Legal Trickery – Eric A. Parzianello

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Supreme Court Gives Wal-Mart Huge Legal Victory in Sex Bias Case

Posted by Eric Parzianello on June 20, 2011

A divided United States Supreme Court this morning handed Wal-Mart Stores a huge legal victory in a sex bias case. The plaintiffs, who were current or former employees of Wal-Mart, sought damages on behalf of themselves and a nationwide class of some 1.5 million female employees, because of Wal-Mart’s alleged discrimination against women. The plaintiffs claimed that “local managers exercise their discretion over pay and promotions disproportionately in favor of men, which has an unlawful disparate impact on female employees.” A link to the complete decision can be found here.

The District Court for the Northern District of California had previously certified the class action and the Ninth Circuit Court of Appeals affirmed that ruling. The Supreme Court reversed the ruling of the Ninth Circuit and found that a class action, which would have been one of the largest in United States history, was inappropriate. The Court found that that the alleged class of workers would not have enough common “questions of law or fact” to result in a class action.

The plaintiffs wanted “to sue for millions of employment decisions at once,” but the Court held that “without some glue holding together the alleged reasons for those decisions, it will be impossible to say that examination of all the class members’ claims will produce a common answer to the crucial discrimination question.”

The Court determined that there was no significant proof that Wal-Mart operated under a “general policy of discrimination.” In fact, Wal-Mart’s announced policy forbids sex discrimination, and the company has penalties for denials of equal opportunity. The plaintiffs’ only “evidence of a general discrimination policy was a sociologist’s analysis asserting that Wal-Mart’s corporate culture made it vulnerable to gender bias.” Because the sociologist was unable to estimate what percentage of Wal-Mart’s employment decisions might be determined by stereotypical thinking, his testimony was worlds away from “significant proof” that Wal-Mart “operated under a general policy of discrimination.”

Justice Scalia wrote the the opinion of the Court, in which Justices Roberts Kennedy, Thomas and Alito joined. Justice Ginsburg wrote a dissent as to the issue of whether there were enough facts uniting the claims and believed that “Wal-Mart’s delegation of discretion over pay and promotions is a policy uniform throughout all stores.” Justice Ginsburg was joined by Justices Breyer, Sotomayor and Kagan in finding that the plaintiffs should have been permitted to “show that common class questions ‘predominate’ over issues affecting individuals.”

While Wal-Mart will still have to defend the original claims of the handful of women who brought the lawsuit and may end up facing new claims around the country, the ruling will prevent the possibility of billions of dollars in damages in a single case. Although this ruling will protect businesses from class action lawsuits based on a lack of common facts, the ruling should also highlight the importance of a written anti-discrimination policy in defending these types of actions.

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