Earlier this week, perhaps the largest Title VII employee class action case ever contemplated was considered by the Supreme Court. Around 1.5 million female Wal-Mart employees claimed discrimination and a class action was initiated. The focus of their claim was that the discretion given to local Wal-Mart supervisors over pay and promotion matters violates Title VII of the Civil Rights Act of 1964 by discriminating against women. The informal opinion can be found here.
The three main plaintiffs who initiated the suit claimed that their local managers favored male employees for pay increases and promotions, which caused a disparate impact on female employees. These plaintiffs argued that Wal-Mart’s refusal to curtail its managers’ authority amounts to disparate treatment.
In this case, the plaintiffs claimed that the existence of a blatant “corporate culture” permitted bias against women, and consciously or subconsciously influenced the local managers’ pay and promotion decisions. Plaintiffs alleged that this “culture” breeds a common discriminatory practice that essentially affects every woman working at Wal-Mart.
A class must meet the commonality requirement to survive de-certification of the class action. Members of the class must have suffered more or less the same treatment. Here, the plaintiffs could not establish that Wal-Mart has a “general policy of discrimination.” In fact, the Court held that the record demonstrated that Wal-Mart has a policy that penalizes discriminatory acts. Because supervisors had broad discretion, and did not discriminate under general corporate direction, the plaintiffs were unable to identify a uniform employment practice that ties all 1.5 million claims together or that provides the commonality needed for a class action. Giving local supervisors broad discretion on employment decisions is the opposite of having uniform employment practices, the court noted.
Moreover, plaintiffs failed to identify a valid common mode of exercising discriminatory discretion that pervades the entire company. The court added that “[i]n [General Telephone Co. of Southwest v.]Falcon, we held that one named plaintiff’s experience of discrimination was insufficient to infer that “discriminatory treatment is typical of [the employer’s employment] practices.”
The court also concluded that respondents’ claims for back pay were improperly certified under Federal Rule of Civil Procedure 23(b)(2), which does not authorize class certification when each class member would be entitled to a different injunction or individualized award of monetary damages.
While the Supreme Court’s ruling does not bar the original plaintiffs from suing Wal-Mart, the Court’s decision prevents this case from moving forward as a class action. This decision is an important result for employers located in Virginia and throughout the United States as it will now generally require plaintiffs in Title VII actions to establish the common nature of any alleged discrimination with greater specificity and particularity.
