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.

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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.

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