The Diminishing Class Action

In 2000, Betty Dukes began a sex discrimination claim against Wal-Mart that grew to encompass 1.5 million current and former female employees of the store.  The claim alleges that Wal-Mart systematically pays females less than males and provides fewer opportunities for promotion.  In 2010, the 9th Circuit Court of Appeals approved the class action certification, which would have granted back pay to all female employees and provided an injunction against Wal-Mart’s discriminatory practices if Dukes ultimately won.  Fast-forward to June 2011 and the US Supreme Court denies the class action claim.

 

If you are not a fan of class actions, this decision is good.  If you are, there are going to be a lot more headaches coming your way.

 

Whatever your opinion on class actions, they have been a useful tool for employees challenging potential unfair practices by big business.  The class action has worked as a check on employers, assuring equal and fair practices.  Regardless of whether the class action ultimately amounts to anything; it is a newsmaker that companies want to avoid.

 

In this case, the Supreme Court effectively ruled that the women employees did not have enough in common to be a class.  The majority declared that there were too many variables and too much discretion granted to managers for Wal-Mart to discriminate against women the same way across the board.  The minority opinion found that the majority looked far too closely at the differences and not at what united the female employees of the class.

 

Until this decision, members of a potential class have had to show that they were numerous, had questions of law or fact in common, and had representatives with typical claims who would protect the interests of the class.  Dukes seemed to have all of this covered when the suit began.  The majority opinion has now raised the bar for class actions.

 

Class actions will still be used, but from now on, they will be much harder to bring.  As a general rule, this decision is good for business and promoting economic growth.  Yet, in terms of individual equality, it could have severe ramifications.  The Court has gambled that such an issue will not be a big problem.  Let’s hope it isn’t.


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