassment, Diversity, and Sensitivity Training (manager and employee);
  • Preventing and responding to reports of harassment, discrimination and retaliation;
  • Wage and Hour compliance including timekeeping and recordkeeping; and
  • Record retention, litigation holds, and e-discovery related to litigation.

Employment Audits:

  • FLSA (Wage and Hour) audit of employee classification as exempt or non-exempt (i.e., entitled to overtime or not);
  • Job Descriptions (compliance with Americans with Disabilities act and the FLSA, etc.);
  • Proper categorization of employees and independent contractors;
  • Equal Pay Audits
  • Intellectual Property (non-competes and steps to prevent misappropriation of trade secrets and proprietary information); and
  • An assessment of your litigation exposure in general.

This checklist is just a sample of the services that we provide to our clients customized to meet each client’s circumstances. Whether helping clients to remain in compliance and avoid claims or vigorously defending claims brought against our clients, our team of employment law attorneys is available to help.

The Schwarzberg & Associates Employment Law and Compliance Team has extensive experience in developing effective policies, procedures and proactive responsive measures to deal with a myriad of workplace issues. Please do not hesitate to contact one of our members; Steve Schwarzberg or Lisa Kohring at (561) 659-3300 to obtain more information about our firm and its various employment law compliance and defense services.

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