Wal-Mart to settle suit by black truck drivers with $17.5 million deal

By Linda Satter –Arkansas Democrat Gazette

LITTLE ROCK — Wal-Mart has agreed to change its recruitment and hiring methods for over-the-road truck drivers, and pay $17.5 million to thousands of blacks who say they were denied the jobs because of their race, resolving a nationwide class-action lawsuit that was set for trial next month.

On Friday, attorneys for the Bentonville-based chain and the drivers jointly filed a proposed settlement agreement in federal court in Helena-West Helena.

The 54-page agreement, which states that it “is in no way an admission by Wal-Mart” of the allegations, must be approved by U.S. District Judge Bill Wilson Jr. before becoming official.

Wilson has been asked to first sign a preliminary approval of the settlement, which would give the parties the go ahead to send notices to two groups of class members. The first group includes all black applicants who, records show, were rejected for driving jobs since Sept. 22, 2001. The second group, whose members will be sought through targeted advertisements, are those who were deterred from applying because of their race.

Interested members of both groups must return a claim form to be considered part of the class that will ultimately divide the money.

After a sufficient time has been allowed for all potential plaintiffs to be identified, and a period has lapsed in which anyone may object to the proposal, Wilson will conduct a fairness hearing before deciding whether to give his final seal of approval. Attorneys have asked him to schedule the hearing for June 30.

The case began in 2004, with a civil-rights lawsuit filed against Wal-Mart Stores Inc. and Wal-Mart Transportation LLC, by Daryal T. Nelson of Coldwater, Miss., that was later consolidated with a suit filed in 2005 by Tommy Armstrong, a former Wal-Mart Distribution Center employee from Woodruff County.

The men, both of whom applied for truck-driving positions and were turned down, alleged that black would-be drivers were being routinely denied jobs, or in many cases even the opportunity to apply, because of the company’s word-of-mouth recruitment policies and its related closed-off hiring procedures. They sought back pay, an injunction on discriminatory practices and other monetary damages.

Wilson granted nationwide class-action status, with some restrictions on damages, in May2007.

“Resolving this litigation is in the best interest of our company, our shareholders and our associates,” Daphne Moore, a spokesman for Wal-Mart Stores Inc., said in a news release Friday.

“Encouraging diversity is an important part of the hiring process for all areas of our company,” Moore said. “We are implementing improvements to our transportation division’s recruitment, selection and personnel systems and believe they will be an integral part of our commitment to diversity.”

There are about 8,000 drivers in the company fleet.

In the same news release, Little Rock attorney Hank Bates, the lead attorney for the plaintiffs, called the proposal “an excellent result for the class both in terms of the monetary relief and in terms of Wal-Mart’s commitments to job placements, equal opportunity and enhanced recruitment efforts moving forward.”

Bates represents the plaintiffs, along with John W. Walker of Little Rock and Morgan “Chip” Welch of North Little Rock.

Aside from agreeing to divide $17.5 million among a group of people that’s estimated to number less than 10,000, Wal-Mart has agreed to provide priority job placements to 23 class members who submit approved claim forms; provide direct notice of all future job opportunities to all interested class members; establish benchmark hiring goals so that the composition of future hires is proportionate to the racial composition of the applicants; select a diversity recruiter and enhance recruitment efforts and advertising targeted to blacks.

Sections of the agreement spell out detailed procedures to be enacted for training, recruiting, advertising of available jobs, record-keeping and accountability.

In granting class-action status, Wilson found that the “uniform hiring culture” that Wal-Mart fosters ensures that potential drivers are recruited almost exclusively by word of mouth from current drivers and then are screened further by committees at the company’s 47 transportation offices that aren’t racially diverse and don’t use objective selection criteria.

Wilson noted, “Numerous courts recognize that word-of-mouth recruiting may be a discriminatory practice.”

Wal-Mart still faces a lawsuit that could become the nation’s largest class-action sex-discrimination case, which alleges that the company paid women less than men for the same jobs and did not give women the same opportunities for promotion as men.

The U.S. Court of Appeals for the 9th Circuit ruled Feb. 13 that a larger panel of judges will reconsider the class-action status previously certified by a federal judge and upheld by a three-judge panel.

This article was published Saturday, February 21, 2009.
Business, Pages 29, 34 on 02/21/2009