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BREAKING: Supreme Court Rejects Class Action Against Wal-Mart

Posted in Class Actions, Discrimination & Harassment, Litigation

Back in March, I reported on the likelihood of a victory for Wal-Mart in an important class action case up at the U.S. Supreme Court.

Court sides with Wal-Mart

This morning, the Supreme Court unanimously rejected the class action against the nation’s largest employer, saying, in essence, that the women who were bringing the sex discrimination charges would have to pursue them on their own.

You can read the court’s full decision here.

As I noted back in March, this case was not about whether Wal-Mart actually discriminated against the women. Instead, the court was merely asked to rule on a procedural question: Can these women bring suit in behalf of more than all 1 million plus women who worked at Wal-Mart. To that question, the court said “no”.

From a legal perspective, what the court was really addressing whether the claims were “common”.  But the court went beyond that, a bit, and that has potentially huge implications in class action discrimination cases going forward:

In this case, proof of commonality necessarily overlaps with respondents’ merits contention that Wal-Mart engages in a pattern or practice of discrimination. That is so because, in resolving an individual’s Title VII claim, the crux of the inquiry is “the reason for a particular employment decision.” Here respondents wish  to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer to the crucial question “why was I disfavored”. …

But the court was split 5-4 on whether the plaintiffs here should be precluded going forward. The majority said yes, rejecting the idea that the statistics here showed what the plaintiffs said or could be used in that fashion.

The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal-Mart’s “policy” of allowing discretion by local supervisors over employment matters.  On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business—one that we have said “should itself raise no inference of discriminatory conduct”.

To be sure, we have recognized that, “in appropriate cases,” giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory—since “an employer’s undisciplined system of subjective decisionmaking [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination.”  But the recognition that this type of Title VII claim “can” exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation—and surely most managers in a corporation that forbids sex discrimination—would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all.

There’s a lot more to this decision and I expect to do a full write-up in an upcoming post.

In addition, the Supreme Court also rejected a First Amendment retaliation claim brought by an employee as well. I’ll have more on that tomorrow.