Costco has won a major victory in a sex discrimination lawsuit filed by a group of female employees. A federal appeals court in San Francisco has ruled against expansion of the sex bias lawsuit to include hundreds more female employees of the chain.

The original claim involves three women employees who filed a lawsuit against Costco in 2004, accusing the chain of sex bias. According to the lawsuit, Costco promoted women at a slower rate than male employees, and placed restrictions on promotions for female workers. In 2007, the lawsuit was given class-action status. The company appealed.

The Ninth U.S. Circuit Court of Appeals in San Francisco has now ruled that the case must be returned to District Court. According to the appeals court, the district court that ruled in favor of a class action failed to determine whether common questions of law and fact justified the class action. The appeals court also held that the class action status could not be granted because the District Court failed to consider how Costco's rights would be violated by the demand of the plaintiffs for both monetary and compensation and back pay, as well as an order ordering the warehouse chain to cease discriminatory practices. According to the appeal court’s decision, the plaintiffs had not shown questions of law and fact that were common to the group, and thereby justified a class-action.

California employment discrimination lawyers have been waiting for the results of Costco’s appeal for a while now. The company’s appeal of the district court's ruling had been pending judgment while the court waited for the historic Wal-Mart decision which came earlier this year. The Supreme Court ruled in favor of Wal-Mart, denying thousands of female employees the right to join a gender discrimination lawsuit against the retailer.