Wal-Mart decision may affect Costco class action

Posted on: July 5th, 2011 by Steve Larson

Costco Wholesale Corp. may be able to block women accusing it of gender bias from suing as a group because of the U.S. Supreme Court’s decision in a discrimination suit against Wal-Mart Stores Inc.  The women sued Costco in 2004, accusing the largest U.S. warehouse-club chain of limiting promotions of female employees to assistant general manager and general manager by failing to post such job openings.  They won the right to sue as a group in a class action in 2007.  Costco’s appeal of that order was put on hold while the Supreme Court considered Dukes v. Wal-Mart.

The lawsuit against Costco features the same lawyers using similar theories, and some of the same experts.  Brad Seligman, a lead attorney for plaintiffs in both suits says that the Costco case is a much narrower case, covering just two types of managers who were affected by decisions made above the store level.  However, the Costco judge’s decision to certify an injunctive class under Fed. R. Civ. Proc. 23(b)(2) is similar to the initial decisions allowing the Wal-Mart class.  The Supreme Court in Dukes rejected that approach 9-0.

The case is Ellis v. Costco Wholesale Corp.  (COST), 04-03341, U.S. District Court, Northern District of California (San Francisco).