tagline
logo

Wal-Mart Stores, Inc. v. Dukes, No. 10-277 (U.S. S. Ct. June 20, 2011)

| Jun 20, 2011 | Daily Developments in EEO Law |

The Wal-Mart decision winds down the current class action against the retail giant, but also – by a bare majority – nudges all of Title VII law, class and individual, back in a familiar and unwelcome direction.

Wal-Mart Stores, Inc. v. Dukes, No. 10-277 (U.S. S. Ct. June 20, 2011): The ten-year saga of the Wal-Mart sex discrimination class action has already been widely reported today. Stripped to the basics, Betty Dukes and several other past and present female employees of Wal-Mart charged the retail chain with systematic sex discrimination in pay and promotion in its over-3000 locations nationwide. The record of discrimination was vigorously in dispute; in the end, a district court held – and a divided U.S. Court of Appeals for the Ninth Circuit affirmed – that the case should be adjudicated as a single class action under Title VII, a class estimated to include some 1.5 million women.

That class case, had it been tried, would have first determined whether there was a company-wide “pattern or practice” of sex discrimination at Wal-Mart that affected some or all of the class members, in violation of Title VII; and, second – had Wal-Mart been found liable – what kind of monetary and other remedies would be suitable to remedy the violation. Under the lower court’s order, this case would have proceeded without individual notice to the class and without an opportunity for individual class members to “opt out” of the case. Such mandatory, no-notice classes may be certified under Federal Rule of Civil Procedure 23(b)(2).

The Supreme Court today disagrees with that class procedure as applied to this nation-wide case. In two different rulings, both signed by Justice Scalia, the Court holds that the district court took unwarranted shortcuts to hold the case together as a single proceeding.

One part of the decision (section III, joined by all nine justices) holds that monetary relief is not typically available in mandatory Rule 23(b)(2) actions. The Court declines to hold that such relief can never be awarded under (b)(2), but says that such mandatory, no-notice, no-opt-out class actions are narrowly limited – by the terms of that subsection – to claims involving “injunctive relief or corresponding declaratory relief . . . respecting the class as a whole.”

Injunctive or declaratory relief, a prospective judicial reordering of the legal relationship between the class and defendant, is regarded as belonging to – and indivisible from – the class. But individualized monetary relief, the Court holds, should ordinarily be conceived as belonging to the class members one at a time; such cases must proceed (if at all) through a different section of Rule 23 (Rule 23(b)(3)) that authorizes money damages. Section (b)(3) imposes more stringent safeguards for individual class members to control their own claims (especially notice and the opportunity to opt-out of the case) and requires that the many class members’ claims are closely-related enough to be tried together in one proceeding.

The second ruling (section II), joined by only five of the justices, proved the more controversial. The majority holds – over Judge Ginsburg’s dissent – that the Wal-Mart class lacked sufficient “commonality,” a threshold to class certification for any Rule 23 class in federal court (under Rule 23(a)(2)).

In the majority’s central holding, it refashions the commonality requirement as a two-step test (emphasis added):

“Their claims must depend upon a common contention – for example, the assertion of discriminatory bias on the part of the same supervisor. 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.”

Applying this newly-forged test to the Wal-Mart class, the majority concludes that there is insufficient evidence in the record of a “common contention” that would hold the 1.5 million class members together. The class had argued since the  beginning of the case that Wal-Mart violated Title VII by conferring excessive, unregulated authority on store managers to award pay raises and promotions, resulting in a predominantly male management routinely giving better opportunities to men.

The majority views the world differently:

“[L]eft to their own devices most managers in any corporation – and surely most managers in a corporation that forbids sex discrimination – would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. Others may choose to reward various attributes that produce disparate impact – such as scores on general aptitude tests or educational achievements, see Griggs v. Duke Power Co., 401 U. S. 424, 431-432 (1971). And still other managers may be guilty of intentional discrimination that produces a sex based disparity. In such a company, demonstrating the invalidity of one manager’s use of discretion will do nothing to demonstrate the invalidity of another’s. A party seeking to certify a nationwide class will be unable to show that all the employees’ Title VII claims will in fact depend on the answers to common questions.”

Although the focus of the Wal-Mart opinion was the class action itself, this language bears special contemplation for all Title VII cases. This segment of Justice Scalia’s opinion stretches for nearly the length of a paragraph, yet it is supported with no pertinent authority (save for the general citation to the Griggs case). The presupposition that a commanding majority of U.S. managers would never discriminate is significant to the result today, but it is simply a guess on the majority’s part. 

This was not the presupposition of Congress in 1964, when it first passed Title VII against a backdrop of rampant and undisguised race and sex discrimination in the workplace.

Nor was this the guiding philosophy behind Congress’s 1991 amendments to Title VII – then enacted to correct various of the Supreme Court’s pro-defendant 1988-89 term decisions. Congress then found:

“(1) addition al remedies under Federal law are needed to deter unlawful harassment and intentional discrimination in the workplace;

“(2) the decision of the Supreme Court in Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989) has weakened the scope and effectiveness of Federal civil rights protections; and

“(3) legislation is necessary to provide addition al protections against unlawful discrimination in employment.”

In short, Congress recognized that – even a generation after its passage – the promise of the 1964 Civil Rights Act had not been achieved, and that the Act needed to be bolstered against erosion both in the workplace and in the federal courts.

So individual plaintiffs proceeding with Title VII claims face a renewed challenge in 2011 – overcoming a fresh generation of case law that threatens to return us to a “Mission Accomplished” complacency. More will need to be done, one individual case at a time, to persuade judges and juries that bias can be insidious and may operate unwittingly (such as in this term’s Staub v. Proctor Hospital). It is also fair to demonstrate, with the benefit of academic research and possibly expert witnesses, that bias can operate on the subconscious level and proximately cause discriminatory acts.

tell us about your case

Archives

our office locations

Outten & Golden LLP
685 Third Avenue, 25th Floor  
New York, NY 10017  
Phone: 212-245-1000
Map and Directions

Outten & Golden LLP
One California Street, 12th Floor
San Francisco, CA 94111
Phone: 415-638-8800
Map and Directions

Outten & Golden LLP
601 Massachussetts Avenue NW
Second Floor West Suite 200W
Washington, DC 20001
Phone: 202-847-4400
Map and Directions