Walmart Same-Sex Benefits Discrimination Settlement Gets Early Nod

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

A $7.5 million class action settlement between Walmart and workers denied same-sex spouses’ benefits is on track for preliminary approval, a Massachusetts federal judge has indicated.

U.S. District Judge William Young said at a hearing on Friday that the settlement was “exemplary” and the only thing he would modify is the calculation of attorneys’ fees.

Rather than the attorneys receiving 25 percent of the $7.5 million, the judge noted he would change the terms so the attorneys would get 25 percent of whatever the Class recovery is, noting that the Class, which is estimated to be in the thousands, might not all make claims for the entire $7.5 million.

“We’re very pleased that Judge Young informed us that he plans to grant preliminary approval, and has set a fairness hearing date of May 11,” said attorney for the workers Peter Romer-Friedman of Outten & Golden LLP. “We look forward to working to finalize the settlement.”

Judge Young told the parties he would be receptive to a briefing regarding the issue of attorneys’ fees and that he would consider all arguments with an open mind.

The settlement brings a close to a class action lawsuit filed in July 2015 by a former Walmart employee, Jacqueline Cote. Cote alleged Walmart violated her civil rights, along with the Equal Pay Act, and state employment laws, by not offering health insurance to same-sex spouses before Jan. 1, 2014.

Cote’s lawsuit followed the Supreme Court’s landmark decision to legalize same-sex marriage nationwide (Obergefell v. Hodges).

Specifically, Cote claimed that Walmart violated Title VII of the Civil Rights Act when it refused to extend employment-based health insurance benefits to her spouse, Diana Smithson, even though they were legally married under Massachusetts law in 2004 and were otherwise eligible to receive coverage.

When Smithson, who was uninsured, was diagnosed with ovarian cancer in 2012, the couple incurred more than $150,000 in medical debt for her treatment and hospitalizations.

In addition to damages, Cote sought a permanent injunction against Walmart that would prevent it from denying same-sex couples spousal health insurance benefits that are available to other employees.

Under the terms of the Walmart same-sex spouses’ benefits settlement, the $7.5 million will be divided among the few thousand workers who were denied coverage for their same-sex spouses from Jan. 1, 2011 through Dec. 31, 2013.

According to news reports, the settlement will cover legal and settlement administration costs as well as $25,000 service award for Cote for her role in representing the Class. The remaining funds will provide recovery for two groups of employees: long-form plaintiffs and short-form plaintiffs.

Long-form plaintiffs are employees who can show out-of-pocket medical expenses for their same-sex spouse during the class period, or that their same-sex spouse was insured by an alternative plan. These Class Members could be eligible to receive the amount they paid if it is less than $60,000, and two-and-a-half times the amount if they paid more than $60,000.

After the long-form plaintiffs are paid, other Walmart employees who cannot show exact expenses can submit short-form claims on pro rata basis.

This group will receive $5,000 per year of the three-year class period that they were employed by Walmart.

USA Today reports that “it’s estimated that most have potential damages ranging from hundreds of dollars to $15,000 for the value of the health insurance benefits that they were denied.”

Walmart finally altered its policy effective Jan. 1, 2014 but has not compensated those who were denied benefits prior to that nor has the company stated that it is required by law to provide the benefits.

Walmart declined to comment on Friday’s hearing, but Sally Welborn, senior vice president of global benefits for Walmart released an earlier statement that the retailer is “happy the case is resolved,” according to USA Today.

“Respect for the individual, diversity and inclusion are among the core values that made Walmart into the company that it is today. We will continue to not distinguish between same- and opposite-sex spouses when it comes to the benefits we offer under our health insurance plan,” Welborn said.

Cote is represented by Gary Buseck and Allison W. Wright of GLBTQ Legal Advocates & Defenders; Matthew K. Handley of the Washington Lawyers’ Committee for Civil Rights and Urban Affairs; Peter Romer-Friedman, Juno Turner and Sally Abrahamson of Outten & Golden LLP; and John A. Freedman, Peter Grossi and Sarah Warlikc of Arnold & Porter LLP.

The Walmart Same-Sex Spouses’ Benefits Discrimination Class Action Lawsuit is Cote v. Wal-Mart Stores Inc., Case No. 1:15-cv-12945, in the U.S. District Court for the District of Massachusetts.

UPDATE: The Walmart Same-Sex Spouse Benefits Class Action Settlement is now open! Click here to file a claim.