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Supreme Court’s Walmart ruling makes it harder for workers to bring class actions

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in Employment Law,Human Resources

In the most anticipated employment law ruling of the year, the U.S. Supreme Court on June 20 said a huge lawsuit on behalf of 1.5 million female Walmart employees cannot proceed as a single class-action case.

Experts say the important ruling will make it more difficult for employees to band together in giant class-action cases against employers. (Walmart v. Dukes, No. 10-277)

The decision is a big victory for employers, who argued that a pro-employee ruling would create a surge of expensive new supersized class-action cases. The decision reversed a ruling by the 9th U.S. Circuit Court of Appeals in San Francisco that gave the green light to the class action by current and former Walmart employees.

The issue in the case wasn’t whether the company discriminated, but whether such a large group can link together in a class action. For the Supreme Court, the issue came down to commonality among such a diverse group of claims. In the end, the court said the plaintiffs’ claims didn’t have enough in common to be banded together into a single case.

“In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction,” wrote Justice Antonin Scalia. He said the workers "provide no convincing proof of a companywide discriminatory pay and promotion policy."

Scalia said there would need to be some common elements that would tie together, “literally millions of employment decisions at once.” But such evidence, Scalia said, “is entirely absent here.”

What does the ruling mean for employers? Nancy Delogu, a Washington, D.C.-based attorney with Littler Mendelson and author of the Ask the Attorney column at TheHRSpecialist.com, says: "In essence, it's no longer enough for a group of plaintiffs to say, 'We were discriminated against based on our gender,'  or age, or race, or other protected classification. Now, in order for the claims to proceed as a class, they must allege that each was discriminated against in the same way--meaning that the discrimination to each resulted from the same policy, decision, or set of facts."

Delogu says the court's decision will not change an individual's right to bring a claim of discrimination against his or her employer at all. However, she says, "it will be much more difficult for would-be litigants to join together in one massive lawsuit seeking to demonstrate that a particular company as an entity engages in discrimination, absent some evidence that all the challenged decisions can be traced back to a common discriminatory practice or policy."

Walmart's response: Walmart officials exhaled after the ruling, noting in a press release that, “As the majority made clear, the plaintiffs’ claims were worlds away from showing a companywide discriminatory pay and promotion policy ... Walmart has a long history of providing advancement opportunities for our female associates.”

The group of Walmart workers who filed the original case will have to pursue their cases individually. The plaintiffs in the case—Dukes v. Wal-Mart—say lack of training and promotion opportunities means women who work at Walmart earn 5% to 15% less than male employees.

 

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