Epilogue: Dukes v. Wal-Mart

The dust is still settling after the U.S. Supreme Court handed down its decision in the Dukes v. Wal-Mart case. In its decision, the Court held that 1.5 million women could not be certified as a class against the retailer.

Federal Civil Procedure Rule 23(a) requires  that any party seeking class action certification must demonstrate that:

“(1) the class is so numerous that joinder of all members is impracticable,“(2) there are questions of law or fact common to the class, “(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and “(4) the representative parties will fairly and adequately protect the interests of the class”

In the Dukes case, the lower district (trial) and appellate courts found that the evidence marshaled by the plaintiffs were indeed sufficient to allow certifying the 1.5 million female Wal-Mart employees as a class under the rules.

The evidence used to persuade the lower courts included statistical data that suggested differences in pay between men and women, anecdotal testimony from witnesses who alleged gender-based discrimination, and the social framework analysis of the plaintiff’s expert sociology witness. The social framework analysis was discussed in greater depth in a prior post on this blog.

The U.S. Supreme Court, however, held that this evidence was insufficient to meet the commonality requirement of Federal Rule 23(a). Under the Court’s analysis of relevant precedent, the Court required evidence of a systematic practice, or corporate policy that would trigger a legal issue common to all  1.5 million women in the class. The only evidence that the Court found addressed this requirement was the social framework analysis offered by the plaintiff’s expert, Dr. William Bielby. The Supreme Court, however, found the use of a social framework analysis was insufficient to demonstrate typicality. The Court said:

“Relying on “social framework” analysis, Bielby testified that Wal-Mart has a “strong corporate culture,” that makes it “‘vulnerable’” to “gender bias.” He could not, however, “determine with any specificity how regularly stereotypes play a meaningful role in employment decisions at Wal-Mart.” …

“The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal-Mart’s “policy” of allowing discretion by local supervisors over employment matters. On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices.”

The Court then discussed that the typicality requirement is a threshold issue that can impact the results of statistics that suggest gender based discrimination.

As a practical matter, it is unlikely that any plaintiffs will be able to certify a nationwide class against a major corporation in discrimination cases unless the plaintiffs can show with sufficient evidence that typicality of harm or injury arises from pervasive managerial behavior, such as an identifiable corporate policy, or from observable and uniform practice.

On the other hand, broad and unidentifiable factors, such as tacit managerially sanctioned social norms, are not likely to satisfy the typicality requirement. In the Dukes case, the Supreme Court disregarded the theory that something as real, yet broadly conceived, as corporate culture can be used to legally establish typicality.

As discussed in the Court opinion’s syllabus:

“Respondents’ only evidence of a general discrimination policy was a sociologist’s analysis asserting that Wal-Mart’s corporate culture made it vulnerable to gender bias. But because he could not estimate what percent of Wal-Mart employment decisions might be determined by stereotypical thinking, his testimony was worlds away from “significant proof” that Wal-Mart “operated under a general policy of discrimination.”

So, even if there is some indication of a corporate culture and statistical evidence pointing to a gender-based pay gap, the courts are likely to require  direct evidence of an actual company practice that fosters the discrimination.

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