Why It’s So Hard to Sue Wal-Mart for Gender Discrimination

A recent decision out of San Francisco shows just how difficult it is to hold large corporations accountable through class-action lawsuits, thanks to the Roberts Court.

A recent decision out of San Francisco shows just how difficult it is to hold large corporations accountable through class-action lawsuits, thanks to the Roberts Court. vvoe / Shutterstock.com

It can take years for the effects of even the big Supreme Court decisions to really take hold. Consider the case of Wal-Mart v. Dukes two years ago, a decision that revoked class-action certification from what would have been one of the largest gender bias lawsuits of its kind. At the time, more than 1.5 million female Wal-Mart workers claimed the retailer unlawfully discriminated against them when it came to their pay and promotions, because of a corporate culture that enabled stereotyping of female workers. The Supreme Court rejected these claims, holding that the women didn’t have enough in common to justify hearing their claims against Wal-Mart together as one case.

Disappointed but undeterred, the women pressed on, determined to bring their claims even if they were narrower. But last week the plaintiffs suffered another setback as a federal judge in San Francisco dismissed a claim by 150,000 of the 1.5 million original plaintiffs on the grounds that while the new proposed class of plaintiffs is definitely smaller than the original class rejected by the Supreme Court, there still isn’t enough proof the women suffered similar treatment to justify hearing their claims all at once. Instead of seeking to press their claims on a nationwide class of workers at Wal-Mart’s 3,400 stores, as the original complaint against the retail giant did, the female workers had asserted that they represented about 150,000 employees in what is called the “California region” of the company—an area made up of three Wal-Mart geographic zones and 250 stores. This new class of plaintiffs sought to represent any female workers who had been on the company payroll between December 26, 1998, and December 31, 2002, and who were subject to pay scales based on hourly rates and on salary levels, and were eligible for promotion to management trainee or area manager.

But this smaller, regional approach was not enough to convince the federal courts to allow the claims to proceed. U.S. District Judge Charles R. Breyer, a Clinton appointee and brother of Supreme Court Justice Stephen Breyer, concluded:

[T]hough they have cut down the raw number of proposed class members significantly, Plaintiffs continue to challenge four different kinds of decisions across hundreds of decision makers, inviting failures of proof at multiple points in each region.

This new, smaller class “continues to suffer from the problems that foreclosed certification of the nationwide class.” Though the workers “insist that they have presented an entirely different case from the one the Supreme Court rejected, in fact it is essentially a scaled-down version of the same case with new labels on old arguments.”

According to Breyer, this new group of plaintiffs failed both in its claim that Wal-Mart pay and promotion practices treated female workers worse than male workers, and its separate claim that those practices had a more negative impact on women than on men. Breyer conceded that the suing employees “had amassed substantial evidence of discrimination against women that occurred at Wal-Mart stores during the period at issue in this suit,” but, thanks to a new standard set by the Supreme Court in the 2011 decision, even this substantial evidence of discrimination was not enough to justify a class-action lawsuit against the retailer.

The problem, however, is that this challenge of proof is largely in the eye of the beholder. When this case first reached the Supreme Court in 2011, the plaintiffs presented statistical evidence suggesting widespread gender discrimination in Wal-Mart’s hiring practices, discrimination that was made possible because of pervasive sex stereotyping in the corporate culture of Wal-Mart. As Justice Ruth Bader Ginsburg explained in her dissent, “Women fill 70 percent of the hourly jobs in the retailer’s stores but make up only 33 percent of management employees,” while “the higher one looks in the organization the lower the percentage of women.” In his opinion last week, District Judge Breyer conceded the record had ample evidence of a discriminatory culture within Wal-Mart, but because the conservative majority on the Roberts Court rejected the use of statistical sampling to prove liability on a class-wide basis, (despite the fact the method had been permitted in other cases) he had no option but to dismiss the smaller, California region of Wal-Mart workers’ claims. Instead, he explained, the Supreme Court’s 2011 decision made it clear that to meet the “commonality” requirement to justify a class action, plaintiffs would still have to offer individualized proof of their claims, proof that is possible to develop only through individual investigations and complaints—proof that the 150,000 plaintiffs still could not produce. In short, the Supreme Court’s 2011 decision created an impossible standard for potential class-action plaintiffs to meet, and the penalty for failing to meet that impossible standard was to lose the ability to bring a class-action claim at all.

In many ways, last week’s decision to toss out the newer class of plaintiffs was inevitable after the Dukes decision, and was just the result the conservative justices were going for. Class-action lawsuits enable groups of individuals with similar legal claims to join together into a single lawsuit and bring their claims as one. Class-action lawsuits are incredibly important tools to hold corporations accountable, especially in cases like the Wal-Mart pay claims where individual damages may not amount to a lot of money but in aggregate do immeasurable damage to workers and the economy. They are also critical in actually holding corporate power accountable. Lawsuits are expensive, and wage claims don’t often add up to enough money for the victim to justify the expense of hiring a lawyer—and virtually no lawyer is willing to take a low-dollar case on a contingency fee basis, because the legal fees will likely outweigh the overall dollar value of the claim. But if each individual claim is counted together as one then suddenly those small claims add up to one very big, very expensive lawsuit for a company like Wal-Mart to defend or settle. The idea is that the threat of class-action lawsuits, both in terms of cost to defend and the risk of a large verdict, is enough to get corporations to change their behaviors and police themselves. Obviously that’s not happening, and thanks to the Supreme Court there’s not a lot workers can do to change that fact.

The district court’s decision leaves the female workers to try to prove their own claims of gender discrimination individually. The plaintiffs could appeal this decision to the Ninth Circuit Court of Appeals, and ultimately to the Supreme Court. But given the Roberts Court’s outright hostility toward workers’ rights, especially the rights of women workers, there’s little reason to think the results would improve.