It’s been in all the newspapers – the United States Supreme Court has agreed to decide a key issue in a sex discrimination lawsuit potentially affecting 1.5 million former and current female Wal-Mart employees. While the media blitz has focused on how large the class is, many legal experts do not expect the Supreme Court to address that issue. Instead, they anticipate that the justices want to focus on whether claims for monetary damages can be certified for class action status using the federal procedural standards applicable to class claims for injunctive and non-monetary remedies. These standards have typically been easier to meet than those that have been applied to wage-based claims.
The lower court decision by the Ninth Circuit Court of Appeals in California is believed to have forged a new standard for wage-based class claims that the other federal appeals courts have not followed. The Supreme Court often seeks to resolve interpretive differences between the various appellate courts, and this issue seems particularly worthy of their attention since the Ninth Circuit case was decided by a 6-5 vote. By ruling one way or the other, the Supreme Court may clear up the confusion over which standard is to be applied.
The Supreme Court also wants to address how the ordinary threshold requirements for a class action are applied in this case. Typically, class actions require a sufficiently large group of litigants with similar claims in order to justify treating the litigants as one big class. In this instance, the Supreme Court will want to examine whether the use of subjective decision-making policies supports a class type of claim. Wal-Mart has argued that it does not since store managers at their almost 3,400 United States stores make individualized hiring and promotional decisions that have to be decided on their unique facts. In other words, there is no overriding policy or practice being applied – just localized decisions seeking to distinguish between small groups of candidates for particular jobs.
Bottom Line
The eventual decision could have momentous consequences. A decision in favor of the applicants and employees could pave the way for many more wage-based class actions in the courts. On the other hand, a decision for Wal-Mart could signal the end of this litigation for the company, and the death knell for wage-based class action cases in general.