Wal-Mart v. Women

April 12, 2011 by

The Supreme Court recently heard argument in the employment discrimination lawsuit against Wal-Mart that I have written about before on this blog.  It is the largest in American history.  Wal-Mart is also one of the largest private employers in American history.  If the Supreme Court rejects this suit, it will send a chilling message that some companies are too big to be held accountable.

The case began in 1999 after Stephanie Odle was fired when she complained of sex discrimination. As Ms. Odle recounted in sworn testimony, as an assistant manager she discovered that a male employee with the same title and less experience was making $10,000 a year more than her.

She complained to her boss, who defended the disparity by saying the male had a family to support. When she replied that she was having a baby that she needed to support, the supervisor made her provide a personal budget and then gave her a raise closing just one-fifth the gap.  The plaintiffs who have brought a class action on behalf of 1.5 million current and former female Wal-Mart employees allege that they, too, faced discrimination in pay and promotion. If Wal-Mart loses, it could owe more than $1 billion in back pay.

There are two possible ways that these women’s claims could be resolved.  The first way would be for each individual woman to bring her own independent lawsuit.  Of course, there are two significant problems with that approach:  First, the courts could be overwhelmed with lawsuits, all making similar arguments; second, many women who work at Wal-Mart probably cannot afford to hire an attorney to sue a corporate giant with an in-house legal department and the funds to pay as many lawyers as necessary.

This is why Congress created class actions.  It is a legal device that would join all of the women together into one lawsuit brought by one set of lawyers who would eventually be paid out of any money that the women receives; after the lawyers are paid, the women would each get their share of the rest.  Also, any potential plaintiff is free to “opt out” of the class, meaning that she could choose to bring her own suit if she so desired.

It would seem like the class action is the obvious way to go for both sides.  The women do not have to figure out how to make their own individual claims, and the company doesn’t have to spend years defending against them all.

But here’s the thing:  Wal-Mart knows that if the case doesn’t go forward as a class action, there is a good chance that it will never have to defend against most of the individual claims, for exactly the reasons we just discussed.

Wal-Mart’s strategy, then?  Try to convince the courts that the case is not appropriate for a class action and that therefore the class of women should not be “certified.”  There are legal requirements that govern when a class action is appropriate.  Those rules give Wal-Mart ammunition, because the company can argue that the plaintiffs as a group do not meet those requirements.  In this case, Wal-Mart’s central argument is that class certification is not appropriate because the women’s claims do not have enough in common.  A federal trial judge said they do. The United States Court of Appeals for the Ninth Circuit upheld that ruling, twice.

Wal-Mart says that the class is too big, so big that it is impossible for all of the women in the class to have the same kinds of claims.  Because a court, in deciding the class claim, would not be addressing each individual woman’s damages head-on, each woman should bring her own case.  The women disagree, saying that although they worked at different stores across the country, they suffered the same kinds of harms, harms that stemmed from corporate policy.

As you’ve probably read in the news, the oral argument did not seem to go well for the women plaintiffs.  Several Justices asked questions that seemed designed to highlight the differences among the potential members of the class and their claims.  While the Court probably will not issue its decision until sometime in June, some suggest that it seems likely that it might hold that the women may not form one large class to bring their case.  However, the court could rule that several smaller classes are the way to go.

If the court has doubts about whether the class is cohesive or manageable enough, it should ask the trial judge to explore whether there is a single class or more than one — say, salaried female employees and hourly employees or female store managers and other kinds of employees. That would be much fairer than dismissing the case and insisting that 1.5 million women fend for themselves.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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