Wal-Mart Lawsuit Appeal Could Worsen Image: Analyst

NEW YORK -- Drawn-out legal procedures in the gender discrimination lawsuit against Wal-Mart Stores will only exacerbate the company's public-image issues, Adrianne Shapira, an analyst with Goldman Sachs here, said in a published note last week. She also said a settlement of the case "becomes more likely" once a re-hearing of a lower court decision by an expanded panel of judges from the Ninth Circuit Court of Appeals in San Francisco has taken place. The suit, filed in 2001 by six female employees of the Bentonville, Ark.-based company, claims Wal-Mart discriminates against female employees in pay, promotions, training and job assignments -- claims to which a lower court assigned class-action status in mid-2004 in a decision upheld earlier this month by a three-judge panel on the Court of Appeals. The class could potentially include more than 1.6 million current and former females employed by the company, who could, if they win the case, be entitled to aggregate back pay of between $1.5 billion and $3.5 billion and punitive damages of nine times that amount, or between $13.5 billion and $31.5 billion, Shapira pointed out. Wal-Mart said earlier this month it plans to ask a larger panel of judges on the Ninth Circuit Court of Appeals to hear the case, in hopes of disallowing the class certification by the three-judge panel. Shapira said the legal process could take between 28 weeks and 41 weeks just to get to trial, barring a possible settlement. -- Elliot Zwiebach