The 5- 4 decision handed down by the U.S. Supreme Court in Wal-Mart v. Dukes, et al. is likely to impact the size of class action lawsuits going forward.
The issues are real, but from the beginning, the case was a stretch: a class action lawsuit against Wal-Mart on behalf of its 1.6 million female employees in the United States since 1998. One-hundred twenty of these plaintiffs are named, many of whom give hard-to-dispute examples of gender based discrimination:
- When a female employee with five years at Wal-Mart and a Master's Degree asked her department manager why her pay was less than that of a just-hired 17-year-old boy, the manager said: "You don't have the right equipment. You aren't male, so you can't expect to be paid the same."
- A male department manager told a female employee that male employees will always make more because "God made Adam first, so women would always be second to men".
- A store manager told Christine Kwapnoski that he gave a male associate a larger raise because he had a "family to support". Kwapnoski says this was a common refrain from Wal-Mart managers. She was also told that she needed to "doll-up" and "blow the cobwebs" off her make-up.
- Betty Dukes, a 61-year-old greeter at a Wal-Mart store in Pittsburgh, CA, joined the company in 1994 as a part-time cashier making $5 an hour. She says the company failed to give her more responsibilities, training, and promotions on repeated occasions because she's a woman. After joining the lawsuit, she found out that two men, who had been hired long after she was, were paid more as greeters. In 2003, after nine years of employment at Wal-Mart, Dukes was earning just $8.44 an hour.
If you happen to be female and not discriminated against, however, it didn’t matter. You were included irrespective of your knowledge or consent. A class of 1.6 million against a major corporation is more attractive to plaintiffs’ attorneys than 120 individual lawsuits, after all.
And this was Dukes’ undoing. The demonstrable first-hand accounts became anecdotal, because plaintiffs’ attorneys now had to demonstrate that Wal-Mart had a companywide discriminatory policy. That’s 3,400 stores in all corners and subcultures of the United States.
Statisticians pointed out that fewer women were promoted, and that as of as of 2006, women made up more than 70 percent of Wal-Mart’s hourly employees, but fewer than 1/3 held managerial positions. Justice Ruth Bader Ginsberg noted this in her dissenting opinion. But the question before the Court was whether the women “had suffered a single wrong that allowed them to sue Wal-Mart as a block.” This would be a hard sell, because many if not most of the company’s personnel procedures were decided locally and regionally, not at their corporate headquarters in the Midwest.
With a class of this size, determining why male-to-female ratio is so skewed is nearly impossible, let alone trying to defend against it. There are likely many reasons, and arguably some which might be independent of gender-based discrimination. And then there’s the irony of women who may not have experienced gender-based discrimination and are promoted at Wal-Mart, infrequent but in existence, who are included in the class nonetheless.
The Economist also pointed out the following:
More surprising than the ruling on this question was the 9-0 ruling on another procedural point. The plaintiffs sued under a rule designed to give an entire class “injunctive relief,” i.e., an order that the defendant stop bad behavior. They also asked for back pay under that rule, which they may do only if the back pay is “incidental.” All nine judges agreed that this rule, intended to strike down discriminatory policies, was inappropriate to determine more than a million different pay claims. They said that the women must instead try for class status under a more restrictive rule that requires the issues binding the class not just be common, but that their commonality predominate, alongside other restrictive conditions. The plaintiffs offered a “trial by formula” in which a selection of plaintiffs would have their cases heard, and the results applied to the class. The court ruled unanimously that this would deprive Wal-Mart of defenses in individual cases that it was entitled to.
As a result of the Court’s ruling, we’re likely to see fewer far-reaching class action lawsuits, with a judicial preference for smaller and more specific evidence-based claims. One size doesn’t fit all.
All the more reason for individuals – not the trial lawyers – to stand up and be counted.