The former employee, Jacqueline Cote, who is a lesbian, argued in the class action lawsuit that Walmart violated Title VII of the U.S. Civil Rights Act of 1964 by discriminating against her based on her sex when it refused to provide health insurance coverage for her wife.
Cote has said that as a longtime Walmart associate at Walmart’s Swansea, Mass., store she applied for health insurance benefits for her wife shortly after the couple married in 2004, when Massachusetts became the first state in the nation to legalize same-sex marriage.
The lawsuit says Walmart informed her that while it provided health insurance benefits to opposite-sex spouses it had a policy of not providing those same benefits to legally marriage same-sex spouses.
A statement released by the LGBT litigation group GLAD says Walmart has agreed to pay $7.5 million to cover the expenses incurred by the spouses of more than 1,000 current and former Walmart employees who were denied health insurance coverage between Jan. 1, 2011 and Dec. 31, 2013.
Walmart ended its policy of not providing health benefits to same-sex spouses in January 2014.
“We’re happy both sides could come together to reach a resolution,” said Sally Welborn, Walmart’s senior vice president for global benefits. “Respect for the individual, diversity and inclusion are among the core values that made Walmart into the company that it is today,” she said.
“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 in a statement.
Cote began working for Walmart in Maine in 1999 and transferred to another Walmart store in Massachusetts and remained with the company until she left her job earlier this year.
The lawsuit says Cote and her wife, Diana “Dee” Smithson, struggled to pay for a separate health insurance policy for Smithson up until 2012, when the policy was cancelled. A short time later, Smithson was diagnosed with ovarian cancer and incurred thousands of dollars in medical expenses while uninsured.
“I’m pleased that Walmart was willing to resolve this issue for me and other associates who are married to someone of the same-sex,” Cote said in a statement. “It’s a relief to bring this chapter of my life to a close.”
The New York Times reports that legal observers consider it significant that Walmart chose to settle the case rather than argue in court that Title VII of the 1964 Civil Rights Act doesn’t apply to cases alleging discrimination against gays and lesbians.
Although the famed civil rights law doesn’t specifically mention gays and lesbians or sexual orientation, the U.S. Equal Employment Opportunity Commission, which is charged with enforcing U.S. civil rights laws, recently issued an opinion declaring that sexual orientation discrimination is, in fact, covered by the law.
The EEOC stated in its opinion that discrimination against gays and lesbians is based on a form of gender stereotyping that falls under the category of sex discrimination.
The EEOC’s interpretation has been challenged in other court cases and legal experts say it’s unclear whether it will be universally accepted by the courts.
“Some employers, as well as some employee groups, will be wondering if this reflects Walmart’s assessment of where courts might be moving,” the Times quoted University of Colorado law professor Helen Norton as saying.