WASHINGTON — The U.S. Supreme Court's decision last week that a massive class-action gender-bias lawsuit against Wal-Mart Stores cannot go forward could have ramifications for other workplace discrimination lawsuits, legal experts said.
In reversing a lower court's decision that had allowed the class action to proceed, the Supreme Court found that the plaintiffs did not demonstrate that Wal-Mart had companywide policies that were discriminatory, even though the company's policy of leaving personnel matters to store managers' discretion might have resulted in individual cases of discrimination.
“The Supreme Court reasoned that demonstrating the invalidity of one manager's use of discretion ‘will do nothing to demonstrate the invalidity of another's,’” noted attorneys Gerald L. Maatman Jr. and Laura Maechtlen of Seyfarth Shaw LLP in a statement on the firm's website.
The suit, Wal-Mart Stores v. Dukes, was initially filed in 2001 and sought to represent all women who worked for the company's stores since 1998. It was once thought to potentially represent as many as 1.6 million individuals.
The women filing the suit claimed that Wal-Mart's policies allowing local managers to make subjective decisions about pay and promotions resulted in companywide discrimination against women. A Circuit Court had previously ruled narrowly in favor of the plaintiffs, but many observers had expected the Supreme Court's reversal of that decision, according to reports.
The Supreme Court ruled 5-4 in favor of Wal-Mart on the issue of whether the suit could be considered class-action, with the more conservative members siding with Wal-Mart and against the plaintiffs. However, the nine justices were unanimous in their finding that the plaintiffs could not seek back pay as part of the class action.
According to Seyfarth Shaw, “the bar has been raised” for workers in the wake of the Supreme Court decision, making it more challenging for employees to prove that companywide discrimination takes place.
The firm advised employers to take several steps in reviewing their human resources practices in the wake of the suit, including:
•Linking subjective decision-making procedures about performance directly to each position and criteria for performance.
•Ensuring that managers closest to performance are trained to make effective decisions.
•Weigh the possibility of an appeal process for employees who were considered but not selected for promotion.
Wal-Mart cited the court ruling as a vindication.
In a statement, Gisel Ruiz, executive vice president of people at Walmart U.S., said the ruling “pulls the rug out from under the accusations made against Walmart over the last 10 years.”