Houle v. Walmart Inc.

• Decision Date: 20 March 2020
• Docket Number: 3:19-CV-514
• Citation: 447 F.Supp.3d 261
• Parties: Brenda HOULE, Kelly Reese, and Susan Sterner, Plaintiffs, v. WALMART INC. formerly Wal-Mart Stores, Inc., Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

447 F.Supp.3d 261

Brenda HOULE, Kelly Reese, and Susan Sterner, Plaintiffs,

v.WALMART INC. formerly Wal-Mart Stores, Inc., Defendants.

3:19-CV-514

United States District Court, M.D. Pennsylvania.

Filed March 20, 2020

Gregory G. Paul, Morgan & Paul, PLLC, Pittsburgh, PA, for Plaintiffs.

Allison R. Brown, Littler Mendelson, PC, Pittsburgh, PA, Constance H. Weber, Littler Mendelson, PC, Charleston, WV, Scott A. Forman, Littler Mendelson, PC, Miami, FL, for Defendants.

MEMORANDUM OPINION

Robert D. Mariani, United States District Court Judge

I. INTRODUCTION AND PROCEDURAL HISTORY

On Jun 19, 2001, Betty Dukes filed a putative class action complaint against Defendant Wal-Mart Inc. ("Walmart") in the Northern District of California on behalf of herself and approximately 1.5 million current or former female Walmart employees across the country. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 366, 131 S. Ct. 2541, 2561, 180 L. Ed. 2d 374 (2011). The District Court and the Court of Appeals approved the class's certification. Dukes, 564 U.S. at 342, 131 S. Ct. 2541. On June 20, 2011, the Supreme Court reversed the class certification order. Dukes, 564 U.S. at 359, 131 S. Ct. 2541.

The Northern District of California tolled the claims of the former class members as follows: members who possessed an Equal Employment Opportunity Commission ("EEOC") notice to sue had until October 28, 2011 to file; members in non-deferral states who had never filed an EEOC charge had until January 27, 2012 to file charges with the EEOC; and members in deferral states had until May 25, 2012 to file charges with the EEOC. (Doc. 22, at ¶ 7-8; see also Doc. 22-1, Ex. A).

On May 2, 2012, Plaintiff Brenda Houle filed an EEOC charge. (Doc. 22, at ¶ 10). On May 21, 2012 Plaintiff Kelly Reese filed an EEOC charge. (Id. at ¶ 11). On April 30, 2012, Plaintiff Susan Sterner filed an EEOC charge. (Id. at ¶ 12). On March 19, 2019 each Plaintiff received a right to sue letter from the EEOC. (Id. at ¶¶ 10-12).

On June 11, 2019, Plaintiffs Brenda Houle, Kelly Reese and Susan Sterner filed an Amended Complaint against Defendant Walmart, alleging Walmart "illegally discriminated against them on the basis of their gender by paying them less than similarly-qualified or less-qualified male employees and by promoting them less quickly and less frequently than similarly-qualified or less-qualified male employees." (Id. at ¶ 1). Count I of the Amended Complaint alleges the Defendant's disparate treatment of women violates Title VII of the Civil Rights Act of 1964. (Id. at 20). Count II of the Amended Complaint alleges the Defendant's neutral policies have a disparate impact on women in violation of Title VII of the Civil Rights Act. (Id. at 21).

Plaintiffs are seeking monetary damages "including back pay, front pay, compensatory damages, and general and special damages for lost compensation and jobs benefits that they would have received but for the discriminatory practices of Walmart" (Id. at ¶ 128); "exemplary and punitive damages in an amount commensurate with Walmart's ability to pay and to deter future conduct" (Id. at ¶ 129); declaratory relief (Id. at ¶ 130); costs, including reasonable attorneys' fees (Id. at ¶ 131); and pre- and post-judgment interest (Id. at ¶ 132).

On June 25, 2019, Defendant filed a Partial Motion to Dismiss Plaintiffs' Amended Complaint. (Doc. 27). While this Motion was pending, Plaintiff Brenda Houle reached a settlement with Defendant. (Doc. 40, at ¶ 4). All claims related to Houle are moot and will not be addressed. The Partial Motion to Dismiss is now before the Court. The issues have been fully briefed and Defendant's Motion is ripe for disposition. For the reasons set forth below, the Court will grant in part and deny in part Defendant's Partial Motion to Dismiss.

II. FACTUAL ALLEGATIONS

Plaintiffs' Amended Complaint (Doc. 22) alleges the following facts which, for the purposes of resolving Defendant's Partial Motion to Dismiss (Doc. 27), the Court takes as true:

Plaintiff Kelly Reese is a female resident of Cressona, Pennsylvania who was employed by Walmart Store #2535 in St. Clair, Pennsylvania from 2000 to 2004. (Doc. 22, at ¶ 16). Plaintiff Susan Sterner is a female resident of Pottsville, Pennsylvania who was also employed by Walmart Store #2535 in St. Clair, Pennsylvania from 2001 to the present. (Id. at 17). Defendant Walmart is a Delaware corporation headquartered in Bentonville, Arkansas with retail stores located throughout Pennsylvania. (Id. at ¶ 18).

Plaintiffs assert they exhausted their administrative remedies and complied with statutory prerequisites of Title VII by "timely [filing] charges of discrimination with the EEOC pursuant to the deadline set by the United States District Court for the North District of California's August 19, 2011 Order." (Id. at ¶¶ 9, 13).

The time period relevant to this action is based on the limitations period from Dukes: "The limitations period starts on December 26, 1998, which is 300 days before the earliest charge filed with the EEOC by a former member of the Dukes class, and runs through the date of trial." (Id. at ¶ 14). During this time period, Walmart divided its retail operations into "six Walmart divisions, each consisting of approximately six regions." (Id. at ¶ 19). Plaintiffs were employed in Region 5. (Id. ). Every store in this region had "the same job categories, job descriptions and management hierarchy." (Id. at ¶ 20).

The hierarchy was arranged as follows (from bottom to top): entry-level hourly Cashier, Sales Associate and Stocker; hourly Department Manager and Support Manager; the manager training program "MIT" participants; salaried Assistant Managers; Co-Manager; Store Manager; District Manager; and finally, Regional Vice President ("RVP"). (Id. at ¶¶ 20-24). Additionally, Region 5 had one Regional Personnel Manager ("RPM"). (Id. at ¶ 25).

In the relevant time period, Walmart has had three relevant pay policies: the 1998-2004 Hourly Pay Structure, the 2004 Pay Restructuring and the 2006 Pay Cap. (Id. at 6-9).

From 1998 until June 2004, Walmart assigned jobs to five classes, regardless of department. (Id. at ¶ 27). "Each successive job class had a higher minimum starting pay rate." (Id. ). The starting pay rate for each class was set by the Store Manager within pay guidelines and subject to constraints and approval by District Managers and the RVP. (Id. at ¶¶ 28-29). A Store Manager had the discretion to create an "exception" and pay an employee above or below established pay guidelines. (Id. at ¶ 29).

Store Managers "were not required to use job-related criteria, such as job performance or experience, in setting, adjusting, or approving compensation." (Id. at ¶ 34). Store Managers were not told "the weight to be accorded any particular requirement" and they were not required to document the reasons for any pay decisions. (Id. ). District Managers and the RVP "did not hold the Store Managers ... accountable," or ensure the reasons for decisions comported with the law. (Id. ). "Women who held hourly positions ... have been regularly paid less than similarly-situated men, although, on average, those women have more seniority and higher performance ratings than their male counterparts ... even when nondiscriminatory objective factors, such as seniority, performance, store location, and other factors are taken into account." (Id. at ¶ 35).

After the 2004 Pay Restructuring, Walmart assigned jobs which had all previously been in one pay class to separate classes depending on department. (Id. at ¶ 39). Hourly pay rates, therefore, differed by department. (Id. ). "[J]obs in departments in which women were over-represented were assigned to lower jobs classes, while those same job titles in departments over-represented by men were assigned to higher job classes," and therefore higher pay. (Id. at ¶ 40).

In 2006, Walmart changed its pay policy to add "a cap on the pay permitted for each job class." (Id. at 41). Lower job classes were subject to lower pay caps, "further impacting the pay of women relegated to the lower job classes." (Id. ).

There are four relevant policies regarding promotions: the lack of formal job postings for certain positions, travel and relocation requirements for certain positions, the promotional system instituted in 2007, and the lack of job-related criteria for promotions. (Id. at 9-14).

Support managers are "the highest level hourly supervisor positions." (Id. at ¶ 42). Walmart does not post openings for this position, nor does it have a "formal application process" or "job-related criteria" for promotion to support manager. (Id. ).

The MIT Program is a prerequisite for salaried management positions; but, before 2003, there was no application process or job postings for the program. (Id. at ¶ 43). "Hourly employees were not provided any information regarding how to enter management, or what the requirements or qualifications were for entering management, or how to apply for the MIT Program." (Id. ).

From January 2003 through 2006, Walmart used a "posting system for entry into the MIT Program," wherein positions were posted "for one week, a few times per year." (Id. at 44). Candidates had to agree to travel and relocation conditions. These requirements were "more likely to discourage women than men," and were not "a fair representation of the actual job requirements." (Id. ).

In 2007, Walmart instituted a new system for all promotions, which "permitted employees to register in advance for the positions and geographic areas in which they were interested." (Id. at ¶ 46). The system "automatically applied the minimum qualifications ... and presented the hiring manager with a set of candidates." (Id. ). Though, it was "common" for managers to engage in "pre-selection," a process in which managers post a position to see which candidates are presented and close the position without selecting a candidate "because the manager's pre-chosen candidate was not included in the...