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Originally published September 25, 2012 at 3:27 PM | Page modified September 25, 2012 at 10:48 PM

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Class-action bias suit against Costco advances

A judge said a years-old class-action gender-discrimination lawsuit against Costco Wholesale can move forward. Costco had hoped to stop the lawsuit after a case against Wal-Mart was thrown out by the U.S. Supreme Court.

Seattle Times business reporter

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Costco Wholesale on Tuesday lost the latest round in a class-action discrimination lawsuit that began in 2004.

The case involves roughly 700 women passed over for jobs as warehouse manager and assistant manager because, the suit claims, Costco has a discriminatory system in which it does not post those positions or descriptions of them.

Costco officials had hoped to stop the suit after the U.S. Supreme Court threw out a class-action gender-discrimination case against Wal-Mart Stores.

The Costco case was put on hold for three years as the Wal-Mart case worked its way to the Supreme Court, which in 2011 said there were too many women — as many as 1.5 million — to be in a single class-action case. It also said employees can pursue class-action suits only if there is a companywide policy that results in discrimination against women or minorities.

After that decision, the Costco suit was revived in Northern California, where U.S. District Judge Edward Chen on Tuesday granted plaintiffs’ attorneys the right to move forward with discovery, after which a court date will be set.

“We think Costco is a good employer, but they’ve had a blind spot about the process for selecting warehouse managers and assistant managers,” said Jocelyn Larkin of the nonprofit Impact Fund in Berkeley, who is lead counsel for the plaintiffs. “We think it wouldn’t be difficult for them to put in place a system that would be fair for everyone.”

Two things that would help, she said, are posting openings for those positions and providing written criteria of “what it takes to be selected for the job. It’s nice for people to know this is what I have to do in order to get the job.”

Costco’s chief legal counsel, Joel Benoliel, said in an email, “We have not yet received or reviewed the decision and will have no comment today.”

Former CEO Jim Sinegal said in a 2009 interview, “We’re not in the business of discriminating against people or cheating our employees relative to their wages or anything. That’s contrary to the way Costco does business.”

In his decision to let the case proceed, Chen cited evidence that Costco has a companywide policy for deciding who run its warehouses. Top management — all the way to Sinegal — helps make those decisions, “including the maintenance of a Green Room at corporate headquarters where the photographs of potential promotees are displayed.”

Chen also cited evidence that management knows there is a diversity problem. A focus group of managers convened in 2001 found that Costco’s employee base overall reflects the U.S. population by race and gender, but the team found “serious breakdowns occur at the management level.”

Costco rejected that team’s recommendation to post jobs for all positions.

Women received only 103 of the 561 promotions to assistant general manager between 1999 and August 2004, Chen wrote, citing plaintiffs’ evidence.

Melissa Allison: 206-464-3312 or Twitter @AllisonSeattle.

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