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Warehouse Retailers Face Bias Suits

Sep 20, 2004 | DENVER POST

Three of the nation's largest warehouse retailers Wal-Mart, Home Depot and Costco Wholesale Corp. have much in common: In opening hundreds of new stores, they've hired tens of thousands of hourly employees, many of whom have become managers.

In the past year, the three big box chains also have faced claims of discrimination. Some hourly employees allege they were routinely passed over for promotions due to sex and race discrimination.

Home Depot was the first to resolve one of these lawsuits. On Aug. 25, it agreed to pay $5.5 million to settle a discrimination and retaliation charge brought by the U.S. Equal Employment Opportunity Commission on behalf of dozens of Colorado employees.

In the past five years, Wal-Mart has added more than 500 new stores and Costco has added 133 new stores. Home Depot expects to open 175 stores this year.

In reporting on these cases over the past three months, The Denver Post has received more than two dozen phone calls and e-mails from employees wanting to know how to join these lawsuits.

In the Home Depot suit, plaintiffs alleged that several stores in Colorado created hostile work environments where employees were discriminated against on the basis of sex, race and national origin and retaliated against if they complained.

Atlanta-based Home Depot did not admit any wrongdoing as part of the settlement, but agreed to train non-supervisory employees, managers and human resource employees in anti-discrimination laws.

Shirley Ellis of Arvada, Colo., sued Costco in August, alleging the firm discriminates against women. The suit claims Costco has denied hundreds of women advancement to high-paying management jobs. Attorneys for Ellis are seeking class-action status.

Costco, based in Issaquah, Wash., has denied the allegations.

Mark Stalwick, director of personnel for Costco, said the company has had a management-training program in place for more than 20 years.

"We focus on harassment, discrimination, the Family and Medical Leave Act all the things that hourly employees just don't have a clue about but need to understand right when they first get into a management position," he explained.

All new Costco managers are required to attend Costco University Leadership Development 101, an eight-week, 32-hour in-house program taught by senior managers. "It takes them basically through what it takes to be a good leader and how to take care of their employees," said Stalwick.

But since the course is only offered once a year, Stalwick said the company requires all new managers within 30 days of their promotion to sign a document stating that they've read Costco's ethics policy, and they must complete a two-hour online supervisor-orientation course.

Wal-Mart is the world's largest retailer and creates an average of 230 new jobs per day in the United States.

It now finds itself in the hot seat, facing a class-action discrimination lawsuit potentially representing 1.6 million past and current female workers.

The lawsuit claims Wal-Mart often pays female workers less than their male counterparts for comparable jobs and bypasses women for promotions.

Wal-Mart, based in Bentonville, Ark., is fighting the lawsuit. But the company also has made changes to its employment practices. It put in place a new pay structure for hourly workers and next month will launch a "career preference system," enabling employees to indicate if they're interested in specific management jobs.

In the past year, Wal-Mart has created an office of diversity to oversee hiring and promotions.

"Our goal is to make sure that the percentage of qualified minorities and women we promote is equal to the percentage who apply," chief executive Lee Scott said in June. He said the company met that goal in 2003.

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