Tag Archives: Wal-Mart

Wal-Mart 2.0: California Employees Sue for Sex Discrimination

Remember that gigantic class action the Supreme Court threw out against Wal-Mart? In that case, three named plaintiffs sought to sue the giant retailer for sex discrimination in pay and promotions, on behalf of more than a million female employees nationwide. As I noted in an earlier post, the Supreme Court tossed the case, finding that there was no commonality among the proposed class. The court pointed out that the pay and promotion decisions the women complained of were made by different managers nationwide, among other things. Although the women claimed that they had the common experience of facing discrimination because Wal-Mart gave its managers unfettered discretion to make pay and promotion decisions with a corporate culture that relied heavily on gender-based stereotypes, the Court didn’t buy it.

Yesterday, the employees’ lawyers rebooted, with what they’ve called “Wal-Mart 2.0.” They filed a class action lawsuit on behalf of California employees only — an estimated 90,000 of them — once again alleging sex discrimination in pay and promotions. According to the plaintiffs’ press release, the revised complaint relies on new statistical evidence showing pay disparities between male and female employees in comparable positions, even though the women tend to have more seniority and better performance evaluations. The complaint also alleges biased statements by decision makers and statistical evidence of bias in promotions, among other things. (You can check out the press release and the complaint; the plaintiffs’ website┬áprovides lots more information on the case.)

The lawyers for the employees have promised that this is the first in an “armada” of state and regional lawsuits to be filed against Wal-Mart in the coming months, designed specifically to meet the Supreme Court’s objections that the original nationwide class had experiences that were too diverse to join in a single lawsuit.

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.