Wal-Mart Settlement in First LGBT Workers' Class Action Reflects Larger Shift
Wal-Mart Stores Inc.’s multimillion-dollar agreement this week to compensate employees who were refused benefits for same-sex partners marks one of the first class action settlements brought on behalf of LGBT workers, and it comes at a time when the legal and corporate landscapes are moving toward embracing equal protections.
A Boston federal judge approved the settlement on Tuesday to end a lawsuit that accused the retail giant of discriminating against gay and lesbian employees in denying health insurance benefits to same-sex spouses. Under the deal, Wal-Mart will set aside $7.5 million to compensate employees affected by the denial three years before it changed its policy. It also covers legal fees and expenses.
This decision could represent the latest in a rapid shift toward LGBT protections in the workplace, a move spurred not only by the interest of companies that feel social pressure but also by the courts, where a company’s failure to offer equal protections could become a liability.
“This class action settlement breaks new ground,” the attorneys for the plaintiffs said in court documents. “This is the first class action brought on behalf of LGBTQ workers to be certified and settled, and hopefully the settlement of this action will inspire other LGBTQ workers to employ the class action device to secure equal rights in the future.”
Suzanne Goldberg, a Columbia Law School professor who leads the school’s Center for Gender and Sexuality Law, agreed that this was the first such case and said as corporate norms are changing, the courts are moving side by side to say sexual orientation discrimination cannot be permitted.
“The decision to settle reflects a recognition that it is no longer acceptable for major employers to discriminate against their lesbian and gay employees,” Goldberg said. “It recognizes that discrimination is bad for business in many respects. It hurts recruitment and retention and can hurt company in its sales and marketing efforts.”
The case—Cote v. Wal-Mart Stores—was filed before Wal-Mart voluntarily made health insurance benefits available to same-sex spouses in 2014. As part of the settlement, Wal-Mart committed to continuing to do so in the future. The settlement will affect several thousand current and former associates who did not receive benefits between 2011 and 2013.
Attorneys for the chain did not respond to request for comment about broader implications of the settlement.
Peter Romer-Friedman, an Outten & Golden attorney in Washington who represented Cote, declined to comment on the settlement. When asked broadly about the issues the lawsuit raised, he said that most large companies are now giving equal health and pension benefits to employees who have same-sex spouses.
“There certainly are companies out there that discriminate against same-sex couples in the provision of benefits, but most employers have taken the step of ensuring that they have equal benefits,” Romer-Friedman said. He noted guidance from the U.S. Labor Department in 2013 that required Employee Retirement Income Security Act plans to extend benefits to same-sex couples.
“As a result, most big companies that have sophisticated counsel are following that guidance,” Romer-Friedman added. He also noted federal courts are increasingly recognizing that LGBT workers are protected under Title VII of the Civil Rights Act, which prohibits employment discrimination based on sex.
A recent federal appeals court ruling in the U.S. Court of Appeals in the Seventh Circuit in Chicago said that discrimination against employees on the basis of sexual orientation violates the Civil Rights Act. It was hailed a landmark decision by gay rights advocates. Other federal appeals courts, including the Eleventh District, have ruled that the Civil Rights Act does not include protections for gay or bisexual employees.
Yet, some observers say that public pressure has already pushed many major companies toward equality for gay and lesbian workers.
The Human Rights Campaign, which provides an equality index to examine whether employers protect LGBT workers, shows in its annual reports that most Fortune 100 companies adopted policies to provide equal protections for gay and lesbian workers.
Source: Law Journal