Business lawsuit case study: Tennessee company risk management analysis

Gender discrimination is a business pitfall that could result in hazardous, time-consuming, and expensive lawsuits. Today, businesses and managers need to be fully aware of the legal implications of perceived differences between how employees are treated. For this reason, specific safeguards can be implemented to prevent the hazards associated with gender discrimination lawsuits. In the event that a suit has already been filed, businesses can also enter into alternative settlement negotiations, which would avoid the public, and potentially scandalous, nature of a court settlement. One example of such a case is the class action suit brought by three women in Tennessee against Wal-Mart, citing continuous and consistent gender discrimination. Without recourse to alternative settlement choices and reform efforts, the danger for Wal-Mart is a tarnished reputation as unequal employer and significant losses in terms of time and money.

The lawsuit was brought in Nashville, Tennessee, with the charge that Wal-Mart Stores, Inc. discriminated against female employees in its region of stores that center in Tennessee (Business Wire). Specifically, the complaint was filed as Phipps et al. v. Wal-Mart Stores, Inc. In the U.S. District Court for the Middle District of Tennessee. The purpose of the suit was to encourage the business to end its discriminatory practices, especially with regard to salaries and promotions. Interestingly, the case was the third regional case of its kind against the retailer, implying that the store's managers have been engaging in actions resulting in multiple similar lawsuits. Specifically, the suit in Tennessee was filed by Cheryl Phipps, Bobbi Millner, and Shawn Gibbons. All three women have been employees at the company for 11 of more years. The plaintiffs claimed that women at the company have been subject to denial of equal pay and promotion opportunities. Many have waited for more than a decade for their complaints to reach the courtroom.

Actions that have led to the case include significantly lower salaries for women who hold salaried and hourly positions at the stores in the region than their male counterparts. On average, the women have proven to have more seniority and higher performance ratings than their higher earning male counterparts. Furthermore, the regional and district senior management panel have been receiving regular reports concerning the generally lower compensation for female employees and have chosen to ignore these. Cheryl Phipps, for example, have had long retail experience but has nonetheless denied entry into the Management Trainee Program at Wal-Mart. The district manager has falsely claimed that she was not good enough for the management position, while a less competent male coworker was entered into the program. The other plaintiffs have had similar experiences at their workplaces within the region.

There are basically two actions the company could have taken to prevent the lawsuit. First, and most importantly, the company should have been aware of and adhered to the federal laws preventing discrimination on any grounds. Indeed, the lawsuits brought against the company in the past should have alerted the company that its risk mitigating actions were not sufficiently in place. These laws are available to both the public and businesses within the public domain. There is therefore no reason why the company could not have accessed widely available websites such as the one created by the U.S. Equal Employment Opportunity Commission (2009) in order to ensure that these laws were respected within the company. Not doing so is illegal and can have implications for the continued existence of the company or at least for its financial and social standing. Another action the company could have taken was to take seriously complaints regarding gender discrimination lodged against the company and its managers. Handling these concerns internally would have created not only a more equal workplace, but also a less public display of the company's lack of equal opportunities and by association its reputation.

In terms of ethics, it is not only illegal, it is also a discriminatory practice that is prohibited by the Constitution of the country. Indeed, as human beings, every citizen in the country has the right not only to work, but also to work that offers equal opportunities and salaries for persons with similar abilities, skills, and experience, regardless of distinguishing factors such as gender, ethnicity, race, or any other factor that does not influence the skill of the employee. Hence, it is highly unethical for any employer, especially today when these practices are highly condemned, to discriminate on these grounds.

There are many resources Wal-Mart could consult to prevent similar lawsuits in the future. Indeed, it might be recommended that the company take this more seriously in the light of previous discrimination cases of the same nature. One source, as already mentioned, is the U.S. Equal Employment Opportunity Commission site containing various laws that relate to discrimination. Another is published documents, also available online, to provide further and more detailed information about adhering to these laws. One such publication has been copyrighted by Legal Momentum (2005) and is available as a PDF file on the Internet. Third, the company might also consult with a number of legal representatives who can give managers advice and information about creating a more employee friendly environment in terms of discrimination or its eradication. Finally, the company can also consult court published documents relating to discrimination cases in order to ensure that it does not succumb to any pitfalls that might not have been noticed. Every employee, regardless of gender or other distinguishing factor, has the right to a friendly and wholesome workplace. In an environment where women feel their only recourse is legal representation, no wholesome environment can be assumed. Wal-Mart should therefore indeed take its responsibility as employer seriously rather than claiming to be an equal opportunity employer when the facts so clearly indicate otherwise.