Wal-Mart is facing the biggest ever civil rights lawsuit brought against a private firm after a US federal judge allowed a sex discrimination case against the retailer to proceed as a class action.
The case covers about 1.6 million women, including current and former employees at Wal-Mart, which is the largest private employer in the US and world's biggest retail company.
Legal experts said the retailer could face a bill of hundreds of millions of dollars, even upwards of $1 billion, to settle the case.
The original legal action was filed in June 2001 by six women who alleged that the retailer had discriminated against women in pay and promotion, while retaliating against anyone who complained.
Wal-Mart has suffered damaging publicity about the way it treats workers. It is facing allegations that management bullied staff into overtime without pay and regularly breached child labor laws.
Federal prosecutors are investigating whether the firm knowingly used contractors which hire illegal immigrants after a series of raids last year.
Wal-Mart tried to prevent the certification in a hearing last September, arguing that its stores operated with so much autonomy that they acted like different businesses, with differing management styles.
In his ruling, Judge Martin Jenkins of US District Court in San Francisco said the class can seek punitive damages in the case, which alleges women were paid less and given fewer promotions than men.
He said the evidence presented was strong enough to infer "that Wal-Mart engages in discriminatory practices in compensation and promotion that affect all plaintiffs in a common manner".
The judge called the case "historic in nature, dwarfing other employment discrimination cases that came before" the court, and compared it to the Brown versus Board of Education case on school discrimination 50 years earlier.
"This anniversary serves as a reminder of the importance of the courts in addressing the denial of equal treatment under the law whenever and by whomever it occurs," Jenkins wrote.
Wal-Mart chief spokeswoman Mona Williams said the substance of the case has not even come to trial, but that the company would seek to reverse the decision on class-action status.
"Let's keep in mind that today's ruling has absolutely nothing to do with the merits of the case," Williams said.
"Judge Jenkins is simply saying he thinks it meets the legal requirements necessary to move forward as a class action. We strongly disagree with his decision and will seek an appeal."
But plaintiffs called the decision a landmark.
"Wal-Mart has been living in the America of 30 years ago, and those days are over," said Joseph Sellers, a lawyer for the plaintiffs.
"Certification of this class shows that no employer, not even the world's largest employer, is above the law. This decision sets the stage for women at Wal-Mart to get their fair share of pay and promotions which have been denied them for years," he said.
Sellers was among the first to file suit in June 2001 on behalf of a half-dozen women who claimed they were consistently held back from promotions and were paid less than their male counterparts.
The suit prompted an outpouring of claims from women throughout the US.
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