Profile of the Costco Gender Discrimination Class Action Lawsuit

Introduction: The Suit Against Costco

On August 17, 2004, The Impact Fund and the law firms Lieff Cabraser Heimann & Bernstein, LLP and Davis, Cowell & Bowe filed an employment discrimination class action lawsuit against Costco Wholesale Corporation. The suit charges that Costco operates a "glass ceiling" at the store-management level which stops women from getting promoted to assistant manager and general manager positions.

The class action, entitled Ellis v. Costco Wholesale Corporation, was brought by a current (now former) female Costco assistant manager on behalf of herself and all current and former female Costco employees across America who have been subjected to gender discrimination in promotion to store management positions. The suit was filed in federal court in San Francisco. Since its filing, two additional plaintiffs have been added to the suit. The first was added on October 29, 2004. She is a former Costco Receiving Manager. Another Plaintiff was added to the suit on March 23, 2005. She is a current Costco Assistant Manager.

On August, 28, 2006, Plaintiffs filed a motion for class certification asking the court to send the case to trial on behalf of more than 750 current and former Costco employees.

On January 11, 2007, Judge Marilyn H. Patel certified the class finding that the three current and former Costco employees may represent all women employed by Costco in the United States denied promotion to assistant and/or general manager positions since January 3, 2002.

Costco appealed that decision to the United States Court of Appeals for the Ninth Circuit. The parties appeared for a hearing in April 2008 before a three-judge panel. After hearing the Plaintiffs' and Costco's respective arguments, the judges decided to put Costco's appeal on hold until Wal-Mart's appeal in the Wal-Mart gender discrimination class action is concluded. We do not expect a decision until some time in 2010 at the earliest.

What the Suit Claims

The suit claims that senior management of Costco is virtually all male. Nationwide, less than 16 percent of General Managers are female. Promotions into Assistant Manager and General Manager positions are not based on any stated qualifications or criteria; openings for those positions are not even posted. Nor is there any application procedure for such positions. Instead, such promotions are based on a "tap on the shoulder," a tap almost always made by a man.

The suit specifically claims that Costco has pursued policies and practices on a continuing basis which result in the denial of equal job opportunities to qualified women. Such policies and practices include:

• Relying upon subjective, gender-based and/or arbitrary criteria utilized by a nearly all male managerial workers in making promotion and compensation decisions;
• Failing to follow a uniform job posting procedure to guarantee that all employees have notice of openings;
• Discouraging females from applying for senior level management positions;
• Failing and refusing to consider females for promotion on the same basis as males are considered;
• Failing and refusing to promote females on the same basis as males are promoted and compensated;
• Failing to provide females with accurate and timely notice of promotional opportunities; and
• Maintaining and fostering a reputation for discriminatory conduct which deters females from pursuing promotion opportunities with Costco.

As a consequence of Costco's discriminatory policies, women are promoted to assistant manager positions at a much lower rate they should be based upon their presence in the lower positions from which promotions are drawn. This in turn has the effect of reducing the number of eligible women for promotion to general manager positions, since promotions to such positions are usually drawn from the assistant manager ranks.

The suit asks the court to order Costco to stop its discriminatory practices, and to pay damages to women denied promotions, including lost pay and benefits, and damages for emotional distress, and punitive damages.

Contact An Attorney

Our legal team is interested in learning of experiences of female workers at Costco warehouses across the nation. Please click here to contact an attorney on the Costco gender discrimination case or you may call us toll free at 1-866-501-2300.

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