June 20, 2011. Besieged by class-action litigation in recent years, employers received a major victory in the long anticipated decision in Wal-Mart Stores, Inc. v. Dukes. In a tight 5-4 decision, the United States Supreme Court ruled in favor of Wal-Mart in its efforts to defeat certification of a nationwide class of female employees. The putative class of 1.5 million women sought billions of dollars in back pay and other relief, arising from the alleged discriminatory actions of store managers.
In what Justice Scalia described as “one of the most expansive class actions ever,” current and former employees of Wal-Mart alleged systemic discrimination against women in violation of Title VII of the Civil Rights Act of 1964. Specifically, the putative class members claimed that local managers and supervisors used their broad discretion over pay and promotion decisions to discriminate against female employees.
Plaintiffs characterized the Wal-Mart “corporate culture” as strong, uniform, and accepting of bias against women such that every woman at the company was “the victim of one common discriminatory practice.” The Ninth Circuit Court of Appeals affirmed the certification of the class by the lower court, finding that plaintiffs’ evidence raised the common question whether female employees were subjected to a single set of corporate policies, as opposed to a number of independent discriminatory acts.
The Supreme Court disagreed, holding that the plaintiffs failed to demonstrate the existence of the commonality necessary for class action treatment. The Court emphasized that in addition to whether there exists common questions of law or fact, attention must be paid to the capacity of the Wal-Mart class to produce a common answer; specifically, did Wal-Mart engage in a pattern or practice of discrimination such that class members would produce a common answer to the crucial question “Why was I disfavored?”
Indeed, the Wal-Mart Court noted that the underlying reason for a particular employment decision is the crux of a Title VII inquiry. Given that the Wal-Mart case involved “literally millions of employment decisions,” the plaintiffs were required to point to “some glue holding the alleged reasons for all those decisions together.” Yet the female Wal-Mart employees failed to offer sufficient evidence that Wal-Mart operated under a general policy of discrimination. In fact, the only corporate policy established was the policy of allowing discretion by local supervisors over employment matters. As the Court observed, “[o]n its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices.”