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Judges block class-action status in Costco gender bias lawsuit

The US Supreme Court's ruling earlier this summer in the Wal-Mart gender discrimination case was predicted by some to be a death knell for all similar class-action suits in the future. Experts predicted that the ruling would make it much more difficult to pursue class-action status in future employment lawsuits.

Earlier this month, that Wal-Mart ruling was cited in a decision to block class-action status in a very similar lawsuit alleging gender discrimination by current and former employees of Costco. However, the appellate court left open the possibility that it could soon regain class-action status.

The case involves about 600 women who work or have worked for Costco, which is the nation's largest warehouse club chain. Their 2004 lawsuit alleged that Costco made it more difficult for women to be promoted to managerial positions, partly by failing to post job openings.

The lawsuit gained class-action status in 2007, but had to be put on hold to await the ruling in the Wal-Mart case. Similar to the Wal-Mart case, there is a question of whether these individual claims have enough in common to justify class-action status.

California's 9th Circuit Court of Appeals ruled that class-action status in the Costco case should be blocked for the time being. However, the case was sent back to a lower court to "determine whether there was significant proof that Costco operated under a general policy of discrimination."

This means that class-action status could potentially be reinstated. Officials for Costco said they were pleased with the recent ruling. Interestingly, attorneys for the plaintiffs were also pleased, stating their certainty that a district court will reinstate class-action status.

A representative for the women said: "The district court had found that Costco had a common process for promotions, and statistical evidence that this adversely affected women - sufficient for certification. Costco did not get the outcome it wanted, a finding that we would be unable under any circumstances to get the class certified."

So it seems as though the Wal-Mart ruling is impacting employment lawsuits after all. In this case, however, the plaintiffs have not been stopped entirely, just delayed.

Source: Thomson Reuters Westlaw News, "No class action for now in Costco gender bias case," Jonathan Stempel and Moira Herbst, Sept. 16, 2011

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