U.S. Supreme Court Denies Class Certification in Wal-Mart Sex Discrimination Suit

By Sam G. Sherman

The U.S. Supreme Court recently denied class certification in a suit brought by a class of roughly 1.5 million female current and former Wal-Mart employees in Wal-Mart v. Dukes. The female employees alleged that Wal-Mart’s policy of providing local managers with discretion over employment decisions has a disproportionate impact against female employees in violation of Title VII of the Civil Rights Act of 1964.

The case went to the U.S. Supreme Court after the trial court and the Ninth Circuit Court of Appeals certified the class. The Supreme Court reversed finding the absence of a common question of law or fact applicable to all 1.5 million current and former employees. The Supreme Court began by recognizing that the “commonality” requirement in class action litigation obligates a Plaintiff to advance a common contention capable of classwide resolution. “What matters to class certification…is not the raising of common questions…but, rather the capacity of a classwide proceeding to generate common answers.”

A Plaintiff can establish commonality in two ways. First, establishing the employer used a biased testing procedure to evaluate prospective and current employees that had a disproportionately negative impact on the class. Second, Plaintiff can provide significant proof that the employer operated under a general policy of discrimination.

Plaintiff’s in this case attempted to prove commonality under the second approach. The Court rejected that effort in light of the absence of significant proof that Wal-Mart operated under a general policy of discrimination. First, Wal-Mart has an anti-discrimination policy. Second, Wal-Mart’s policy of allowing local managers to make employment decisions is a policy against uniform employment practices.

The Supreme Court recognized that other courts have found that giving discretion to local managers can support a Title VII discrimination case. However, the fact that it can does not mean that it does. The Court found that, left to their own devices, most managers will select sex-neutral, performance-based criteria for hiring and promotion. The Supreme Court found that Plaintiff fell far short of her burden to establish a common mode of exercising discretion that pervades the entire company. Wal-Mart’s incredible size was critical to the Court’s analysis. The Court found that local managers across 3,400 stores employing more than one million people were unlikely to exercise their discretion in a discriminatory fashion.

Employers can learn several lessons from the Wal-Mart case. First, make sure you have an employee handbook and, if you do, make sure it contains an anti-discrimination provision. The Supreme Court relied heavily on Wal-Mart’s anti-discrimination policy to defeat class certification.

For nationwide or regional employers, consider giving local managers discretion in employment decisions instead of funneling this authority to a single human resources department. The Supreme Court made clear that it is far more difficult for a Plaintiff to obtain class certification under such a policy.

Finally, pay attention to hiring and promotion statistics within your company. While the Supreme Court rejected Plaintiff’s statistical evidence in denying class certification, this statistical evidence was persuasive enough to convince the trial court and Ninth Circuit court of appeals to certify the class. Make sure male applicants/employees are not hired or promoted disproportionately to female applicants/employees to prevent similar claims against your company.

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