The Supreme Court recently reversed the certification of a nationwide class action claim against Wal-Mart. The gender discrimination suit represented 1.5 million past and present female employees. It alleged that the women were denied pay and promotions under a corporate-wide "policy" of sex discrimination. This decision has made headlines and has left many employers in Colorado and all over the U.S. wondering what the decision really means for them.
According to the Supreme Court, the certification was reversed because the suit lacked "commonality." The Justices felt that the suit covered too many women who had a range of experiences that was too broad. The Justices also felt that the women's concerns would be better served by multiple lawsuits that represent the interests of smaller groups of women rather than one large suit. The key arguments made by the plaintiffs were not declared invalid by the Supreme Court's ruling, but it does cast doubt on whether class action suits like this are a suitable way for employees to settle grievances with employers.
The decision will be helpful to Colorado employers who are sued in federal court class action lawsuits for alleged discriminatory employment practices. It means that class actions alleging that a business violated employment law must be tied in to a very specific policy or practice. It may be that the best defense an employer has against a class action lawsuit is to establish a company police that directs higher-level employees to comply with the law. That way, if the business is sued by an employee for discrimination, the liability does not lie with the business but rather with the person who did not follow the law.
Source: The New York Times, "Hostility Toward Working Women," Melissa Hart, 21 June 2011.