Attorneys for the plaintiffs in the long-running suit filed a motion asking the court to grant preliminary approval to the deal, saying it provides classwide programmatic relief addressing the alleged practices at issue in the case, as well as establishing an expedited claims procedure for the class members to tap into the $8 million settlement fund to resolve their individual claims.
The motion notes that Costco continues to deny that it has discriminated against female warehouse employees through its promotion policies and practices and states that any additional recovery that could be obtained through continued litigation “is far outweighed by the risk, delay, and expense associated with a stage one pattern-or-practice trial.”
The litigation dates back to 2004, when plaintiff Shirley “Rae” Ellis first filed suit claiming that Costco discriminates against female warehouse employees by using a uniform, corporate-directed system that fails to promote equally or better qualified women into the positions of assistant general manager and general manager.
And the nearly decadelong litigation has had its fair share of twists and turns.
The court certified a class of female employees in the case in January 2007, but the Ninth Circuit later vacated that certification, ordering the court to reconsider in light of the U.S. Supreme Court's decision in Wal-Mart v. Dukes.
On remand, U.S. District Judge Edward M. Chen granted hybrid certification for an injunctive relief class and a monetary relief class in September 2012, finding that the suit focused its claims on the company’s promotion policies to only the general manager and assistant general manager positions, in contrast to the Dukes case in which the Supreme Court found that the plaintiffs hadn't identified a uniform discriminatory company policy to support sweeping claims that they had faced bias in pay and promotion decisions.
The settlement makes changes to the policies challenged in the case.
These changes include: the use of an industrial organizational psychologist to conduct job analyses, evaluate promotion processes, and develop selection criteria and tools for assistant general manager and general manager promotions; a posting process for assistant general manager promotions; a registration of interest system for general manager promotions; a merchandising training class for senior staff managers; a promotion process for assistant general manager positions, including comprehensive records maintenance; and internal training and communication concerning the newly implemented programs.
The deal also calls for Costco to shell out $8 million to a settlement fund.
The fund will be used to pay out claims made by class members who prevail under the claims process laid out in the settlement and will also cover settlement administration costs and any service payments awarded by the court to the named plaintiffs in the case.
Under the claims process, each claimant may challenge up to three promotions, depending on their length of tenure at Costco.
Funds not used to pay class members will be used to pay the industrial organizational psychologist and donated to educational programs addressing the advancement of women to leadership roles in retail management.
In a separate motion, attorneys for the class asked the court to award them $4.3 million in attorneys' fees for work on the case through November 2013, nearly 634,000 in costs, and $300,000 for administering the settlement and fees for work done on the fee motion itself in an amount to be provided later. These funds will not come out of the $8 million, according to court papers.
An attorney for the plaintiffs said the parties had agreed not to comment on the settlement.
The plaintiffs are represented by Jocelyn D. Larkin and Robert Schug of The Impact Fund, Bill Lann Lee and Lindsay Nako of Lewis Feinberg Lee Renaker & Jackson PC, Kelly M. Dermody and Daniel M. Hutchinson of Leiff Cabraser Heimann & Bernstein LLP, Steve Stemerman and Elizabeth A. Lawrence of Davis Cowell & Bowe LLP, and James M. Finberg of Altshuler & Berzon LLP.
Costco is represented by Lorie Almon, Kenwood Youmans, David Kadue, David Ross, Gerald Maatman, Annette Tyman and Thomas Wybenga of Seyfarth Shaw LLP.
The case is Ellis v. Costco Wholesale Corporation, case number 3:04-cv-03341, in the U.S. District Court for the Northern District of California.
--Additional reporting by Sindhu Sundar. Editing by John Quinn.