New Wal-Mart Initiative Does Nothing to Address Harm Alleged in Dukes

Wal-Mart announced last Wednesday its plans to source a total of $20 billion dollars worth of products from women-owned businesses in the United States over the next five years. This initiative would nearly double its current spending levels on women-owned business from $2.5 billion to approximately $4 billion annually.

This ‘woman-friendly’ initiative comes just months after the Supreme Court’s June 2011 ruling in the nearly decade-long battle for class certification for nearly 1.5 million women currently and formerly employed by Wal-Mart. The women sought class-certification for claims that Wal-Mart’s corporate culture led to company-wide bias and discriminatory decisions over pay and advancement opportunities for female employees. However, in an opinion by Justice Scalia the Court decided 5-4 to reverse the 9th Circuit’s decision to grant certification, stating inter alia that the class lacked common questions of law or fact.

Lyle Denniston of the SCOTUS blog argues that this decision has two major implications: first, for the women bringing and affected by the suit. All the women wishing to recover must now bring individual suits against Wal-Mart, a highly improbable option given the low expected recovery in each case on its own. Second, Wal-Mart v. Dukes will make it substantially more difficult for groups of workers to band together against large, powerful employers: “the bigger the company, the more varied and decentralized its job practices, the less likely it will have to face a class-action claim,” Denniston writes.

The ripple effects of the decision were felt just one month later when a federal judge in California cited Wal-Mart v. Dukes is its decision to decertify a class in an action brought by Dollar Tree store workers against their employer. In the wake of the decision Wal-Mart has faced protests and renewed vows of support for the women employees by workers’, women’s and religious organizations.

While Wal-Mart maintains that the new women-friendly initiatives have no relation to the Dukes case, the announcement is suspiciously reminiscent of the company’s 2005 Sustainability Program that was adopted following massive assaults on its labor practices and environmental record.

Wal-Mart is acutely aware of the affect organizations like the women’s and labor groups have on public opinion. In 2009 The New York Times reported on a confidential memo prepared for the company around the time of their adoption of the Sustainability Program, five years prior, by McKinsey & Company. The report found that two to eight percent of Wal-Mart consumers surveyed had stopped shopping at the chain because of negative press. Wal-Mart executives and Wall Street analysts, The Times reports, began referring to the problem as “headline risk.” Incidentally, more than half of Wal-Mart’s 200 million customers are female, creating a great potential loss to “headline risk” associated with this summer’s ruling.

Motives aside, steps taken by Wal-Mart as the nation’s largest company can result in major change. Their massive size and thus massive influence over the industry was put to use earlier this year when the company teamed up with First Lady Michelle Obama, pledging to reduce sodium and sugar and eliminate trans fats in its packaged food products. Given its market share, this feat was easily implemented by the massive chain. Humanitarian group CARE USA, which began working with Wal-Mart in 2009 on a project with Bangladeshi and Indian workers, notes that such collaborations are appealing specifically because of Wal-Mart’s role as an industry leader. Their actions not only have their own enormous impact, but the potential to “shape what others do in the field.”

While the initiative presents potential for positive change, it also diverts attention from the issues presented by the plaintiffs of Dukes, who are now in a more vulnerable position than when they filed their suit ten years ago. Janet Shenk, former AFL-CIO official now with the Panta Rhea Foundation, points out that “[i]t’s not about who owns the factory…there’s no evidence that factories and businesses owned by women treat their employees better or have better concern than factories and businesses owned by men.” Additional vows to support the training of women in factories and farms that serve as Wal-Mart’s suppliers, to donate $100 million to causes supporting women’s economic development and to ask vendors and services to increase gender and minority representation on their Wal-Mart accounts redirect focus from Wal-Mart’s own domain of regulation of labor conditions to those of suppliers, charities, and vendors.

In other words, Wal-Mart’s “women-friendly” initiative does nothing to address the concerns presented by Dukes and the other 1.5 million “women of Wal-Mart.” The issue presented in Dukes did not involve the number of women entrepreneurs profiting off business relationships with Wal-Mart or the misdeeds of suppliers, but rather concerned the manner in which the company’s own employees were compensated and respected as valued members of the corporation. While this strategy indicates that Wal-Mart certainly anticipated the “headline risk” associated with Dukes, this tried and true public relations tactic cannot erase decades of corporate-wide discriminatory practices toward women.

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