In one of the most closely watched cases on the US supreme court docket, the court has heard oral argument in the largest American employment class action litigation ever. Betty Dukes, representing millions of Walmart female employees, filed suit in 2001 alleging that Walmart engaged in a discriminatory pay and promotion practices. The women sued for backpay and an injunction requiring the company to change its practices. The class includes between 500,000 and 1.5 million current and former female employees.
How the justices resolve the case will have significant impact. The litigation pits millions of female employees alleging company-wide, gender-based discrimination against the country's largest retail establishment. Whether the supreme court upholds this class certification is being closely watched by not only female employees, but by corporate America, which is concerned that if the class certification is upheld, almost every large American corporation would be vulnerable to sweeping allegations of employment discrimination based on generalised theories of discriminatory corporate culture and subjective local decisions.
The class action device permits millions of allegedly injured people to "aggregate" their claims in one representative litigation. The American class action rule has been in existence since 1938, but the procedure took its modern form through a rule revision in 1966. If a court approves or certifies a class action – as the California courts did – only the individual class representatives' claims (such as Dukes's case) would be tried to a jury. In the Walmart case, there are only three women who are class representatives; a court would not individually adjudicate the millions of other women's claims. In addition, the women's attorney proposed that each woman's damages could be determined through a mathematical formula, rather than by examining individual work records.
American class action litigation has always been a controversial means for pursuing group relief. Indeed, most civil law countries have historically rejected it – the UK, for example, has a very limited means for aggregating claims, known as a "group action". However, in recent years, the idea of an American-style class action has gained traction in some European countries.
Advocates in favour of class action view it as a means to empower large number of injured victims whose claims have comparatively little value. Such victims most likely would not be able to hire a lawyer, because attorneys have little interest in representing individuals with small claims. In this vein, the Walmart women's attorney argued that a class action was appropriate because each woman's claim was probably worth no more than $1,100. Without a class action, millions of Walmart employees would not be able to recover on their discrimination claims. In contrast, large corporations that are sued view this as a means to coerce them into enormous settlements without providing fair trials on individual claims. Several prominent American appellate courts have suggested that when a court certifies a class action to proceed to trial, this decision amounts to "settlement blackmail". Corporate defendants maintain it denies them their rights to examine, challenge and defend against the individual claims of class members.
With over 3,400 stores, Walmart is America's largest private employer. Women comprise over 80% of workers and hold only one-third of managerial store management jobs. Walmart has a company-wide policy that bars workplace discrimination based on sex. Notwithstanding this policy, individual Walmart store managers have substantial discretion in making salary and promotion decisions in each individual store.
The women complained that they had been subjected to an array of discriminatory actions, including denial of management training, retaliation for initiating internal grievance procedures, failure to promote, harassment and denial of equal pay. The complaint alleged that Walmart "fosters or facilitates gender stereotyping and discrimination … and that this discrimination is common to all women who work or have worked in Walmart stores". California federal courts granted and upheld class certification, which is a green light to proceed to trial. Walmart asked the supreme court for review, arguing that the litigation should not to go forward as a massive class action.
It is important to understand what the supreme court will not be deciding. It will not address whether the women employees have legitimate claims, whether Walmart engaged in discrimination, or whether either side should win. Instead, the court will evaluate whether the proposed litigation satisfied the requirements to go forward as a large class action. In order for a court to permit this, the court must be satisfied that the Walmart female employees share common legal or factual questions about their claims. In addition, the women's claims must be typical of all the women in the lawsuit, and they must be adequately represented.
Walmart argued that lower courts' liberal application of class certification requirements was inappropriate where hundreds of thousands of individualised employment decisions were involved. Therefore, the women's claims did not share common facts and were not typical of each other. The company argued that the class action effectively denied the corporation's right to present evidence concerning how individual women were treated with regard to promotion or pay decisions. In particular, it also objected it was unfair to determine possible backpay awards based on a mathematical formula.
Women's groups, on the other hand, are concerned that the court may seize the Walmart appeal as a platform for tightening class certification requirements in employment discrimination cases, thereby increasing the difficulty for female employees to seek recovery. Thus, if the court reverses class certification, the Walmart case could signal a significant regression in women's rights in the workplace.