SCOTUS hands discrimination suit win to Wal-Mart

The U.S. Supreme Court has delivered a decision in a massive gender discrimination suit, and the beneficiary is Wal-Mart.

The court ruled unanimously Monday that a lawsuit against Wal-Mart Stores Inc. cannot proceed as a class action suit, reversing an earlier decision by the 9th Circuit Court of Appeals. If the case had been allowed to proceed, it could have involved more than 1.5 million women and the giant retailer could have been on the hook for millions.

While the court ruling does not prevent the few women who initially brought the suit against Wal-Mart from pursuing individual claims, it does take the pressure off Wal-Mart.

“The crux of this case is commonality — the rule requiring a plaintiff to show that ‘there are questions of law or fact common to the class,’” wrote Justice Antonin Scalia. “That language is easy to misread, since ‘[a]ny competently crafted class complaint literally raises common question.’ For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get?

“Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members ‘have suffered the same injury.’ This does not mean merely that they have all suffered a violation of the same provision of law.”

Scalia adds that there must be “some glue holding the alleged reasons,” in order to answer the question of why some female workers were disfavored. There is no proof, he states, that Wal-Mart “operated under a general policy of discrimination” toward all female workers, noting that the company’s announced policy bans discrimination on gender. He dismissed earlier testimony by Dr. William Bielby, a sociology expert, who pointed to analysis of the company’s social framework to show a pattern of stereotyping by Wal-Mart.

Although all the justices concurred on the opinion that backpay was improperly included in the suit by lower courts, a companion piece penned by Justice Ruth Bader Ginsburg on behalf of herself and Justices Elana Kagan, Sonia Sotomayor and Stephen Breyer takes issue with the second section of the majority opinion, noting that the plaintiffs “largely uncontested descriptive statistics” also show that women working in the company’s stores “are paid less than men in every region” and “that the salary gap widens over time even for men and women hired into the same jobs at the same time.”

… The District Court’s identification of a common question, whether Wal-Mart’s pay and promotions policies gave rise to unlawful discrimination, was hardly infirm. 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. 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 “dissimilarities” approach leads the Court to train its attention on what distinguishes individual class members, rather than on what unites them. Given the lack of standards for pay and promotions, the majority says, “demonstrating the invalidity of one manager’s use of discretion will do nothing to demonstrate the invalidity of another’s.”

Wal-Mart’s delegation of discretion over pay and promotions is a policy uniform throughout all stores. The very nature of discretion is that people will exercise it in various ways. … A finding that Wal-Mart’s pay and promotion practices in fact violate the law would be the first step in the usual order of proof for plaintiffs seeking individual remedies for company-wide discrimination. … That each individual employee’s unique circumstances will ultimately determine whether she is entitled to backpay or damages … should not factor into the Rules 23(a)(2) determination. …

The suit sought judicial relief, punitive damages and backpay on behalf of a nationwide class of roughly 1.5 million women based on Wal-Mart’s alleged discrimination against females in violation of Title VII of the Civil Rights Act of 1964.