In a landmark decision, the United States Supreme Court rejected an attempt by a number of Wal-Mart employees to pursue a nationwide class action on behalf of all female Wal-Mart employees, based on generic accusations that Wal-Mart maintained a company-wide policy of sex discrimination.
To bring any type of class action, one of the elements that a plaintiff must prove is – that there is some common issue of law or fact in common among all of the members of the proposed class. In Wal-Mart Stores, Inc. v. Dukes, decided on June 20, 2011, the Supreme Court held that the female plaintiffs had to establish something more than merely "their sex and this lawsuit" in order to pursue a class-action. Instead, they must offer "significant proof" of a "specific" employment practice that affected everyone across the company and led to sex-based discrimination. In other words, there must be "some glue holding the alleged reasons for all those [nationwide employment] decisions together."
In Dukes, the Supreme Court held that the plaintiffs' evidence was not sufficient to show that Wal-Mart used a specific identifiable employment practice on a nationwide basis that resulted in illegal discrimination:
The plaintiffs offered expert testimony that Wal-Mart supposedly employed discriminatory stereotypes in its decision-making. The Supreme Court held that this testimony was "worlds away" from being "significant proof" of any specific company-wide practice, because the expert admitted he was unable to explain what percentage of Wal-Mart's employment decisions across the country "might be determined by stereotyped thinking... If [the expert] admittedly has no answer to that question, we can safely disregard what he has to say."Lastly, the Supreme Court held that because the plaintiffs sought individualized awards of back pay, it was improper for them to seek class certification without following the procedures of Federal Rule of Civil Procedure 23(b)(3), which requires that each member of the class receive the chance to opt out of the class, requires the plaintiffs to show that their common issues predominate over any individual questions, and also requires the plaintiffs show that the class action mechanism is the superior method of resolving the particular dispute.
The plaintiffs pointed to the fact that Wal-Mart had a policy of giving discretion in pay and promotions decisions to local decision-makers. The Supreme Court said that this was "very common" and "presumptively reasonable." Giving decision-making discretion to local managers "should itself raise no inference of discriminatory conduct," absent proof of "a common mode of exercising discretion that pervades the entire company," and the plaintiffs offered no such proof.
The plaintiffs offered statistical evidence showing disparities in pay between women and men. The Supreme Court rejected this as well because the statistics were offered in a vacuum instead of being linked to a "specific employment practice" that created the alleged disparity.
Lastly, the plaintiffs offered anecdotal evidence of discrimination - individual examples of allegedly discriminatory events and statements. The Supreme Court held that this evidence was also irrelevant because it was divorced from a single unifying employment practice, and was also "too weak to raise any inference that all the individual, discretionary personnel decisions are discriminatory."
As a result of this decision, are ambiguous, aggregate "nationwide" employee class actions possible after Dukes? Probably not. Dukes makes it clear that employees who wish to join together and pursue a class action cannot rely only on extrapolations from statistics, collections of anecdotal evidence, or expert testimony about corporate "culture" to meet Rule 23's "commonality" requirement. Instead, they must point to concrete, specific, identifiable employment policies or practices that truly affected the purported class and that gave rise to the discrimination in question. In other words, they must prove that they have something else in common apart from their protected status and their desire to sue their common employer.
*B. Jason Rossiter, has extensive experience in all aspects of workplace law, including defending employers in class action suits. For more information about class or collective litigation, please contact Zashin & Rich at 216.696.4441.