Dive Brief:

• In a settlement that has implications for its rivals as well as for businesses beyond retail, Wal-Mart Stores Inc. has settled a lawsuit over its denial of same-sex spousal benefits from the time when its policy was to deny such couples health insurance, according to a press release.

• Wal-Mart will earmark $7.5 million for some 1,100 employees (and possibly more) who’d been denied such benefits before January 2014, when the company changed its policy to include same-sex spouses.

• "We're happy both sides could come together to reach a resolution,” Sally Welborn, Wal-Mart's senior vice president of global benefits, said in a statement. “Respect for the individual, diversity and inclusion are among the core values that made Wal-Mart into the company that it is today.”

Dive Insight:

For more than a quarter century, the prevailing argument for LGBTQ plaintiffs in workplace discrimination cases has been to cast their treatment as unfair and unlawful because their employers insisted on conformity to gender stereotypes, leaving alone the idea that they were discriminated against because of their sexual orientation.

But since then, the Equal Employment Opportunity Commission and many federal courts have found that discrimination on the basis of sexual orientation is “inherently” sex discrimination and therefore illegal under the Civil Rights Act of 1964, the New York Times reports.

The plaintiff in this case, Jacqueline Cote v. Wal-Mart Stores, Inc., said in a statement that she was happy with the outcome. "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. “It's a relief to bring this chapter of my life to a close."

Cote, represented by GLBTQ Legal Advocates & Defenders, Outten & Golden LLP, the Washington Lawyers' Committee for Civil Rights & Urban Affairs, and Arnold & Porter LLP, had made both those arguments. The fact that Wal-Mart declined to argue with the second stipulation signals something of an entrenchment of that line of reasoning, The New York Times said.

While Wal-Mart nearly three years ago changed its policy to include same-sex partners, it had also maintained that it had no legal obligation to do so. Cote’s attorneys argued in this case that left their client and other gay and lesbian workers vulnerable because the policy could be changed at any time.

In announcing the deal, Wal-Mart’s Welborn indicated that the retailer is solidifying its commitment to include same-sex couples in its benefits policies. “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,” she said in a statement.

The settlement also signals the success of a new line of argument that could allow LGBTQ plaintiffs to more easily prevail in court in such matters. While the incoming administration of president-elect Donald Trump is expected to at least try to reverse many of the policy and legal changes of the last eight years, this and other court and agency rulings have likely given enough momentum to the issue that this treatment of same-sex couples under benefits policies would not be easily reversed, according to the Times.