Two days ago the U. S. Supreme Court issued its opinion in Wal-Mart Stores, Inc. v. Dukes . In the time since, there has been a good deal of reaction and more than a little overreaction. In reality this is one of those cases that is less than meets the eye.
Three women who believed they had gender discrimination claims against Wal-Mart initiated a lawsuit. They attempted to turn it into a class action involving 1.5 million female employees of Wal-Mart. The U. S. District Court certified the class and the Ninth Circuit Court of Appeals, in a divided opinion, agreed. Wal-Mart took the certification decision to the Supreme Court.
There were two separate issues involving the certification for class action. First was a claim for injunctive relief, an attempt to enjoin Wal-Mart from continuing its hiring, promotion and pay policies. The second issue was a claim for back pay, which the plaintiff’s claimed was incidental to the injunction they sought.
The company policy which was claimed to discriminate included three parts. First, Wal-Mart had a national policy forbidding discrimination based on gender. This included penalties for violating equal employment practices. Second, Wal-Mart set certain parameters for hiring, promotion and pay. For example, a person had to work in a position for one year before being considered for promotion, and pay scales were limited to a two dollar per hour range for non-managerial staff. Third, actual decisions involving hiring, promotion and pay rates were left to the discretion of local managers within the parameters set by the company.
The plaintiff’s claimed that Wal-Mart’s employment practices resulted in a culture of gender based discrimination. There was no smoking gun evidence of corporate direction to discriminate. The case rested on expert evaluation of the impact of Wal-Mart’s policies taken as a whole and anecdotal reports of discrimination in some stores. One sociologist found gender stereotyping inherent in the process, but couldn’t say whether gender stereotyping was involved in as few as 0.5% or as many as 95% of employment decisions company wide.
The main opinion of the Supreme Court was written by Justice Scalia and was divided into three parts. All nine members of the Court joined in two of the three parts. They were unanimous that back pay was not proper for class action certification. Justice Ginsburg, the most proactive women’s rights advocate ever to sit on the Supreme Court, joined in that assessment but dissented from part two of the opinion denying class certification on the injunctive relief portion of the lawsuit. While parts one and three were unanimous, part two of the opinion was adopted by a 5-4 majority, the usual conservative/liberal split.
The distinctions between the two sides are technical in nature. Class actions litigation is not part of common law jurisprudence. It exists by virtue of statute. That statute has two requirements, one for general certification and one for monetary certification. The first requires simple commonality, i.e. a common question of law or fact. The second requires that common issues predominate over individual issues. Ginsburg’s position is that there are common issues sufficient for general commonality, but that they do not predominate over individual issues for purposes of back pay damages. Ginsburg accuses the majority of infusing the core commonality requirement with the predominate issue requirement. Thus, she would certify the class for the injunctive claim, but not for the back pay.
The position of the majority is that there is no commonality at all under Wal-Mart’s scheme of employment practices. Scalia specifically denies conflating the predominate issue standard with the core commonality standard. The majority does, however, step back from prior case law that held that local discretion that results in disparate impact is actionable as a class. But, what the majority points out is that this particular case is noticeably weak in that regard, determining that it does not meet the standards of prior disparate impact cases. You will need to read the case to get the full flavor.
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Opinion. It’s hard to say whether the result would have been different given the makeup of the Supreme Court. But, my read is that the plaintiffs here presented a very weak case for certification as a class. It could be argued that it was enough, just enough, to cross the bar, but it could also be argued that it was not. The evidence they presented anecdotally covered less than 10% of Wal-Mart stores, and largely from just six states. The inability of their expert to assign stereotypical thinking to a broad cross section of employment practices certainly didn’t help. And, the inability to tie any corporate direction to a pattern of discrimination left the case with significant holes.
This does not mean that there is not gender bias and discrimination in Wal-Mart’s employment practices. Based on the statistical analysis presented by plaintiffs it appears that such a bias did exist, either consciously or subconsciously. That question was not addressed by the Court. The only issue addressed by the Court was whether the case met the necessary standard for class certification to litigate issues of bias. This may simply be a situation where a weak case results in a decision that some would like to have seen turn the other way.
That is not to diminish the very real impact of gender discrimination either within Wal-Mart or in our society generally. This just wasn’t the most acutely presented of cases from a purely legal perspective. That all nine members of the Court agreed unanimously that monetary damages were improperly certified speaks volumes to me as an attorney about the relative strength of the claim. That is why I said at the start of this piece that this case is less than meets the eye. Going forward it may have less impact than some people fear, or others hope.
Contributor, aka tidbits. Retired attorney in complex litigation, death penalty defense and constitutional law. Former Nat’l Board Chair: Alzheimer’s Association. Served on multiple political campaigns, including two for U.S. Senator Mark O. Hatfield (R-OR). Contributing author to three legal books and multiple legal publications.