Dive Brief:
- Family Dollar Stores Inc. has agreed to pay $45 million to settle a long-running class action lawsuit brought by several female store managers alleging a pattern and practice of pay discrimination dating back to 2002.
- The case involves a nationwide class of 37,000 women, according to Reuters. In a 2008 court filing, the women alleged that the discount retail giant paid them less than men for the same job in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. A federal trial court judge signed off on the settlement at a fairness hearing March 14.
- According to the notice of class action settlement, the employer also agreed to perform a “systematic review” of its process for setting starting salaries for store managers in consultation with experts in the fields of labor economics and industrial/organizational psychology, and to make salary adjustments to the pay of female store managers “as it deems necessary and appropriate.”
Dive Insight:
The settlement amount is part of a trend in workplace litigation, according to Nancy Barnes, an attorney in Thompson Hine LLP's Cleveland office.
“While there was a decline in the value of such cases after the U.S. Supreme Court’s decision in Wal-Mart Stores v. Dukes in 2011, the plaintiffs’ bar has become more skilled at finding a way to avoid the impediments created by the Wal-Mart decision, which tightened the standards under Rule 23," Barnes said. "As a result, the largest settlements in these types of cases have been increasing exponentially over the past few years. The Family Dollar settlement simply continues this trend. With the focus on ‘Times Up’ and other movements related to equal pay for women, there is no reason to think that this trend will not continue."
Employers hoping to avoid Family Dollar's fate, especially in light of those recent movements, are beginning to undertake pay audits pay audits, ban salary history questions and more.