Wal-Mart's Gender Gap

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The company denies that it mistreats workers and plans to appeal the class-action ruling on the sex-discrimination suit. "The company does not condone discrimination of any kind," says spokeswoman Sarah Clark, adding that female employees are fairly promoted and paid. Some Wal-Mart employees agree. Says Brenda Dobbins, 50, an hourly worker in Wilson: "I've had all sorts of opportunities here, and I've always been treated fairly." Yet changes to some of its employment practices suggest that Wal-Mart is responding to the criticism. In June the company adjusted pay for many jobs; later this year its electronic job-posting system will notify workers of desirable openings. It created a department to promote diversity. CEO H. Lee Scott Jr. has warned that executives will see their bonuses reduced if they fail to meet diversity goals.

Even a whopping settlement is unlikely to hobble Wal-Mart, which rang up $9 billion in profits for the latest fiscal year. Nonetheless, its bottom line is likely to be redrawn by the suits. The sex-discrimination case alone could result in a multibillion-dollar settlement, says plaintiffs' attorney Joseph Sellers. Wal-Mart's reputation as a harsh employer, along with concerns about unfair competition, has spurred communities in Chicago, Dallas and Inglewood, Calif., to block construction of new stores. The outcome of the cases, thanks to the retailer's prominence, could affect how companies all over the world treat their workers. "The point is that more people are aware," says ex-employee Adams, who now works to unionize Wal-Mart stores. "They're finally seeing what's behind that smiley face." And these days, it's not a lot of smiles.