WAL-MART SEX-DISCRIMINATION LAWSUIT THROWN OUT

The Supreme Court threw out a sweeping sex-discrimination lawsuit against Wal-Mart Stores Inc., ruling Monday that the 1.6 million women allegedly victimized had too little in common to form a single class of plaintiffs.
The Supreme Court has ruled in favor of Wall Mart in a massive sex-discrimination lawsuit. The labor law case split the court 5-4 along its ideological divide, with Justice Antonin Scalia's majority opinion concluding the allegations against Wal-Mart were too vague and the evidence too weak to establish the common injury essential to encompass all women employed since 1998 in the roughly 3,400 U.S. Wal-Mart stores.
The decision is sure to reverberate in other employment class actions, with lower courts scrutinizing more carefully the factors that constitute a class for the purpose of bringing mass claims.
Wal-Mart defense attorney said the ruling would have a significant impact on other pending gender class-action suits, including against Costco Wholesale Corp and minorities who want to find a lawyer. The Costco suit alleges a "glass ceiling" for women at the store level. Costco, which has denied the allegations, declined to comment Monday. A lawyer for the Wal-Mart plaintiffs who also represents the Costco plaintiffs, said the latter case is far narrower, focusing on two job classifications—store manager and assistant store manager—and is unlikely to be affected by Monday's ruling.
The impact of the ruling on other cases will depend in part on companies' personnel policies, said a law firm that represents employers. Regulated industries—including utilities, transportation and telecommunications—generally use rigid formulas for personnel decisions that remain open to class-action suits, if they produce work forces that significantly disadvantage employees of a particular race or sex. In contrast, high-tech companies in competition for engineers tend to make ad hoc salary and promotional decisions that lack the commonality Justice Scalia wrote was essential for class actions.
Even before the ruling, the case was affecting pending class-action suits. Last week, workers and Best Buy Co. agreed to settle a case that alleged the electronics retailer systematically discriminated against women and minorities in hiring and promotions. The company agreed to change its personnel policies concerning professional liability and pay monetary awards of only $290,000, to be divided among the nine named plaintiffs.
Long Road to High Court
June 2001
Six current and former employees of Wal-Mart Stores Inc. sued the retailer in federal court in San Francisco, charging it discriminated against women in pay, compensation and promotions.
June 2004
A federal judge in San Francisco ruled the suit could proceed as a class action.
April 2010
The Ninth Circuit Court of Appeals, in a divided opinion, upheld its earlier decision that the suit could proceed as a class-action case but removed as plaintiffs former workers who weren't employed at the time the case was filed.
August 2010
Wal-Mart asked the U.S. Supreme Court to review the Ninth Circuit decision upholding the class action.
December 2010
Supreme Court agreed to review the case.
March 29, 2011
Supreme Court heard oral arguments in the case.
June 20, 2011
The Supreme Court ruled that the suit cannot proceed as one large class action.
The pending Wal-Mart decision was an "incentive for both sides to settle," said the attorney for the Best Buy plaintiffs. "The Wal-Mart decision reaffirms the settlement we did was a good one."
The Supreme Court's conservative majority gave businesses another shield against class actions in an April case from California, upholding an AT&T Inc. cellphone contract that required consumers to go through individual arbitration.
The Wal-Mart lawsuit, filed in 2001, accused the world's largest retailer of systematically paying female workers less than men and providing them fewer opportunities for promotion. Wal-Mart consistently denied the claims, which could have resulted in billions of dollars in back pay and punitive damages, and said it had a strict policy against discrimination.
Wal-Mart praised the ruling. "As the majority made clear, the plaintiffs' claims were worlds away from showing a companywide discriminatory pay and promotion policy," it said in a statement. The company said it is a good place for women to work and "will continue its efforts to build a robust pipeline of future female leaders."
Lawyers for the women who claim they were victimized said they would regroup.
The attorney who argued the case on behalf of the three named plaintiffs seeking to represent the class of 1.6 million, said the legal team would seek to fashion smaller, more focused class-action suits that could target regions or stores. In addition, he said the team would encourage women who believe Wal-Mart discriminated against them to file individual complaints with the Equal Employment Opportunity Commission.
The case has never gone to trial, as Wal-Mart fought the plaintiffs' effort to proceed as a single class. The suit alleges that Wal-Mart's personnel policy, which granted individual managers wide discretion over promotions and raises, permitted sex biases that pervaded the corporate culture to deny fair opportunity to women. As a result, the plaintiffs alleged, women remained concentrated in the retailer's low-wage rank and file, while men dominated the managerial ranks.
Those statistics showing pay and promotion differences prove nothing by themselves, Justice Scalia wrote, joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito.
The plaintiffs must identify a "specific employment practice," such as a biased testing procedure, that unlawfully discriminates, Justice Scalia wrote. "Merely showing that Wal-Mart's policy of discretion has produced an overall sex-based disparity does not suffice," he wrote.
Under the Federal Rules of Civil Procedure, which set out the criteria for class-action lawsuits, plaintiffs must demonstrate that the facts and law at issue is "common to the class." While lower courts found the plaintiffs' evidence sufficient to proceed to trial, Justice Scalia all but ridiculed the data and experts the plaintiffs provided.
The plaintiffs' sociology expert couldn't say "whether 0.5% or 95% of the employment decisions at Wal-Mart" could have resulted from bias, Justice Scalia wrote, quoting from the court record. "We can safely disregard what he has to say," he wrote.
Because each manager had such wide discretion, "literally millions of employment decisions" were at issue in the suit, he wrote. "Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say" that all the women could provide "a common answer to the crucial question why was I disfavored."
In dissent, Justice Ruth Bader Ginsburg wrote that the allegations met the test earlier Supreme Court decisions have set out for employment-discrimination suits and civil rights law.
At Wal-Mart, she wrote, the lower court said promotions were made by a "tap on the shoulder" process. "Vacancies are not regularly posted…managers choose whom to promote on the basis of their own subjective impressions," she wrote, joined by Justice Stephen Breyer and the court's other women, Sonia Sotomayor and Elena Kagan.
To the dissenters, the evidence "suggests that gender bias suffused Wal-Mart's company culture."
Wal-Mart says that it has worked hard to expand employment opportunities since the suit was filed.
The plaintiffs' lawyer, said some women had said they got significant raises their managers attributed to the case but said he hadn't seen evidence that all of the plaintiffs' concerns have been addressed.