All eyes are on the Supreme court as the justices are about to hear what could potentially be the largest class action suit in US history. In Dukes v. Wal-Mart, there’s more at stake than just damages for over 1.5 million women: the outcome of the ruling could determine how big a class action suit can get. This could have huge ramifications for some of the world’s largest corporations, which have workforces the size of armies. It could also affect the legal recourse available to individual employees and consumers who have been wronged by a company.
First, some background on the case. In 1994, Betty Dukes started working for a Wal-Mart store in Pittsburgh, California as a part-time cashier and greeter. She was excited about the job, because she was told that she could move up quickly since Wal-Mart views itself as a family-run store and likes to hire from within its ranks. After a number of years working at the store, Dukes expressed dissatisfaction with the advancement opportunities available, which started off a series of tense encounters with higher management that resulted in demotions and pay cuts. Dukes took her situation to the Impact Fund, a local civil rights group that provides funds for litigation, and found out that she was not alone in her situation. In 2001, she filed a gender discrimination suit against Wal-Mart in the U.S. District Court of Northern California, and agreed to stand as a representative for a larger class of women. By 2010, the Ninth circuit court of appeals upheld the decision to allow the case to go to trial as a class action, but Wal-Mart is looking for the Supreme Court to overturn the decision, claiming that there are not enough similarities to between the 1.6 million current and former female Wal-Mart employees to constitute a class.
The case doesn’t just rest on Dukes’ individual story — that’s not how class actions work. Dukes’ lawyers looked into the issue, and hired a statistician to examine the hiring and promotion rates at Wal-Mart stores across the nation. While women make up almost three quarters of Wal-Mart employees, only about a third of its managers, which are typically hired from the existing employee pool, are female. According to the plaintiffs, even these numbers don’t give the total picture, since the majority of female managers work in low-level managerial positions. Only 10% of store managers (and 4% of district managers) are women. Compare these statistics to Wal-Mart’s top 20 competitors, where women make up around 56% of management. In nearly every employment category, women at Wal-Mart earned less than men, regardless of seniority.
The retail giant argues that because it gives local managers the discretion to hire, fire and promote employees based on criteria like teamwork and integrity, there’s no corporate culture of gender discrimination. In other words, an individual store manager’s decision can’t be held as representative of the company as a whole. This practice of local decision-making makes it hard to prove gender discrimination on an individual basis, but it may not have as much bearing on class action claims. That’s because Wal-Mart is such a huge chain that there’s plenty of data that can be used to reveal a larger pattern. The numbers favor statistical analysis: Wal-Mart’s large workforce provides a huge sample size, so anomalies in promotions in individual stores cancel each other out.
And yet, while the statistics seem to show that something odd is happening at Wal-Mart, the numbers may not be enough to justify a class action case. For one thing, a statistical relationship can give reasonable grounds for suspecting criminal activity (in this case, discriminatory practices violating the Civil Rights Act), but can’t explain the cause of the relationship. It’s up to the lawyers to prove that the discrepancy in employment statistics is due to Wal-Mart’s practices, and thus far not all the judges have been convinced. In his dissent, Ninth Circuit Chief Justice Alex Kozinski commented that it seemed that the class in this case actually “had little in common other than their sex and this lawsuit”.
This brings us to the next point: class actions, as the name implies, center around the composition of a class of plaintiffs. The class must be a collection of individuals who were injured or affected in the same way by the actions of a company. The question here is, have all 1.5 million women formerly or currently employed by Wal-Mart since 1998 experienced similar forms of sex discrimination? It’s hard to say. Some women have more claim than others, and some may have none at all. Similarly, some states may be hotspots for discrimination but others are more neutral. While statistics can show that a lot of women have been discriminated against, how can you tell which ones in order to create a class? Then again, for a chain of this size, does it even matter, since there’d be no realistic way for Wal-mart to handle claims on an individual basis.
If Wal-mart wins the case in the Supreme Court, Dukes v. Wal-Mart cannot go to trial as a class-action, but the decision would have farther-reaching effects. Nation-wide job bias suits would be crippled, since employees who work in different stores and hold different jobs wouldn’t be considered to have enough in common to constitute a class. This could effectively grant class-action immunity to certain mega chains. On the other hand, if Dukes wins, it could be easier to file class-action discrimination suits, which has the potential to improve working conditions and fight social injustice. As Slate noted, in the ten years since Dukes first filed suit, Wal-Mart has “made an impressive effort to treat women more equitably,” and Dukes’ own pay was raised back to $15.23 an hour. It could also have the potential to create a whole new type of class action suit based on statistical evidence rather than specific incidents.
While it’s hard to say which way the case will go, one thing’s for sure: either way, Wal-Mart will be facing legal headaches for a long time.
- Wal-Mart gender suit before U.S. top court (cbc.ca)
- High court appears to favor Wal-Mart in gender-bias case (chron.com)
- Court hears argument in Wal-Mart sex bias claim (ctv.ca)
- Wal-Mart “too big” to be sued? (cbsnews.com)