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Judge Certifies Civil Rights Class Action Vs. Wal-Mart

A federal judge Tuesday certified a class-action status for a sex-discrimination lawsuit that accuses Wal-Mart Stores Inc. (WMT) of discriminating against women.

The lawsuit, which has become the largest private civil rights case in U.S. history, could represent as many as 1.6 million current and former female employees of the retailing giant.

The lawsuit, filed in 2001, alleges Wal-Mart created a system that frequently pays its female workers less than their male counterparts for comparable jobs and bypasses women for key promotions.

Wal-Mart, the nation's largest private employer, sought to limit the scope of the lawsuit that was filed three years ago.

A Wal-Mart spokeswoman told The Associated Press earlier Tuesday that the Bentonville, Ark.-based company will appeal and is confident that it does not discriminate against women employees.

No trial date was set.

Legal experts have said that settling the case could cost Wal-Mart hundreds of millions of dollars or even into the billions. Most large class-action lawsuits in the United States are settled before they go to trial.

On the New York Stock Exchange (search), Wal-Mart shares fell 97 cents, or 1.8 percent, to $53.96 and were the Dow's biggest percentage losers.

U.S. District Court Judge Martin Jenkins took nine months to decide whether to expand the lawsuit to include virtually all women who work or have worked at Wal-Mart's 3,500 stories nationwide since 1998.

Wal-Mart has previously denied a pattern of discrimination and argues that the number of men in management positions reflects the higher number of applications it receives from men.

The ruling is pivotal because it gives lawyers for the women tremendous leverage as they pursue punitive damages, back pay and other compensation.

"I think it's a terrific victory for the women who work at Wal-Mart who have labored for years under working conditions where they have been told repeatedly they have been unsuitable for management and not suitable to make as much as men," said Joseph Sellers, one of the attorneys representing the women.

Betty Dukes, one of the women spearheading the suit, said she was paid just $8.44 per hour during her first nine years working at a variety of positions at Wal-Mart's store in Pittsburg, Calif., while several men holding similar jobs but less seniority earned $9 per hour.

Williams said the ruling has nothing to do with the merits of the case.

"Judge Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action," Williams said.

The Wal-Mart spokeswoman said the company is evaluating its employment practices.

"Earlier this month Wal-Mart announced a new job classification and pay structure for hourly associates," Williams said. "This new pay plan was developed with the assistance of third-party consultants and is designed to ensure internal equity and external competitiveness."

In a hearing last September, company attorneys urged Jenkins to allow so-called mini-class action lawsuits targeting each outlet. Wal-Mart contends its stores operate with so much autonomy that they are like independent businesses with different management styles that affect the way women are paid and promoted.

The case already has generated 1.25 million pages of evidence and 200 sworn depositions.

The trial is expected to start with the women trying to demonstrate that Wal-Mart has a pattern of paying women lower wages and passing them over for promotions. Wal-Mart would then get a chance to dismantle that theory.

If a judge or jury found Wal-Mart did have a pattern of discrimination, a second phase of the trial would let the plaintiffs seek damages.

Reuters and the Associated Press contributed to this report.