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| U.S. Supreme Court rules in Wal-Mart Stores Inc. v. Dukes |
| Today, the U.S. Supreme Court released its long-awaited opinion on class actions, Wal-Mart Stores Inc. v. Dukes , an employer victory. It was a 9-0 decision. The class was alleging that pay and promotion decisions at Wal-Mart were generally committed to the discretion of local managers and were exercised in a largely subjective manner. The class alleged that this set up resulted in sex discrimination and the 9th U.S. Circuit Court of Appeals approved a class of about 1,500,000 current and former employees, according to the high court's opinion. Recall the old Wendy's commercial where a dissatisfied customer asked a Wendy's competitor, "Where's the beef?" Well, Justice Antonin Scalia, writing for the court, said essentially, "Where's the glue?" In other words, where is the commonality between employment decisions made involving 1,500,000 employees? The whole idea behind a class action is that it is an efficient way to resolve numerous complaints of discrimination in one fell swoop, but only if there are common issues to be decided. Here, the court rejected the opinion of a sociological expert that Wal-Mart had a "strong corporate culture" that makes it "vulnerable" to "gender bias" as long on conclusions and short on specifics. What about statistical evidence showing a national or regional disparity between women and men? The Supreme Court rejected this evidence, as well, because it was subject to too many localized variations writing, "Some managers will claim that the availability of women, or qualified women, or interested women in their stores' area does not mirror the national or regional average." Again, no commonality. Finally, the class' argument that the fact that local managers had discretion over hiring was evidence of class discrimination was "just the opposite of a uniform employment practice that would provide the commonality needed for a class action. . . ." Remember the phrase from the economic meltdown, "too big to fail." In the Wal-Mart case, the class was just too big to be certified. It collapsed under its own weight. Class actions are still with us, but like a lot of other things, they will get downsized. By the way the court also addressed the more technical question of whether Federal Rule of Civil Procedure 23(b)(2), the provision permitting injunctive relief, also allows class treatment for back pay claims. By a 5-4 vote, the court said it did not. |
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