The Supreme Court on Monday blocked the nation’s largest-ever sex discrimination case, ruling in favor of Wal-Mart in a decision that raises significant hurdles for other class-action suits brought against big corporations.
As many as 1.5 million current and former female workers could have been included in the class suing Wal-Mart, the world’s largest private employer, and the company faced the possibility of owing billions of dollars in back pay. But the court’s conservatives said the women had not proved they had suffered from a common policy of discrimination.
“Because respondents provide no convincing proof of a companywide discriminatory pay and promotion policy, we have concluded that they have not established the existence of any common question” necessary for a class-action suit, Justice Antonin Scalia said in the 5 to 4 opinion.
The case was the most important of the term for corporate interests, some of which face the same kind of class-action suits filed by female employees. More than 20 of the country’s largest companies filed a brief supporting Wal-Mart in the case.
Justice Ruth Bader Ginsburg and the court’s liberals, who include the court’s two other female justices, said the women should have been given the chance to prove their case.
Ginsburg said there was ample evidence that there were problems at Wal-Mart, where, when the suit was filed, women held 70 percent of the hourly jobs but made up only 33 percent of management employees.
“The court, however, disqualifies the class at the starting gate,” she wrote in dissent. She was joined by Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan.
Wal-Mart attorney Theodore J. Boutrous Jr. called the ruling “an extremely important victory not only for Wal-Mart but all companies that do business in the United States.”
The sentiment was echoed by Robin Conrad of the U.S. Chamber of Commerce’s litigation arm: “This is, without a doubt, the most important class-action case in more than a decade. We applaud the Supreme Court for affirming that mega-class actions such as this one are completely inconsistent with federal law.”
Attorneys for the plaintiffs — six company workers who sought to represent the rest of Wal-Mart’s female workforce — acknowledged that the decision effectively ends their suit, although they said individual discrimination suits or smaller class-action litigation might be an option.
Class actions are favored by those alleging discrimination because they can force employers to change their practices. And often individual discrimination suits carry too small a payoff for lawyers to take.
Washington lawyer Joseph M. Sellers, the plaintiffs’ attorney, said the decision “raises hurdles that workers have to surmount.” His co-counsel, Brad Seligman, said the ruling did not decide whether Wal-Mart was guilty of discrimination, and he directed women who think they were harmed to a Web site where they can register complaints for future legal action.
“Wal-Mart’s not off the hook,” Seligman said.
Marcia D. Greenberger, co-president of the National Women’s Law Center, said it was a “devastating decision” that leaves companies free to discriminate as long as they do not officially coordinate illegal policies.
“The court has told employers that they can rest easy, knowing that the bigger and more powerful they are, the less likely their employees will be able to join together to secure their rights,” Greenberger said in a statement.
Scalia said the plaintiffs fell far short of presenting evidence to support their central contention: that despite Wal-Mart’s corporate policy against discrimination, local managers in charge of hiring, pay and promotion at the company’s 3,400 stores were reinforcing its male-dominated culture.
Scalia, however, said, “In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction.” He wrote for Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr.
He said the women try to make their case “by means of statistical and anecdotal evidence, but their evidence falls well short.”
Ginsburg, however, said the case should be allowed to move forward, citing an expert’s study that contended the pay and promotion disparities at Wal-Mart “can be explained only by gender discrimination and not by . . . neutral variables.”
The women presented evidence that “gender bias suffused Wal-Mart’s company culture,” Ginsburg wrote. She added: “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.”
The court’s rejection of using statistical analysis to prove a common practice of discrimination could be key to the viability of future class-action discrimination suits against large employers.
Scalia said that plaintiffs had filed 120 affidavits reporting discrimination — “about 1 for every 12,500 class members” — and that there were no anecdotes of discrimination from employees in some states included in the study.
He disputed the work of a researcher the lower courts relied on who used a “social framework” to show the company was vulnerable to sex discrimination because of its strong corporate culture.
That, Scalia said, is “worlds away from significant proof” of a general policy of “discrimination.”
The court was unanimous that the district judge in California and the U.S. Court of Appeals for the 9th Circuit had erred in the way the class was certified. Claims for back pay for women in the group should not have been allowed in the type of class action the women filed, the high court said.
The decision brought fresh condemnation from critics who think the court favors corporate interests. Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vt.) said it was part of a pattern.
“Over the past two years, the American people have grown frustrated with the notion that some corporations are too big to fail,” Leahy said in a statement. “Today’s decision will undoubtedly make some wonder whether the Supreme Court has now decided that some corporations are too big to be held accountable.”
Betty Dukes, a Pittsburg, Calif., Wal-Mart greeter who is the named plaintiff, predicted a wave of individualized discrimination lawsuits.
“My voice has been heard, but I’m not the only Betty Dukes in this country,” she said.
The case is Wal-Mart v. Dukes.