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Supreme Court rules for Walmart in class-action sex-discrimination case

This article first appeared in the St. Louis Beacon, June 20, 2011 - A 5-4 majority of the U.S. Supreme Court decided Monday to shut the door on a class-action sex discrimination suit on behalf of 1.5 million women workers at Walmart. The women claimed that sex discrimination pervaded the company's culture from unfair pay to sexist comments by male supervisors about the "Janie Q's" working for them.

The all-male majority said the women's claims didn't have enough "commonality" to satisfy federal rules on class actions. Justice Antonin Scalia said there wasn't enough "glue" to hold together the women's complaints and allow the case to be resolved "in one stroke."

All three women justices and Justice Stephen Breyer dissented from the court's decision to shut down the lawsuit. "Gender bias suffused Walmart's corporate culture," wrote Justice Ruth Bader Ginsburg.

Women's groups, such as the National Women's Law Center, criticized the decision for making it too hard for women to win equal pay and immediately called for Congress to pass the Paycheck Fairness Act, which would make it easier for employees to join together in class actions against their employer.

The decade-old lawsuit against the nation's largest employer was the largest class-action lawsuit ever filed in an employment discrimination case. The impact of the decision will not be limited to the employment discrimination cases, however. The court's higher bar of proof for commonality could affect class actions by shareholders and consumers.

Splinter Suits

Donna Harper, a veteran employment discrimination lawyer at Sedey Harper in St. Louis, said that a big Walmart suit now could splinter into hundreds of smaller suits. "Smaller groups of Walmart employees and former employees could band together," she wrote in an email. "For instance, women who worked at a particular store, distribution center, or other large unit of Walmart, under a manager or group of managers who could be shown to have made unlawful decisions, used unlawful criteria, or who worked in a particular district or region whose leaders were averse to women entering the ranks, might be able to proceed."

Barbara Seely, regional attorney for the Equal Employment Opportunity Commission in St. Louis, wrote in an email that she thought "the court made a pragmatic decision that the class was just too big and the litigation would have been unmanageable." The EEOC does not have to comply with the federal rule involved in the case, but Seely wrote,"I am sure that we will have the Walmart opinion thrown in our faces every time we bring a class case."

In the national class-action thrown out by the Supreme Court, the women provided statistical evidence that the disparties in pay and promotion could not be explained by any factor other than sex discrimination. The ratio of male to female managers is 70-30 even though two-thirds of lower-level employees were women. Statistics showed that women were paid less than men hired at the same time. Women were paid about $1 an hour less than men even though they had better job evaluations.

In addition to statistics, the women provided anecdotes of sexism in the workplace. One of the named plaintiffs, Christine Kwapnoski who worked in the Grandview, Mo., store, told of a male manager yelling at her to "doll up" and to "blow the cobwebs off her makeup."

But Scalia said that a few anecdotes did not substitute for proof that every worker in the class suffered from the same discriminatory policy. The court noted that Walmart has a policy barring discrimination and providing penalties for those supervisors who do discriminate. The company also gives great discretion to managers in its 3,400 stores around the country, making it unlikely that a single discriminatory practice could affect all of the women involved in the class action.

That requirement that members of a class be able to identify a single employment policy that discriminated against all of them could provide an almost insurmountable hurdle for future attempts to file national class action lawsuits, employment lawyers said. Companies have long since jettisoned overtly discriminatory policies.

Rule 23

The case revolved around interpretation of Rule 23 of the Federal Rules of Civil Procedure, which sets out the requirements for class actions.

The court was unanimous on one point -- that the lower courts had been wrong to allow the case to move forward under Rule 23(b)2. Cases under that rule cannot include the substanial claims of monetary relief involved in the Walmart suit.

But Ginsburg and the other dissenters would have left the door open to the case continuing under Rule 23(b)3. That kind of case can involve the monetary damages sought by the Walmart employees. But, as Ginsburg put it, Scalia prevented the Walmart women from getting out of the "starting gate" under that rule by deciding that there wasn't enough commonality.

For commonality, Rule 23 requires that "there are questions of law or fact common to the class." Ginsburg pointed out that the rule does not require all questions of law and fact to be in common, just that one question. It was enough to decide, as the trial judge did, that the common question was "whether Walmart's pay and promotions policies gave rise to unlawful discrimination."

But Scalia disagreed. "Their claims must depend upon a common contention -- for example, the assertion of discriminatory bias on the part of the same supervisor," he wrote. "That common contention, moreover, must be of such a nature that it is capable of classwide resolution -- which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke."

The problem with the Walmart suit, Scalia wrote, was that the women "have little in common but their sex and this lawsuit."

To Congress

Congress would have the power to overturn the court's interpretation of the federal rule of procedure as long as it does not violate the Constitution in the process. In fact, Congress has overturned a long list of Supreme Court decisions in civil rights cases over the past two decades, including passage of the Lilly Ledbetter Fair Pay Act of 2009 that extended the statute of limitations in equal pay cases.

House Minority Leader Nancy Pelosi supported that course of action saying Monday that the Walmart decision "sets back the cause of equality for women and for all Americans in the workplace and in our society." She added, "Today's ruling underscores the need to act boldly and strongly on behalf of women's rights: we must pass the Paycheck Fairness Act to ensure that women receive equal pay for equal work. It is a matter of fundamental fairness in our nation, and we must work -- in the courts and in Congress — to correct this injustice throughout our country."

One constitutional limitation that Congress could face if it decides to try to overturn the decision is the Due Process Clause. Scalia suggested at various points in his opinion that companies need to be treated fairly so that they can defend themselves against specific allegations of discrimination.

Saint Louis University law professor Marcia McCormick wrote on the Workplace Prof Blog that the Supreme Court seemed to be put off by the size of the Walmart case and its heavy reliance on statistics. (Another Saint Louis University professor, Matthew Bodie, writes in the New York Times that the decision reflects the court's view that workplace issues should be dealt with in the workplace, not in the courts.)

She wrote: "First, this case came down to the size and complexity of both Walmart's operation and the potential class. A majority of the court simply did not believe that all of the class members could possibly be injured in the same way given the multitude of decisionmakers at issue -- even for the disparate impact claim, which doesn't require intent. Second, a majority of members of the court do not seem to believe that causation can be proven by statistical analysis, something that is evident not just in employment discrimination cases, but in other areas as well. A majority of the court seems very suspicious of the idea that implicit bias could support a claim for disparate treatment -- that doesn't seem the right kind of bias that those justices seem to think must form the basis for a disparate treatment case."

William H. Freivogel is the director of the School of Journalism at Southern Illinois University Carbondale and a professor at the Paul Simon Public Policy Institute.

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