LawNerd: Wal-Mart Case Raises Alarm Bells For Future Discrimination Cases

By Advokat June 24, 2011

[pullquote]In other words, it is apparently just fine to have the boys’ club picking the next batch of members for the boys’ club – or at the least, that isn’t the same as having a corporate policy of discrimination.[/pullquote]All eyes were on the Supreme Court this week as it issued a long-anticipated decision in Wal-Mart v. Dukes.  The main issue was whether a class of 1.5 million women who have worked at Wal-Mart since 1998 could proceed as a class with common claims in a lawsuit challenging pay and promotion practices that allegedly discriminate against women.  The answer, according to five of the nine Supreme Court justices, was “no.”

The decision not only directly impacts those 1.5 million women, but also raises serious alarm bells for future attempts to challenge systemic workplace discrimination.  The majority – notably, comprised of all of the male justices but one, and none of the three female justices – rejected the idea that nearly completely subjective pay and promotion practices, with unfettered supervisor discretion, could establish that the women in the plaintiff class shared a common basis for their discrimination claims.

Here’s how Wal-Mart’s pay and promotion decisions apparently work:  There are virtually no standards or criteria for setting wages – in other words, nothing to counter unconscious bias of supervisors.  The same is true for promotions, for which the policy has been characterized as a “tap on the shoulder” process.  Vacancies are not regularly posted; managers choose employees for promotion based on their own subjective impressions.

And what’s the result of Wal-Mart’s system of entirely subjective decision making?  Surprise, surprise:  Women at Wal-Mart stores in every region are paid less than men.  In fact, the salary gap widens over time, even for men and women hired into the same jobs at the same time.  Further, women fill 70 percent  of hourly jobs at Wal-Mart, but only 33 percent of management positions.

Yet the majority held that the plaintiffs lacked a common claim, and Justice Antonin Scalia practically scoffed at the plaintiffs’ contentions that there was, in effect, a company-wide discriminatory policy: “The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal-Mart’s ‘policy’ of allowing discretion
by local supervisors over employment matters…. It is a policy against having uniform employment practices.  It is also a very common and presumptively reasonable way of doing business. ”

In other words, it is apparently just fine to have the boys’ club picking the next batch of members for the boys’ club – or at the least, that isn’t the same as having a corporate policy of discrimination.  According to the majority, there simply wasn’t enough “glue” to hold together the millions of employment decisions at issue – not enough to establish that these decisions were all the result of discrimination as a standard corporate operating procedure.

The Court also discounted other types of evidence commonly accepted to prove class claims of discrimination, such as statistical evidence and anecdotal evidence that gender bias was part of the company culture, finding that even in combination with the complete discretion given to supervisors, it was not enough to establish that there was systemic bias or a common culture of discrimination.

Moreover, Scalia pointed to the fact that the company had a formal policy prohibiting discrimination to show that really, the company didn’t have any practices or policies that resulted in discrimination.  Never mind that almost any business of a decent size these days probably has a similar anti-discrimination policy … on paper.  (And it’s not as if a company is going to announce as a policy that it will discriminate - these days, anyway.)

The reality, of course, is that all people, including managers, have biases of which they aren’t even aware.  In Justice Ginsburg’s words, “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.”

The upshot?  The Wal-Mart women can still pursue individual claims, or even pursue their claims in smaller classes.  But there continue to be enormous barriers to individuals pursuing valid claims; it takes a lot of courage and stamina, not to mention the ability to find a lawyer and to afford the cost of litigation.

Keep in mind that the whole purpose of the class action is to provide an efficient means of pursuing claims that are difficult to bring as individual actions – often claims that involve systemic bias of exactly the sort alleged here, rather than intentional discrimination against a single individual.  Thus, perversely, when discrimination is as insidious to a corporate culture as at Wal-Mart, it may now be even harder to establish a claim in court – and systemic discrimination may be more likely to go unchallenged.
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