Court moves ahead on Costco class-action lawsuit after three-year hiatus

A class-action lawsuit against Costco Wholesale is moving forward in the wake of a U.S. Supreme Court decision that favored Wal-Mart in a similar case. On Thursday, the U.S. Court of Appeals for the 9th Circuit, in California, told both sides to file briefs stating their positions in the next 30 days. The court heard oral arguments for the Costco case in April 2008, but put a decision on hold until the Wal-Mart lawsuit was decided.

Brad Seligman, who is the lead plaintiffs' attorney for both cases, said the Wal-Mart victory does not necessarily mean the Costco case will fail.

The Supreme Court said there were too many women — as many as 1.5 million — to be included in a single case against Wal-Mart. It also essentially said that employees can pursue class-action lawsuits only if a company has a stated policy of paying women or minorities less.

The Costco case is smaller, involving only 700 or 800 women who were denied promotions to general manager or assistant manager.

Another big difference, Seligman said, is that Wal-Mart has a decentralized system for making decisions about pay and promotions. Costco makes decisions about general and assistant managers at its Issaquah headquarters, and CEO Jim Sinegal signs off on general manager promotions, he said.

Costco General Counsel Joel Benoliel pointed to a more arcane aspect of the Supreme Court ruling that rejected the plaintiffs' attempt to combine monetary and injunctive relief. The Costco case is set up the same way and should be dismissed, he said. No figure for monetary relief has yet been attached to the case.

Benoliel said the Supreme Court is creating a fair playing field for employers facing accusations that can be impossible to defend.

"They [plaintiffs] don't want us to defend individual cases," Benoliel said. "They want to bring in a sociologist who shows how many people should've been promoted who weren't, and therefore you're guilty. We've been fighting that concept tooth and nail from the beginning and are gratified that in the [Wal-Mart] case, the court said, 'That's right. There's got to be due process for employers as well as employees.' "

Melissa Allison: 206-464-3312 or mallison@seattletimes.com