Supreme Court to Rule on Whether Wal-Mart Discrimination Suit is Class-Action

Robin Marty

In what could be a great boon for the retailer, the Supreme Court has announced it will hear Wal-Mart's appeal that the gender discrimination suit not be allowed as class-action.

It has been nearly a decade since allegations of sexual discrimination were filed against one of the country’s largest retailers, but today the Supreme Court has announced that they will in fact rule on whether the discrimination lawsuit can be heard as a class action lawsuit or not.

Via CNN:

The justices announced Monday they had accepted the Arkansas-based company’s appeal in a case of corporate versus worker rights, and will hold oral arguments next spring. A divided 6-5 ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals earlier this year had allowed the combined, multiparty litigation to move ahead to one trial, where a verdict against the company could result in billions of dollars in damages.

At issue is whether as many as 1.6 million current and former Wal-Mart employees can band together in their claims of discrimination, which they say has occurred over the past decade, at least. The plaintiffs allege women were paid less than, and were given fewer opportunities for promotion than, their male counterparts. They seek back pay and punitive damages against the world’s largest retailer.

Appreciate our work?

Vote now! And help Rewire earn a bigger grant from CREDO:

VOTE NOW

The high court will decide only whether to handle the original lawsuit as a class action, instead of lower courts potentially being flooded with thousands of individual discrimination claims against the company. A potential ruling by the justices against Wal-Mart permitting class action could put severe pressure on the company to settle the claims out of court.

As lawyer Jessica Pieklo wrote when the case was first appealed to the Supreme Court:

Wal-Mart’s petition does not challenge the substance of the discrimination claims, but rather seeks to have the class certification aside–a smart move that could set plaintiffs efforts back years if granted.  If denied Wal-Mart may find a whole new interest in settling these claims rather than trying them.

This case has been in the pipeline for ages now.  It was originally filed in 2001 by six women in federal court in San Francisco, and Wal-Mart has vigorously battled against the claim every step of the way. It’s a pretty safe assumption that Wal-Mart will seek review of the decision by the United States Supreme Court.  Given the Federalist bend of Chief Justice John Roberts, it would be another safe assumption that this is a case he’d be eager to hear.  The Roberts Court has shown an itch to attack threshold procedural questions like jurisdiction and class-action status as a way to limit the availability of federal courts to plaintiffs.

Blocking the ability to file class action lawsuits wouldn’t just limit the prosecution and punishment of companies who discriminate, but even the awareness that the practice is occurring, which is how many find out about discrimination in the first place.  According to Nancy Folbre at the New York Times:

One important way that workers find out about discrimination is through the reporting of successful class-action lawsuits. Many of these suits, however, end with confidential settlements that discourage publicity. Prof. Minna Kotkin of Brooklyn Law School argues that “secret settlements have created an information vacuum.”

Even cases that go to trial and result in major victories for plaintiffs, like the recent case against Novartis, the pharmaceuticals giant, don’t seem to get much publicity.

Folbre gives an excellent rundown of how the company-wide discrimination worked, via a boy’s club buddy system that nearly barred women from any chance of advancement.

According to expert testimony by William T. Bielby, a sociologist who analyzed company documents, Wal-Mart managers were not required to post information about new job openings or training opportunities. They could simply “tap the shoulder” of workers they liked the best and invite them to apply.

Most managers were men, and the evidence seems to suggest that they preferred to tap other men on the shoulder. More than two-thirds of Wal-Mart’s hourly employees at the time were women, but women represented fewer than one-third of lower-level managers and only 15 percent of store managers.

The case will be precedent-setting, not just for potential discrimination suits yet to come, but in relation to whether or not corporations have any legal responsibility over how individual franchises are run, even if the franchisees are in fact instituting a policy handed down by corporate itself.  But more interesting will be how the newest members of the Supreme Court rule on the matter, as both Justices Sotomayor and Kagan have experience in the matter. 

The New York Times writes in an additional article:

In their briefs in the case, Wal-Mart Stores v. Dukes, No. 10-277, the two sides cited the work of the court’s newest justices to the court. Wal-Mart twice relied on an influential unsigned law review note that Justice Elena Kagan wrote as a student at Harvard Law School on class certification in employment discrimination suits.

The plaintiffs responded by noting that Justice Sonia Sotomayor had voted to certify an even larger class action in an antitrust case involving eight million merchants when she was a judge on the United States Court of Appeals for the Second Circuit, in New York. Wal-Mart was a plaintiff in that class action.

Judge Sotomayor acknowledged that the very fact of class certification provided the plaintiffs with “leverage in settlement negotiations.”

“While the sheer size of the class in this case may enhance this effect,” she added, “this alone cannot defeat an otherwise proper certification.”

The case will be one of the most highly watched cases on the 2011 docket. It is will also be vivid reminder of the difficulties of ensuring equal pay for equal work that has stalled in the opposition of the Lily Ledbetter Paycheck Fairness Act, which was once again voted down in Congress.

Analysis Law and Policy

Federal Court Says Trans Worker Can Be Fired Based on Owner’s Religious Beliefs

Jessica Mason Pieklo

“Plain and simple, this is just discrimination against a person because of who she is,” said John Knight, the director of the LGBT and HIV Project of the American Civil Liberties Union of Illinois, in an interview with Rewire.

When the U.S. Supreme Court ruled in 2014 in Burwell v. Hobby Lobby that the owners of secular for-profit businesses could challenge laws they believed infringed on their religious liberties, civil rights advocates warned that the decision was just the start of a new wave of litigation. On Thursday, those predictions came true: A federal district judge in Michigan ruled that a funeral home owner could fire a transgender worker simply for being transgender.

The language of the opinion is sweeping, even if the immediate effect of the decision is limited to the worker, Aimee Stephens, and her boss. And that has some court-watchers concerned.

“Plain and simple, this is just discrimination against a person because of who she is,” said John Knight, the director of the LGBT and HIV Project of the American Civil Liberties Union of Illinois, in an interview with Rewire.

Appreciate our work?

Vote now! And help Rewire earn a bigger grant from CREDO:

VOTE NOW

According to court documents, Stephens, an employee at Detroit’s R.G. & G.R. Funeral Homes, gave her boss—the business’ owner—a letter in 2013 explaining she was undergoing a gender transition. As part of her transition, she told her employer that she would soon start to present as a woman, including dressing in appropriate business attire at work that was consistent both with her identity and the company’s sex-segregated dress code policy.

Two weeks later, Stephens was fired after being told by her boss that what she was “proposing to do” was unacceptable and offensive to his religious beliefs.

In September 2014, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit on behalf of Stephens, arguing the funeral home had violated Title VII of the federal Civil Rights Act, which prohibits employment discrimination. According to the EEOC, Stephens was unlawfully fired in violation of Title VII “because she is transgender, because she was transitioning from male to female, and/or because she did not conform to the employer’s gender-based expectations, preferences, or stereotypes.”

Title VII of the Civil Rights Act allows those employees who have been discriminated against in the workplace to collect money, known as civil damages. Those damages usually come in the form of lost wages, back pay, and funds to make up for—to some degree—the abuse the employee faced on the job. They are also designed to make employers more vigilant about their workplace culture. Losing an employment discrimination case for an employer can be expensive.

But attorneys representing Stephens’ employer argued that the Religious Freedom Restoration Act (RFRA) protected their client from legal liability for firing Stephens. On Thursday, a federal court agreed. It said that paying such damages for unlawfully discriminating against an employee could amount to a substantial burden on an employer’s religious beliefs. 

According to the court, despite the fact that Stephens’ boss admitted he fired her for transitioning, and despite the fact that the court found this admission to be direct evidence of employment discrimination, RFRA can be a defense against that direct discrimination. To use that defense, the court concluded, all the funeral home owner had to do was assert that his religious beliefs embraced LGBTQ discrimination. The funeral home had “met its initial burden of showing that enforcement of Title VII, and the body of sex-stereotyping case law that has developed under it, would impose a substantial burden on its ability to conduct business in accordance with its sincerely-held religious beliefs,” the court wrote.

In other words, Hobby Lobby provides employers a defense to discriminating against LGBTQ people on the basis of religious beliefs.

“The RFRA analysis is extremely troubling, and the implications of it [are] as well,” said Knight. “I believe this is the first case applying RFRA to a Title VII claim with respect to nonministerial employees.”

If the scope of the opinion were broader, Knight continued, “this would allow [employers in general] to evade and refuse to comply with uniform nondiscrimination law because of their religious views.”

This, Knight said, is what advocates were afraid of in the wake of Hobby Lobby: “It is the concern raised by all of the liberal justices in the dissent in Hobby Lobby, and it is what the majority in Hobby Lobby said the decision did not mean. [That majority] said it did not mean the end of enforcement of nondiscrimination laws.”

And yet that is exactly what we are seeing in this decision, Knight said.

According to court documents, Stephens’ boss has been a Christian for more than 65 years and testified that he believes “the Bible teaches that God creates people male or female,” that “the Bible teaches that a person’s sex is an immutable God-given gift, and that people should not deny or attempt to change their sex.” For Stephens’ former boss, Stephens’ transition to a woman was “denying” her sex. Stephens had to be fired, her boss testified, so that he would not be directly complicit in supporting the idea that “sex is a changeable social construct rather than an immutable God-given gift.”

If the “complicit in denying God’s will” sounds familiar, it should. It has been the exact argument used by businesses challenging the birth control benefit of the Affordable Care Act. Those business owners believe contraception is contrary to God’s will and that complying with federal law, which says birth control should be treated in insurance policies as any other preventive service, makes them complicit in sin. Thursday’s decision cites Hobby Lobby directly to support the court’s conclusion that complying with federal nondiscrimination law can be avoided by asserting a religious objection.

Think of the implications, should other courts follow this lead. Conservatives have, in the past, launched religious objections to child labor laws, the minimum wage, interracial marriage, and renting housing to single parents—to name a few. Those early legal challenges were unsuccessful, in part because they were based on constitutional claims. Hobby Lobby changed all that, opening the door for religious conservatives to launch all kinds of protests against laws they disagree with.

And though the complaint may be framed as religious objections to birth control, to LGBTQ people generally, and whatever other social issue that rankles conservatives, these cases are so much more than that. They are about corporate interests trying to evade regulations that both advance social equity and punish financially those businesses that refuse to follow the law. Thursday’s opinion represents the next, troubling evolution of that litigation.

CORRECTION: This article has been updated to clarify John Knight’s position with the American Civil Liberties Union of Illinois.

Analysis Law and Policy

The Issue of Trans Student Rights Inches Closer to the Supreme Court

Jessica Mason Pieklo

With several cases in the legal pipeline, it's becoming a question of when—not whether—the Roberts Court will step into the fight over transgender rights and bathroom access.

On August 29, the Gloucester County School Board in Virginia will file a request asking the U.S. Supreme Court to step into the fight over whether transgender student Gavin Grimm can use the bathroom that aligns with his gender identity. Grimm’s case is not the first of its kind, but it has become one of the most high-profile.

At this point, it’s not a question of whether the Roberts Court is likely to take a case concerning what rights transgender students have under Title IX. It’s more a question of when.

Title IX of the Education Amendment Act of 1972 is a federal civil rights law that prohibits discrimination on the basis of sex in any federally funded education program or activity. Historically, civil rights advocates have used Title IX to guarantee female students access to equal classes, facilities, and educational opportunities. It’s also recently become an important, if flawed tool in addressing campus sexual assault.

“Basically anything distinguishing between boys and girls or men and women is prohibited under Title IX, unless there is a specific exception in the statute or regulations allowing it to happen,” Joshua Block, senior staff attorney with the America Civil Liberties Union’s LGBT & HIV Project and one of the lawyers on Grimm’s case, explained to Rewire in an interview.

Appreciate our work?

Vote now! And help Rewire earn a bigger grant from CREDO:

VOTE NOW

Title IX has some small carve-outs for when and under what conditions schools may discriminate on the basis of sex, Block noted. “The Department of Education has passed very detailed regulations saying when you do and don’t have to integrate a sports team,” he explained. “It’s passed detailed regulations on under what conditions a school [can] offer sex-segregated classes. Those would otherwise be prohibited unless … authorized by the regulation,” he said.

Among the carve-outs for allowable sex-segregation under Title IX is a regulation dealing with restroom and locker room access, which is at the heart of cases like Grimm’s. And it’s that carve-out that has sparked the legal fight over trans rights at school.

“There is a long-standing regulation that says schools can have separate restrooms and can have locker rooms divided by sex,” said Block. “Now fast forward 40 years later and you have school districts saying that this regulation not only gives them permission to have boys’ and girls’ rooms, but it gives them permission to essentially banish transgender kids from those restrooms by saying they can’t use a restroom consistent with their gender identity.”

The legal landscape of trans student rights to access restrooms and locker rooms consistent with their gender identity has been shifting well before Grimm’s lawsuit. Since as early as 2009, schools in places like Maine and Illinois have faced lawsuits for prohibiting students from accessing restrooms and locker rooms consistent with their gender identity. Meanwhile, states like California and Colorado have provided affirmative protections for transgender students in the form of nondiscrimination laws so students can use restrooms and locker rooms consistent with their gender identity. But that means transgender students across the country are subject to a patchwork of legal protections that are not uniform across the country: A trans student in California has, at least in theory, more legal protections against discrimination at school than one in Mississippi. So for many trans students, Title IX is the only legal protection against discrimination they have.

Through a series of administrative actions, the Department of Education (DOE) since 2013 has tried to nudge reluctant school administrators toward understanding the difference between providing for sex-segregated facilities and using those facilities as justification for discriminating against transgender students. It has notified federally funded schools that failing to allow transgender students access to restrooms and locker rooms consistent with their gender identity will subject those schools to litigation and risk their federal funding. In other words, the DOE made explicit its interpretation of federal law: Schools may have sex-segregated facilities like restrooms, but they cannot determine on the basis of gender identity which students have access to which facilities.

Significantly, the Obama administration filed a friend-of-the-court brief in Grimm’s case, urging the federal appeals court to follow its lead on interpreting Title IX to protect against gender identity discrimination in schools. So far, both the district court and the Fourth Circuit Court of Appeals have listened to the administration, deferring to the federal agency on how best to interpret the regulations that agency publishes. Those rulings have been temporarily put on hold while the Gloucester School Board files its request to have the Roberts Court step in.

This brings us to the conservative Fifth Circuit Court of Appeals and the lawsuit filed by more than 20 states in May arguing that the Obama administration has overstepped its authority on this matter. It’s similar to the argument raised by Gloucester County in the Grimm case and rejected by the Fourth Circuit.

Raising those arguments in the conservative Fifth Circuit, the same federal appeals court that blocked the Obama administration’s executive action on deportations, is a strategic bet by conservatives that they can get a ruling in their favor. Such a ruling would create a likely circuit split, or disagreement, in the appellate courts—which is exactly the kind of situation the Supreme Court is set up to resolve.

Once again, Justice Anthony Kennedy is poised as the swing vote, the justice each side needs to rule in its favor. And while Kennedy has emerged as a moderate but leading voice in the jurisprudential recognition of LGBTQ rights, he has also been critical of some Obama administration agency action. Cases like Grimm’s, or whichever transgender rights case the Court eventually takes up, will present the ultimate test for Kennedy: Which matters more, his desire to see the “dignity” of the LGBTQ community advance in the law, or his distrust of executive authority—even if that executive authority advances LGBTQ dignity?

credo_rewire_vote_3

Vote for Rewire and Help Us Earn Money

Rewire is in the running for a CREDO Mobile grant. More votes for Rewire means more CREDO grant money to support our work. Please take a few seconds to help us out!

VOTE!

Thank you for supporting our work!