Costco Wholesale Corp. workers who sued the retailer for genderbias will be able to proceed with their claims as a group.

U.S. District Judge Edward Chen in San Francisco certified aclass, or group, of plaintiffs, seeking monetary relief thatincludes several hundred women employed since 2002 who have beensubject to the Issaquah, Washington-based company's system forpromotion to management positions.

Costco “offers numerous competing explanations for the observedgender disparity in promotions,” Chen said in yesterday's ruling.“None of these explanations undermine the companywide nature of thechallenged policies and their disparate effects.”

Costco, the biggest U.S. warehouse-club chain, was sued in 2004for allegedly limiting promotions of female employees to assistantgeneral manager and general manager by failing to post jobopenings. The company denies the claims.

The ruling injects new life into the lawsuit after Costco won aruling last year voiding another judge's decision to expand thecomplaint, originally filed by three women, to includehundreds.

“We established that there was a set of company policies set atthe corporate level and that senior management was involved in thedecisions,” Jocelyn Larkin, an attorney for the Costco workers,said in a phone interview.

Bob Nelson, a spokesman for Costco, didn't immediately return aphone message seeking comment on the ruling.

A federal appeals court in San Francisco ruled last year thatlawyers for the Costco workers had to follow standards set by theU.S. Supreme Court in a June 2011 decision throwing out agender-bias lawsuit against Wal-Mart Stores Inc. involvingpotential claims for more than 1 million women. That case is knownas Dukes v Wal-Mart.

Lawyers for Costco workers went back to the trial court with anew proposal to limit the proposed class of employees to twomanagement level positions — assistant general manager and generalmanager, according to Chen's ruling.

They also targeted specific employment practices implementedcompanywide under the influence and control of top management atCostco, including a “tap-on-the-shoulder appointment process”without applications or interviews, and a mandated lack of postingfor open positions, Chen said.

Management's Instructions

“Unlike in Dukes, in which Wal-Mart permits store managers toapply their own subjective criteria when selecting candidates, herethe criteria plaintiffs allege to be subjective and unvalidatedderive from top management's own instruction,” Chen said.

Chen set a tentative trial schedule. In the first stage, a jurywould decide whether Costco discriminated against women. Chen thenwould decide whether Costco's practices had an adverse impact onthe group and if he should issue an injunction against thecompany.

Depending on the outcome, individual hearings on back pay andcompensatory damages would be held and punitive damages would bedetermined.

The case is Ellis v. Costco, 07-15838, U.S. Court of Appeals forthe Ninth Circuit (San Francisco).

Bloomberg News