Supreme Court throws out discrimination lawsuit, but co-workers say they will file smaller claims

FROM WIRE REPORTS

The women who sought to sue Wal-Mart Stores Inc. for gender bias on behalf of 1.5 million co-workers said they will press their fight against the nation’s largest private employer in smaller lawsuits in lower courts and claims with the U.S. Equal Employment Opportunity Commission.

Left to right: Arcelia Hurtado, executive director of Equal Rights Advocates is shown Wal-mart plaintiffs Edith Arana and Betty Dukes, who started the suit when she filed a sex discrimination claim against the company.

The U.S. Supreme Court this week said the women failed to prove the world’s largest retailer had a nationwide policy that led to gender discrimination.

The court deprived them of the leverage a nationwide suit brings, both in pooled legal resources and a potential multibillion-dollar verdict, forcing them to pursue claims on their own.

"When I go back to work tomorrow, I’m going to let them know we are still fighting," said Christine Kwapnoski, an assistant manager at a Sam’s Club in Concord, Calif. She had accused a male manager of yelling at female employees and telling her to "doll up" by wearing more makeup and dressing better while working on a loading dock.

Wal-Mart may now face thousands of lawsuits nationwide and claims of discrimination before federal agencies as plaintiffs’ lawyers fan out to courts across the country to file new complaints on behalf of members of the failed group suit.

Death knell for class-action suit?

The decision is just the latest in a series of major rulings favoring business under the stewardship of Chief Justice John G. Roberts Jr.

Columbia University law professor John Coffee said the Wal-Mart ruling all but sounds the death knell for class-action suits against employers that seek money.

"This changes the balance between employers and employees. And it largely eliminates the monetary threat facing big employers," he said.

Lawsuits are expensive to bring, "and if there is no money relief at the end of the road, there is no incentive to bring the suit," he said.

Key test

The Wal-Mart case has been seen as a key test of whether civil rights lawyers, armed with computer-generated data on wages, could force the nation’s largest employer to stand trial and face billions of dollars in potential liability. Had they won against Wal-Mart, other similar suits against nationwide retailers were in the offing.

While the justices all agreed that the employees had no right to group damages under the court rule they cited in their suit, that unanimity masked a fundamental split largely along gender lines over the extent of discrimination at Wal-Mart and the amount of proof required to proceed with a class action.

Speaking for a 5-4 conservative majority in the central holding, Justice Antonin Scalia said this class-action claim and others like it are doomed without "convincing proof of a companywide discriminatory pay and promotion policy."

Pointing to a provision of the federal rules of civil procedure requiring a class action to have "questions of law or fact common to the class," Scalia said this suit does not get to first base.

Absence of bias

He said Wal-Mart has 3,400 stores spread across the United States and leaves it up to store managers to decide on pay levels and promotions.

"In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction," Scalia said. "Significant proof that Wal-Mart operates under a general policy of discrimination is entirely absent here," he said.

Roberts and Justices Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr. agreed with Scalia in Wal-Mart v. Dukes.

Scalia said this suit was flawed for another reason. A single class-action claim that supposedly speaks for a huge number of persons does not entitle all of them to "an individualized award of monetary damages."

‘Little Janie Qs’

Ruth Bader Ginsburg, joined by Sonia Sotomayor, Elena Kagan, and Stephen G. Breyer, agreed that Wal-Mart could not be forced to pay damages to all these women without individual hearings under one court rule, but argued forcibly that there was substantial evidence of discrimination and that the case should have been allowed to proceed.

Ginsburg, who specialized in cases involving gender discrimination before joining the court, pointed to data obtained from Wal-Mart that painted a portrait of a "company culture" that was biased against them. For example, while women hold about 70 percent of the hourly jobs, they make up only 33 percent of the management employees.

"The plaintiffs’ evidence, including class members’ tales of their own experiences, suggests that gender bias suffused Wal-Mart’s company culture," Ginsburg wrote. "Among illustrations, senior management often refer to female associates as ‘little Janie Qs,’" she said.

Giving male managers a free hand to make decisions on pay and promotions can, and apparently did, lead to discrimination, she said. "Managers, like all humankind, may be prey to the biases of which they are unaware," she wrote.

From the 1960s

Class-action discrimination claims were a product of the civil rights era of the 1960s. In the early years, many suits accused employers, such as trucking firms, construction companies or police departments, of refusing to hire or promote Blacks. Often, these cases resulted in an agreement to change the hiring practices.

In recent decades, federal courts –with the exception of the U.S. appeals courts in San Francisco and New York – have frowned on class-action claims that seek money on behalf of a large group of employees who say they were victims of discrimination.

The Bloomberg Business Report and a story by MCT David G. Savage were used in compiling this report.