The Five Biggest Walmart Lawsuits in Company History
A representative action, class suit or class action is a lawsuit where the parties involved form a group where they are represented collectively by an appointed member of that group. This type of law suit originated in the United States, but Canada and some European nations have made provisions in their laws to allow consumer organizations, that protect the rights of consumers, to institute legal proceedings on behalf of the consumers. A class action differs drastically from a traditional law suit. This is because in this type of law suit the plaintiff, on behalf of other absent parties, institutes proceedings against a defendant or group of defendants. This is done in pursuit of a remedy for a wrongful act committed by the defendant or defendants. While the standards set for class actions differ from state to state or countries, the proceedings usually involve not less than 40 people. The plaintiffs must have been injured by the defendant or defendants in the same manner. Walmart has over the years found itself being a party to such proceedings.
Below are some of the most notorious lawsuits Walmart has faced as a company:
1. Walmart stores, Inc. v. Dukes
This is a matter that was heard in the United States Supreme court in 2011. The parties, being unsatisfied with decision of the 9th circuit court made an appeal to the Supreme Court for redress. The Supreme Court reversed the decision of the District court by a 5-4 decision. The suit was instituted by 1.6 million women who currently worked for Walmart Stores and those who had been employees of the enterprise. The lead plaintiff Betty Dukes sued the company for discrimination on gender basis in regards to promotion practices and policies, and remuneration of female workers. Some of the issues that were debated upon in this matter included: whether the action met the traditional requirements for a class action in regards to adequacy of representation, commonality, typicality, and numerosity; the court was also tasked with the duty of establishing whether the Federal Rules of Civil procedure, rule 239(b)(2) was applicable in the matter. After hearing the arguments of both sides, the Supreme Court ruled in favor of Walmart Stores. It ruled that the class action could be heard or certified in its current form. The court also ruled that the plaintiffs did not have enough commonality to constitute the class action. This was because the plaintiffs’ cases heard major variabilities in terms of their circumstances.
2. EEOC ( Janice Smith) vs Walmart Stores Inc
The lead plaintiff in this matter was The Equal Employment Opportunity Commission. The lawsuit was on grounds of sexual discrimination of women workers in Walmart Stores. The suit was heard in the Eastern District court of Kentucky in 2001. The plaintiffs averred that the hiring decisions made by Walmart’s distribution center were gender biased. This, according to the plaintiffs, was against the provisions of the Civil Rights Act of 1964. In their prayers, the plaintiffs asked the court to grant them prospective affirmative reliefs, injunctions and pays for the females who were discriminated against during the selection process. The matter was settled out of court with Walmart agreeing to pay the aggrieved parties a total of 11.7 million Dollars in back pay and damages.
3. Walmart Vs City of Pontiac, Michigan, General Employees Retirement System 2012
In this matter, Walmart agreed to settle in a bid to end the fraud allegations made against it. This is following the investigations made against the retail giant. According to the allegations, Walmart was operating contrary to the Federal Corruption Practices Act in Brazil, China, India and Mexico. The matter was heard before the Securities and Exchanges Commission. The settlement agreement directed Walmart to pay monies to the tune of 160 million Dollars to the investor class. In return, Walmart would accept no liability, wrongdoing or claim of guilt in its operations. The matter was originally filled in United States District Court of Fayetteville. The lead plaintiff in this matter was the retirement fund.
4. Brown v. Walmart Inc
This matter was heard in the United States District court of The Northern District of California. Walmart failed to defeat the class certification. Additionally, Walmart failed at challenging the plaintiffs who seeked redress for seating violations. The court described Walmarts actions of trying to defeat the matter as an act in futility. During the proceedings Walmart made arguments in regards to cashier’s duties that had been, earlier on, vehemently denied by the District Court. The court ordered Walmart to pay a total of $65 million in damages.
5. Smith Vs Walmart Stores Inc 2003
In this matter, Walmart agreed to pay 1.6 million Dollars in a bid to avert a potential class action suit by the plaintiffs. The plaintiffs took the retail giant to court alleging that it improperly mislabeled the pay stubs of certain employees with the words Walmart or Wal-mart instead of the legally accepted full company name. Additionally, the plaintiffs accused Walmart and its management of: fraudulent concealment, fraud, breach of contractual rights, conversion and civil conspiracy. The plaintiffs claimed that the company had failed to compensate them properly for their rightfully earned money. They claimed this happened because the management manipulated their time sheets. In addition to this claims, the plaintiffs sued for false imprisonment claiming that the defendant, from to time, locked them up in the store with no permission to leave. This matter is cited as Smith v. Wal-Mart Stores, Inc., 305 F. Supp. 2d 652 (S.D. Miss. 2003). According to legal experts, if this action is ruled in favor of the plaintiffs, Walmart will be forced to compensate the plaintiffs hundreds of millions of dollars in damages and back pays.
Generally, lawsuits cost both the plaintiffs and defendants huge amounts of money. This is is because they are time consuming and complex in nature. In order to expedite matters, most parties to these kinds of suits opt for out of court settlements. These settlements are recognized and enforced by courts of law.