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3.3. Walmart’s conflicts
Walmart has faced many obstacles over the years. It seems that legal and social challenges have acted as
important reasons for the development of its code of conduct and annual reporting. This statement can
be illustrated in two relevant cases: Walmart Stores Inc. v. Dukes et al.
75
and the press reports accusing
Walmart of using child labour.
3.3.1. Walmart Stores Inc. v. Dukes et al.
Walmart Stores Inc. v. Dukes et al. started a decade ago and is still being heard by the US Courts. It
commenced as a national class action against Walmart. Plaintiffs Betty Dukes, Patricia Surgeson, Edith
Arana (‘plaintiffs’), on behalf of themselves and others similarly situated, allege that female employees in
Walmart and Sam’s Club retail stores were discriminated against based on their gender. They stated that
they were discriminated against regarding pay and promotion to top management positions, thereby
violating the Civil Rights Act of 1964 (42 U.S.C. §§ 2000e et seq. of Title VII).
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In 2004, the US District
Court for the Northern District of California certified a national class of female employees challenging
retail store pay and management promotion policies and practices under the Federal Rule of Civil
Procedure Article 23(b)(2).
77
Walmart appealed to the Ninth Circuit in 2005, arguing that the seven lead
plaintiffs were not typical or common of the class.
78
Walmart appealed to the Supreme Court in August
2010 after the US Court of Appeals for the Ninth Circuit upheld class certification.
79
Finally, the situation
changed on 20 June 2011 when the US Supreme Court reversed the class certification.
80
The Court held that the nationwide class certification approved by the lower courts was not consistent
with the Federal Rule of Civil Procedure Article 23(a) governing class actions.
81
Justice Antonin Scalia
concluded that the millions of plaintiffs and their claims did not have enough in common:
82
‘Without
some glue holding the alleged reasons for all those decisions together, it will be impossible to say that
examination of all the class members’ claims for relief will produce a common answer to the crucial
question why I was disfavored.’
83
Dukes v. Walmart Stores, which in 2001 was estimated to comprise more than 1.5 million women,
included all women employed by Walmart nationwide at any time after 26 December 1998.
84
It would
have been the largest class action lawsuit in US history.
85
Despite the Supreme Court resolution, time, money and efforts invested up to this point, the case
did not end there. In October 2011, the plaintiffs’ lawyers filed an amended lawsuit limiting the class to
75 Walmart Stores Inc. v. Dukes et al. [2011], Case No. 10-277, SUPREME COURT OF THE UNITED STATES, Certeorari to the United States
Court of Appeals for the Ninth Circuit, p. 1.
76 Dukes v. Walmart Stores, [2001], Case No. C-01-2252-CRB, PLAINTIFFS’ FOURTH AMENDED COMPLAINT, Ninth Circuit, p. 2.
77 Ibid, p. 2
78 J.P. Putney, ‘Women launch new discrimination claim against Wal-Mart’, Jurist, 28 October 2011 <
http://jurist.org/paperchase/2011/10/
women-launch-new-discrimination-claim-against-Walmart-limited-to-california.php
> (last visited 3 December 2011).
79 Ibid.
80 ‘The high court, issuing new guidelines for class actions and Title VII employment discrimination cases, held that the national class could
not be certified, based on the facts it outlined in its opinion. The Supreme Court did not rule on the merits of the action, but only ruled
that the class as certified could not proceed. It did not preclude prosecution of a class that was consistent with its newly announced
guidelines and standards’. See Dukes v. Walmart Stores, supra note 76, p. 2.
81 F.A. Fahleson, ‘“When At First You Don’t Succeed…” New State Wide Class Action To Test Dukes Standards’, dritoday, 4 November 2011,
<
http://dritoday.org/post/e2809cWhen-At-First-You-Done28099t-Succeed-e2809d-New-Statewide-Class-Actions-to-Test-Dukes-Stand-
ard.aspx
> (last visited 21 March 2012).
82 Ibid.
83 Ibid.
84 See Walmart Stores Inc. v. Dukes et al., supra note 75.
85 A. Silverman, ‘Largest Discrimination Lawsuit in US History Gets Green Light: After years of delay, female Walmart workers may get their
day in Court’, Turner Strategies, 26 April 2010, p. 1. <
http://www.walmartclass.com/staticdata/Dukes%20v.%20Walmart%20-%20En%20
Banc%20Press%20Release.pdf
> (last visited 21 March 2011).
60
Four Case Studies on Corporate Social Responsibility
female Walmart employees in California.
86
This suit is expected to be the first of many additional class-
action lawsuits against the retailer at the state or regional level.
87
The new lawsuit, filed in the US District
Court for the Northern District of California, alleges discriminatory practices against more than 90,000
women regarding pay and job promotion as well as requiring non-discriminatory pay and promotion
criteria.
88
3.3.2. Walmart caught using child labour in Bangladesh
At the end of 2005, the Radio Canada programme Zone Libre made public the news that Walmart was
using child labour at two factories in Bangladesh.
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Children aged 10-14 years old were found to be
working in the factories for less than $50 a month making products of the Walmart brand for export to
Canada.
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Referring to Walmart’s policy at that time consisting of cutting ties with suppliers when violations
occurred, the NGO Maquila Solidarity Network said that ‘cutting and running is the worst possible
response to reports of child labour or other sweatshop abuses’.
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Critiques said that it only discourages
workers from telling the truth to factory auditors for fear of losing their jobs and encourages suppliers to
hide abuses or to subcontract work to other factories that will escape inspection.
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Nevertheless, Walmart ceased business with the two factories immediately.
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Walmart alleges that
despite its effort to inspect all factories, it is difficult to enforce its own corporate code of conduct with
thousands of subcontractors around the world.
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