The settlement between Walmart and the U.S. Equal Employment Opportunity Commission (EEOC), the federal agency that enforces workplace discrimination law, avoids a trial that was slated to begin last week. It was approved by U.S. District Judge Stephanie Rose in Des Moines, Iowa.

The EEOC sued Walmart in 2022, accusing the retail giant of turning down Tiffanee Johnson for the job because of sex-based stereotypes about women with children, in violation of the federal law banning sex discrimination in the workplace.

Walmart, which has denied wrongdoing, said in a statement: "We don't tolerate discrimination of any kind. We're pleased we could amicably resolve this matter."

In its lawsuit, the EEOC said Walmart had refused to promote Johnson to a department manager job at a store in Ottumwa, Iowa, shortly after she returned from maternity leave in 2018. Walmart instead gave the job to a woman who did not have children, according to court filings.

Johnson said a manager told her that she was denied the promotion because she had small children at home and the manager was not sure if Johnson wanted to further her career at Walmart.

The company had planned to argue at trial that workers with small children are not a protected class under U.S. anti-discrimination law. Walmart also said the EEOC could not prove sex discrimination because there was no evidence that the company treated a male employee with small children more favorably than Johnson.

Gregory Gochanour, the regional attorney in the EEOC's Chicago office, in a statement said discriminating based on stereotypes about working mothers is unlawful sex bias, "plain and simple."

"Women with children deserve the opportunity to be judged fairly in the workplace based on their qualifications and abilities, not on assumptions about their commitment to their careers," he said.

In addition to the payout to Johnson, Walmart in the settlement agreed to conduct training for management employees on anti-discrimination laws and report worker complaints of sex discrimination in promotions to the EEOC for the next 15 months.

(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Bill Berkrot)

By Daniel Wiessner