Decision in Wal-Mart case a blow to class actions

[June 21, 2011]  WASHINGTON (AP) -- Mounting a large-scale bias claim against a huge company will be more difficult in light of a Supreme Court decision that found no convincing proof of discrimination on which to allow a class action against retail giant Wal-Mart on behalf of as many as 1.6 million women.

All the justices agreed in the decision released Monday that the case couldn't proceed as a class action in its current form, reversing a decision by the 9th U.S. Circuit Court of Appeals in San Francisco. By a 5-4 vote along ideological lines, the court also said there were too many women in too many jobs at Wal-Mart to wrap into one lawsuit.

While individuals could still pursue their own cases, they would continue with the prospect of costly legal fees and long time frames and ultimately lack the power that would have accompanied the largest sex-discrimination lawsuit in U.S. history.

Two of the named plaintiffs, Christine Kwapnoski and Betty Dukes, vowed to continue their fight, even as they expressed disappointment about the ruling.

"We still are determined to go forward to present our case in court. We believe we will prevail there," said Dukes, a greeter at the Wal-Mart in Pittsburg, Calif.

"All I have to say is when I go back to work tomorrow, I'm going to let them know we are still fighting," said Kwapnoski, an assistant manager at a Sam's Club in Concord, Calif. Both women spoke on a conference call with reporters.

The women's lawyers said they were considering filing thousands of discrimination claims against Wal-Mart, but they acknowledged that the court had dealt a fatal blow to their initial plan.

In a statement, Wal-Mart said, "The court today unanimously rejected class certification and, as the majority made clear, the plaintiffs' claims were worlds away from showing a companywide discriminatory pay and promotion policy."

Those with opposing perspectives of the merits of the case agreed that companies came out ahead with the decision. Companies as varied as the Wall Street firm Goldman-Sachs & Co., electronics giant Toshiba America Inc. and Cigna Healthcare Inc. also face class-action claims from women they employ.

"This is an extremely important victory not just for Wal-Mart, but for all companies that do business in the United States," said Theodore Boutrous Jr., Wal-Mart's lawyer. The U.S. Chamber of Commerce said the court had set a high bar in ruling that "mega-class actions such as this one are completely inconsistent with federal law."

Marcia D. Greenberger, co-president of the National Women's Law Center, said, "The court has told employers that they can rest easy, knowing that the bigger and more powerful they are, the less likely their employees will be able to join together to secure their rights."

In his majority opinion, Justice Antonin Scalia wrote, "Because respondents provide no convincing proof of a companywide discriminatory pay and promotion policy, we have concluded that they have not established the existence of any common question."

With 2.1 million workers in more than 8,000 stores worldwide, Wal-Mart could have faced billions of dollars in damages if it had had to answer claims by the huge group of women.

The high court's majority agreed with Wal-Mart's argument that being forced to defend the treatment of female employees regardless of the jobs they hold or where they work is unfair.

Scalia said there needed to be common elements tying together "literally millions of employment decisions at once." He said that in the lawsuit against the nation's largest private employer, "that is entirely absent here."

Justice Ruth Bader Ginsburg, writing for the court's four liberal justices, said there was more than enough to unite the claims.

"Wal-Mart's delegation of discretion over pay and promotions is a policy uniform throughout all stores," Ginsburg said. The other women on the court, Justices Elena Kagan and Sonia Sotomayor, and Justice Stephen Breyer joined Ginsburg's opinion.

House Democratic leader Nancy Pelosi and other congressional Democrats criticized the ruling and called on Congress to pass the Paycheck Fairness Act to reduce wage disparities between men and women.

"Today's ruling underscores the need to act boldly and strongly on behalf of women's rights," Pelosi said.

Business interests, including nearly two dozen large companies, lined up with Wal-Mart, while civil rights, women's and consumer groups sided with the women plaintiffs.

Both sides painted the case as extremely consequential. The business community said that a ruling for the women would lead to a flood of class-action lawsuits based on vague evidence. Supporters of the women suggested a decision in favor of Wal-Mart could remove a valuable weapon for fighting all sorts of discrimination.

Said Greenberger: "The women of Wal-Mart, together with women everywhere, will now face a far steeper road to challenge and correct pay and other forms of discrimination in the workplace."

The Wal-Mart lawsuit, citing what are now dated figures from 2001, said that women are grossly underrepresented among managers, holding just 14 percent of store manager positions compared with more than 80 percent of lower-ranking supervisory jobs that are paid by the hour. Wal-Mart responded that women in its retail stores made up two-thirds of all employees and two-thirds of all managers in 2001.

The company also has said its policies prohibit discrimination and that it has taken steps since the suit was filed to address problems, including posting job openings electronically.

[Associated Press; By MARK SHERMAN]

Follow Mark Sherman on Twitter at www.twitter.com/shermancourt.

Associated Press writer Anne D'Innocenzio in New York contributed to this report.

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