Monthly Archives: June 2011

Wal-Mart Wins Class Action Case in Supreme Court

Yesterday, the Supreme Court gave employers a huge win in the case of Wal-Mart Stores v. Dukes. The case was a class action lawsuit that alleged the giant retailer discriminated against female employees when making decisions on pay and promotions. There were three named plaintiff-employees, who sought to bring the lawsuit on behalf of more than a million female employees nationwide.

The Supreme Court wasn’t asked to rule on whether any employees had been discriminated against. Instead, the Court looked only at the class action issue: whether it was appropriate for the employees to bring these claims as a group. The Court concluded that it was not — and the ruling will likely result in fewer class actions over all kinds of issues, from civil rights cases to product liability claims.

The employees claimed that Wal-Mart engaged in a pattern and practice of discrimination against women by allowing its (mostly male) managers to exercise nearly unfettered discretion in making pay and promotion decisions, within a corporate culture that relied on gender-based stereotypes. The effect of this combination, the plaintiffs claimed, were significant disparities in pay and promotions to management between women and men. The employees presented anecdotal evidence from employees and statistical evidence of the disparities, in their effort to get a class action certified.

In a class action, a representative group brings a lawsuit on behalf of everyone who’s in the same position. The class action framework is intended to promote efficiency and fairness by allowing everyone’s claims to be decided at the same time, according to the same standards, rather than through a number of separate lawsuits that could result in contradictory outcomes. But to bring a class action, the plaintiffs have to meet certain requirements, intended to make sure that it’s fair both to other class members — whose rights will be determined by the lawsuit, even if they don’t participate — and to the defendant, who will have to defend against time-consuming and costly large-scale allegations.

The Supreme Court decided that the case couldn’t proceed as a class action because the plaintiffs hadn’t met one of these threshold requirements: that there be at least one common issue of law or fact among the class members (“commonality”). Because the women worked at stores across the 50 states, reporting to different managers, and bringing their own skills, performance history, and other attributes into play, the Court found that they didn’t have commonality. The Court was especially dismissive of the plaintiffs’ claim that allowing managers to make subjective, discretionary decisions could provide the necessary common ground for the class action.

Four Justices dissented from this part of the ruling. Justice Ginsburg, writing for the minority, identified the key common question for the class as “whether Wal-Mart’s discretionary pay and promotion policies are discriminatory.” In addition to reviewing the plaintiffs’ statistical and anecdotal evidence, she pointed to other facets of Wal-Mart’s nationwide practice, such as requiring that all employees promoted to management be willing to relocate and allowing managers to set pay within a two dollar range, which left room for the operation of gender bias.

The majority’s opinion in the Wal-Mart case is likely to have a significant impact on future class actions because it sets a stricter standard for getting these cases off the ground. As Justice Ginsburg points out, the commonality standard had previously been interpreted more leniently. The key question wasn’t whether there were dissimilarities among the class members, but whether there was at least one crucial similarity, a question that could be answered for the entire group. We’ll have to see what the ultimate effect of this case will be, as lower federal courts apply it going forward. For now, though, advocates for business groups and employees alike agree that it will limit the number and size of class actions in the future.

 

 

 

 

Connecticut Becomes First State to Require Paid Sick Leave

Last week, Connecticut passed a law requiring private employers to give paid sick days to service employees. Currently, San Francisco and Washington, D.C. mandate paid sick leave; a handful of other states are considering similar legislation. But Connecticut is the first to impose this requirement statewide. The New York Times reports that the new law will cover an estimated 200,000 to 400,000 employees in the state.

Here are some details about the law, Connecticut Public Act 52:

  • It applies only to companies with at least 50 employees. Manufacturers aren’t subject to the law, nor are nationally chartered nonprofits that provide recreation, child care, and education services. Employers that already provide employees with at least 40 hours of paid time off each year that can be used as sick leave (such as sick days, personal days, or vacation time) don’t have to provide any additional time off under the law.
  • Only service workers are covered. This includes those employed in the retail, hospitality, food preparation and service, administrative, health care, janitorial and cleaning, claims processing, and a number of other industries. (You can find the full list of covered job categories in the law, at the link above.) Independent contractors, day laborers, and temporary workers aren’t covered.
  • Services workers are covered only if they are entitled to earn minimum wage and overtime. In other words, exempt employees aren’t covered by the law; only nonexempt employees are protected.
  • Covered employees will accrue one hour of paid sick leave for every 40 hours worked, up to a maximum entitlement of 40 hours per year. Employees may also carry over up to 40 hours into the next year.
  • Employees may use the time off for their own illness, injury, or health condition; for a spouse’s or child’s illness, injury, or health condition; or to handle certain medical, legal, and practical issues stemming from family violence or sexual assault.

The law goes into effect on January 1, 2012.

Summer Jobs and Sexual Harassment

June is here, and it’s time for teenagers everywhere to don their uniforms, paper hats, and  flair for their summer jobs (if they’ve been lucky enough to land one). But be careful out there kids: Sexual harassment of teens is a big problem, particularly for girls. Just yesterday, the EEOC announced that it had settled a case for $290,000 against a Dunkin’ Donuts franchise, in which a manager had repeatedly touched, hugged, and made lewd comments to female teenage employees.

Although the EEOC keeps statistics on sexual harassment charges, the agency doesn’t provide the age of the complaining employee. And of course, just like adults, many girls choose not to complain or file a charge. According to one study cited in the PBS program “Is Your Daughter Safe at Work,” 200,000 girls are assaulted in the workplace every year. A 2005 study showed that almost half of the teenage girls surveyed had been harassed at their jobs.

These numbers are high, but unfortunately not that surprising. Egregious sexual harassers are predators, and predators choose their prey with care. Teenage girls are targeted precisely because they are the least experienced, least powerful, and least likely to complain. To help combat the problem, the EEOC has set up its Youth at Work website, which informs teens of their rights and responsibilities under the laws that prohibit harassment and discrimination.