Dukes v. Wal-Mart – What does it mean for you?

On June 20, 2011 the United States Supreme Court, in Duke v. Wal-Mart issued one of its most controversial decisions this term regarding employee class actions.

So what does this mean to you if you are an employee or an employer?  Before I turn to my view of the case and its affects, please note that this opinion is by no means a complete analysis of the Decision.  I’m simply discussing some of the highlights that I found interesting after reading the opinion and listening to commentary from legal scholars.

Facts

The facts of the case are pretty straight forward.  The case started in 2000, when a 54-year-old Wal-Mart worker in California named Betty Dukes filed a sex discrimination claim against her employer. Dukes claimed that, despite six years of hard work and excellent performance reviews, she was denied the training she needed to advance to a higher salaried position. Wal-Mart’s position is that Dukes clashed with a female Wal-Mart supervisor and was disciplined for admittedly returning late from lunch breaks.

Dukes filed a class action lawsuit in U.S. District Court in San Francisco on behalf of herself and 1.6 million female plaintiffs, including all those who work or have previously worked in a Wal-Mart store since December 26, 1998.  Dukes’ position was that Wal-Mart’s corporate policy was to refuse management training to women, but provide it to men.  What is critical in the Plaintiff’s claim is that Wal-Mart did not have an explicit policy refusing management training to women. Instead, Dukes claimed that such a policy existed because evidence the management at Wal-Mart was predominately male.  The Supreme Court ultimately ruled against Dukes and held that the case could not continue as a class action.

Employee

So if you are an employee what does this mean?  Unfortunately because of this decision it will be very difficult, if not impossible, for groups of employees to bring a class action lawsuit for race/sex discrimination against an employer unless there is an explicit corporate policy encouraging discrimination, which usually doesn’t exist – most companies aren’t that stupid.  Anything less and the case cannot continue as a class action.

Next, and even more frightening for employees and other plaintiffs, is that the decision could extend to other class actions.  Since the Supreme Court issued the decision, other courts have extended the ruling to class actions involving nonpayment of wages (overtime and minimum wage) and toxic tort claims in an effort to prevent class actions from proceeding.  My understanding is that these courts are claiming that the Dukes decision supports the claim that a class action cannot proceed if the court must conduct an analysis on each individual in the class to determine that person’s specific damage.

Employer

Conversely, if you are an employer, especially a large one, the decision is a victory for you.  The Dukes decision virtually eliminates the possibility that employees can come together and bring a class action lawsuit against your company based on discrimination.  The decision also reminds employers to carefully develop objective factors to determine when an employee is entitled to a promotion.  These factors coupled with an extensive anti-discrimination policy should be an effective tool to protect the employer from discrimination suits.

The Future of the Case

Legal scholars, particularly on the plaintiff’s side, are already discussing how the case can be overturnned.  One theory is that legislation can be passed by Congress that amends Title 7 and includes an exception to the Dukes decision.  Sample legislation has already been drafted by a Columbia Law School Professor, but it is unlikely that it will be introduced or passed by Congress since they can’t seem to agree on anything these days.

The next, and more likely way that the case will be overturned, is through a subsequent decision by the Supreme Court.  The decision in Duke’s was decided 5 to 4 (Five justices voting for it, and four voting against it).  Therefore all that is needed is for one of the majority members to retire, for the President to appoint someone who will overturn Dukes, a similar case to be brought before the Supreme Court, and then the Court, consisting of the new member, overturns the case with its new decision.

Who is to say when this will happen, but you can bet that during the next senate confirmation hearing of whoever is appointed, members from both sides will be asking questions to determine how the potential justice views the decision in Dukes.

My View

I disagree with the Court.  As a matter of public policy we need to provide Plaintiff’s with some avenue to have their case heard when it would be too burdensome for the plaintiff to proceed on his or her own.  Think about it, in many class actions, the class is made up of individual plaintiffs whose claim by itself would not justify the legal costs associated with an individual case.  The only way to make such an action feasible is for individuals with similar claims, to pull them together as one group, (i.e. a class) and then bring them at the same time.  If we eliminate this avenue, such as the Duke’s case attempts to do, then thousands of Plaintiff’s due process rights will be affected.  These Plaintiff’s will have no feasible way to bring their case before a court so their rights will continue to be violated and they will have limited or no judicial recourse for such violations.

Conclusion

As discussed above, the Dukes decision is clearly a controversial decision that has affected the rights of employees, employers and anyone else who is either a plaintiff or defendant in a class action.  Only time will tell how long this decision and its affects will last.