Supreme Court’s Decision in Wal-Mart Case Severely Limits the Ability to Challenge Systemic Discrimination

Yesterday’s Supreme Court decision in Wal-Mart Stores, Inc. v. Dukes et al. will limit the use of “class action” lawsuits and make it harder to bring large-scale discrimination cases, according to many civil and human rights groups.

“Today’s 5-4 ruling erects high barriers to access to the courts,” said Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights. “As Justice Ginsburg noted in her dissent, the ruling ‘disqualifies the class at the starting gate,’ denying access to justice for the millions of Americans who rely on class actions to enforce the civil rights and anti-discrimination laws our movement has worked so hard to enact.”

The Supreme Court didn’t rule on the question of whether or not Wal-Mart discriminated against the plaintiffs – which included more than 1.6 million female employees – but rather was asked to decide whether the employees shared common “questions of fact or law” to be properly certified by the lower courts and what form of relief was available to the plaintiffs. The Court unanimously ruled that the plaintiffs could not band together to sue Wal-Mart for back pay alone in light of how a certain rule relating to the 1964 Civil Rights Act is written.

But the Court was sharply divided on the question of the commonality of the class, with the majority ruling the plaintiffs in the case did not demonstrate enough of a commonality as alleged victims of particular employment policies to warrant class certification.  In her dissent, Justice Ruth Bader Ginsburg said:

“The plaintiffs’ evidence, including class members’ tales of their own experiences, suggests that gender bias suffused Wal-Mart’s company culture…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.”

As a direct result of the ruling, each of the women involved in the class action suit alleging discrimination may have to proceed with individual law suits or smaller, multiple class action cases.. Wal-Mart, which made $14.3 billion in profits in 2010, will likely have an easier time fending off such complaints, assuming the victims even decide to file. Large companies with decentralized employment practices will likely also have an easier time defeating class action suits in the future, even if those policies lead to disparities in race and gender in pay and promotion.

“Today’s ruling undermines the very purposes of the class action mechanism and is tantamount to closing the courthouse door on millions of women who cannot vindicate their rights one person at a time. The women of Wal-Mart — and women everywhere — will now face a far steeper road to challenge and correct pay and other forms of discrimination in the workplace,” said Marcia Greenberger, co-president of the National Women’s Law Center.