Wal-Mart v. Dukes: A Supreme Blow to Corporate Accountability, the Class Action Vehicle – and Justice

by | Jun 27, 2011 | Supreme Court and Judicial Nominations

Cross-posted from the American Constitution Society.

The Supreme Court’s decision in Wal-Mart v. Dukes was deeply disappointing for those who care whether workers can vindicate their statutory rights. Last week’s narrow and controversial decision creates new hurdles for the 1.5 million women who are fighting the discriminatory pay and promotion practices of the nation’s largest private employer and for all workers who seek to challenge systemic employment discrimination in the future. The ruling sets a dangerous precedent that will make it easier for employers – especially large ones – to discriminate against their employees while, at the same time, making it harder for workers to come together to challenge it.

Wal-Mart’s ten-year strategy in this case was to divide and conquer. Unfortunately, that strategy prevailed before the Supreme Court. The corporate giant convinced a narrow majority to reverse lower court decisions to certify the class of women. The Court was sharply divided on the question of whether the women should be allowed to move forward.

Justice Scalia’s opinion for the five justices in the majority held that the women could not proceed because they did not satisfy the commonality requirement of Rule 23(a) of the Federal Rules of Civil Procedure, which provides that a class can only proceed if there are common questions of law or fact.

By contrast, Justice Ginsburg’s opinion for the four dissenters found that the plaintiffs’ voluminous anecdotal, statistical and sociological evidence did in fact present common questions that should enable the class to proceed. The dissenters recognized that the plaintiffs’ evidence “suggests that gender bias suffused Wal-Mart’s company culture.” They also recognized that the plaintiffs satisfied their burden to identify “particular policies and practices” that were “alleged to affect, adversely and globally, women employed at Wal-Mart’s stores.” In other words, the dissenters recognized a widespread culture of discrimination that played out in lower pay and fewer promotions for women.

While there was agreement that the class could not be certified under the procedures set out under Rule 23(b)(2), the dissenters would have remanded the case for a determination of whether the class could proceed under the notice and opt-in requirements of Rule 23(b)(3).

The majority’s narrow reading of Rule 23 in the case establishes new and troubling precedents. Even though the Court was presented with the limited question of whether to certify the class, the majority delved deep into the merits of the underlying claims of discrimination. They noted that an employer could not “operate[] under a general policy of discrimination” if it has an “announced” anti-discrimination policy on the books, as Wal-Mart did. The majority seemed to suggest that plaintiffs should have to meet some threshold ratio of affidavits relative to the number of class members. On one hand, the majority discounted sociological expert evidence of bias and stereotypes in the corporate culture on the basis that such evidence could not be quantified in precise figures; on the other hand, they discounted statistical evidence that quantified the discrimination.

Ultimately, the majority concluded that a corporate policy that delegated excessive, subjective decision-making authority to managers did not create a common question. However, the dissenters noted that unstructured policies and practices open the door for unlawful bias to creep into personnel decisions. “The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects,” wrote Justice Ginsburg. “Managers, like all humankind, may be prey to biases of which they are unaware. The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes.”

The Wal-Mart decision underscores the urgent need for a system of justice that levels the playing field for individuals like Betty Dukes who challenge corporate Goliaths like Wal-Mart. As noted in the amicus brief filed by the National Partnership for Women & Families, the U.S. Women’s Chamber of Commerce and California Women’s Lawyers, historically, class actions have served as a tool to do just that – to level the field for workers seeking to vindicate statutory rights and obtain meaningful relief. Class actions have long played a key role in rooting out discrimination, and they provide an efficient mechanism that can serve the interests of workers, employers and the courts.

Even though the Court dealt a significant blow to the women of Wal-Mart and to the class action vehicle with this decision, the fight for fair pay and fair opportunities for advancement for women is not over. This decision was a denial of class certification alone; it did not pertain to the merits of the significant claims of discrimination. The plaintiffs have vowed to continue their fight for justice in the courts through smaller class actions or individual cases.

On a parallel track, advocates will intensify the fight to advance policy solutions. The Court’s decision underscores the need for legislation like the Paycheck Fairness Act, which would deter companies from breaking the law and provide real remedies for those who experience discrimination.

Women need fair pay and fair opportunities for advancement – for themselves, their families and the strength of our communities. The pursuit of justice at Wal-Mart and throughout the country is far from over.