All along the legal pundits have said that the outcome of Wal-Mart Stores Inc. v. Dukes would be hugely important to business in America. Now that we know the outcome, we can start to judge for ourselves.
In essence, the U.S. Supreme Court has decided that there can be no class-action lawsuit originally filed by six women claiming gender discrimination against the retail giant. The Court ruled 5-4 that the plaintiffs had failed to show “significant proof that Wal-Mart operated under a general policy of discrimination,” Justice Antonin Scalia wrote. “That is entirely absent here.”
Why did the Supreme Court shoot down the lawsuit? In short: the case was too big.
The plaintiffs claimed separate instances of being mistreated, demoted and/or terminated, while male employees, who allegedly made more money, suffered no such treatment.
But the issue that the Supreme Court considered was whether or not the case qualified as a class-action lawsuit. Had it qualified, it could have involved as many as 1.6 million women and would certainly have been the largest employment-related class-action suit in U.S. history.
There was simply no way to verify that hundreds of thousands of other potential employees would be able to make the same claims, and show the same harm for the same reasons, as the original named plaintiffs.
Since Walmart leaves some discretion on decisions regarding hiring, firing, promotions and pay to its thousands of individual managers, there needed to be a general, central policy that could reasonably have influenced these managers to discriminate. In this case, as court documents point out, the central document was Walmart’s published policies forbidding gender discrimination.
“We were pleased to be able to show the Court that Walmart had a strong non-discrimination policy in place well before the lawsuit was filed, and to illustrate the other flaws in the plaintiffs’ theories,” Gisel Ruiz, Executive Vice President, People, Walmart U.S. said in a statement.
What this means is that thanks to Wal-Mart Stores Inc. v. Dukes, the bar becomes significantly higher for large groups of employees to successfully file class-action lawsuits. If you have a company-wide policy forbidding gender discrimination, for example, it’s much more unlikely that anyone will be able to sue you across all of your branches.
Every employee will need to show that the bias was targeted specifically at them, that they each experienced the exact same form of bias and that there’s “glue” holding all of their claims together.
“The Supreme Court has ruled against all women of a poor background in this country,” said Betty Dukes, one of the original plaintiffs, in a post on Forbes.com.
The Court’s decision doesn’t mean that Walmart – the largest private employer in the U.S. – does not discriminate against women.
In fact, the evidence brought against Walmart included a sociologist who asserted that Walmart’s corporate culture made it vulnerable to gender bias – although that was not enough to prove commonality across the entire company, according to the Court.
The plaintiffs will likely now pursue their claims individually or as part of much smaller classes.
But there will be no multi-billion-dollar judgment in Walmart’s future.