Court sides with Walmart on sex-bias suitHowie Erichson in San Francisco Chronicle, June 21, 2011
Bob Egelko, Chronicle Staff Writer
In a ruling that raises new barriers to class action lawsuits against large nationwide companies, the U.S. Supreme Court derailed a sexual discrimination suit against Wal-Mart on Monday by more than 1 million female employees, saying the female plaintiffs failed to show that any of the retail giant's policies had denied them equal pay and promotions.
The justices unanimously overruled federal courts in San Francisco that had allowed all women who worked for Wal-Mart since December 1998 to join in a single nationwide suit seeking back pay. But on the most critical issues in the case, a five-member majority led by Justice Antonin Scalia set tough new standards for future suits:
-- A company that allows local managers to decide pay and promotions can't be held responsible for sex-based corporate disparities unless they can be tied to some company-wide practice that amounts to "a general policy of discrimination."
-- A company whose policies denied women equal pay would be entitled to individual hearings on the amount due to each worker. An appeals court would have allowed hearings for a sample group of employees to determine back pay for the entire class, an approach that would save time and money but, Scalia said, would be unfair to the company.
The court did not address the merits of the plaintiffs' claims that female Wal-Mart employees were paid less than men in every region and were under-represented at every level of management.
Plaintiffs' lawyers said the women would continue to pursue those claims on multiple fronts, in thousands of discrimination claims with the U.S. Equal Employment Opportunity Commission as well as individual lawsuits, and possibly class actions for individual stores or regions. But they painted a grim picture of the ruling's impact.
"It gives life to the view that some companies may be too big to sue," said Joseph Sellers, who argued the women's case before the Supreme Court.
Several legal commentators disputed that assessment. The ruling doesn't foreclose such suits against big corporations, said Howie Erichson, a Fordham Law School professor who specializes in class-action law. But he said it comes from a court that "takes a narrow view of when class actions should be permitted."
The court had tightened rules on class actions in an April ruling, also by Scalia, that upheld an AT&T policy of requiring customers to arbitrate fee disputes individually.
Wal-Mart, the nation's largest retailer with 3,400 stores and over 1 million employees, issued a statement emphasizing its "long history of providing advancement opportunities for our female associates."
"As the majority made clear," the company said, "the plaintiffs' claims were worlds away from showing a company-wide discriminatory pay and promotion policy."
The U.S. Chamber of Commerce and other business groups applauded the ruling. The Pacific Legal Foundation in Sacramento said the court, by rejecting "a costly and unjustified litigation threat," made possible "lower prices for things we need, and ore employment opportunities for all - especially women.'