WASHINGTON, April 3 (UPI) — A class action suit that may include as many as 1.5 million women who claim sex discrimination on the job by Walmart is the biggest in U.S. history — though there are signs it won’t remain so for much longer.
The class action already has been approved by a federal judge and a federal appeals court, but it took a beating during argument at the U.S. Supreme Court last week.
Some analysts had said if the high court even accepted the case for review, instead of letting the lower-court verdict stand, it would be a sign that the 5-4 conservative majority wanted to strike the class certification.
Professor Deborah Hensler of Stanford Law School told the Chicago Tribune last year, “If the Supreme Court takes this case, it will signal this business-friendly court is hostile to class actions against corporate defendants.”
“This is the big one that will set the standards for all other class actions,” Robin S. Conrad, executive vice president of the National Chamber Litigation Center, an agency of the U.S. Chamber of Commerce, told The New York Times. The center filed several friend of the court briefs supporting Walmart at the Supreme Court.
The implication is that Walmart, headquartered in Bentonville, Ark., and one of the world’s largest corporations, is just too big to be the target of a class action.
The company tried to emphasize the massive nature of the class in its petition to the Supreme Court asking for review.
“This nationwide class includes every woman employed for any period of time over the past decade, in any of Walmart’s approximately 3,400 separately managed stores, 41 regions and 400 districts, and who held positions in any of approximately 53 departments and 170 different job classifications,” the company’s petition said. “The millions of class members collectively seek billions of dollars in monetary relief under Title VII of the Civil Rights Act of 1964, claiming that tens of thousands of Walmart managers inflicted monetary injury on each and every individual class member in the same manner by intentionally discriminating against them because of their sex, in violation of the company’s express anti-discrimination policy.”
The Supreme Court review does not involve the merits of the suit — whether Walmart is guilty of discrimination against women — but whether the enormous class action, driven by statistics, should be allowed to proceed or whether the women must sue individually or in small groups.
The case started in 2001 in San Francisco when six women filed suit claiming Walmart discrimination, in part because they were passed over for promotion in favor of men. One of the six says she was told, “It’s a man’s world.”
Washington attorney Joseph Sellers, who argued for the women before the Supreme Court last week, told United Press International last year, “There’s a substantial body of evidence that comes from Walmart’s own workforce data,” including “very sophisticated analysis” to show what company policy was. Despite the size of the class, Walmart can use that evidence in an attempt to show that there was no company-wide discrimination, just as plaintiffs can use the same evidence to show there was, he said.
“We have evidence that there is a culture at the company that condones or says women are second-class citizens,” Sellers said, some of it surfacing at managers’ meetings at strip clubs or at Hooters restaurants.
Sellers had to think fast on his feet last Tuesday — ironically during Women’s History Month — as justice after justice tried to shred his argument from the bench.
Four of the court’s five-member conservative majority — Chief Justice John Roberts and Justices Anthony Kennedy, Antonin Scalia and Samuel Alito — were expected to give Sellers a tough time, with Justice Clarence Thomas asking no questions, as is his custom.
The four-member liberal bloc was expected to give him help. The female members of the court, Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan did their best to steer the argument in favor of the class action. Ginsburg argued the concept of gender discrimination into law in a series of brilliant cases in the 1970s.
But the fourth member of the bloc, Justice Stephen Breyer, barely spoke Tuesday, and kept his cards close to his vest.
The time allotted for Walmart’s lawyer, Los Angeles attorney Theodore Boutrous Jr., was relatively calm except for pointed questions from the women, but Sellers got a grilling.
Roberts was the first to strike, asking Sellers, “Is it true that Walmart’s pay disparity across the company was less than the national average” for similar retailers?
“I don’t know that that’s a fair comparison,” Sellers replied, adding Walmart was making that comparison “with the general population, not with people in retail.”
Kennedy was more acerbic. “It’s not clear to me: What is the unlawful policy that Walmart has adopted,” he asked Sellers, “under your theory of the case?”
“Justice Kennedy, our theory is that Walmart provided to its managers unchecked discretion,” Sellers said, with women getting fewer opportunities and less pay even with more seniority and higher performance reviews.
“Your complaint faces in two directions,” Kennedy said from the bench. “No. 1, you said this is a culture where … the headquarters knows everything that’s going on. Then in the next breath, you say, well, now these supervisors have too much discretion. It seems to me there’s an inconsistency there, and I’m just not sure what the (alleged) unlawful policy is.”
“There is no inconsistency any more than it’s inconsistent within Walmart’s own personnel procedures,” Sellers replied. A federal judge “found specific features of the pay and promotion process that are totally discretionary. There’s no guidance whatsoever about how to make those decisions. … But the company also has a very strong corporate culture … what they call the ‘Walmart way,’ and the purpose of that is to ensure that in these various stores that, contrary to what Walmart argues, that these are wholly independent facilities, that the decisions of the managers will be informed by the values the company provides to these managers in training.”
“Well, is that disparate treatment?,” Kennedy asked. “Disparate” or unequal treatment is a necessary element for discrimination.
“It is disparate treatment,” Sellers insisted. “It is a form of disparate treatment because they are making these decisions because of sex.”
Scalia echoed Kennedy.
“I’m getting whipsawed here,” he said. “On the one hand, you say the problem is that (local managers) were utterly subjective, and on the other hand you say there is … a strong corporate culture that guides all of this. Well, which is it? It’s either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do.”
Sellers replied that managers have broad discretion, but don’t make their decisions in a vacuum.
Scalia kept charging ahead.
“What do you know about … the unchallenged fact that the central company had a policy, an announced policy, against sex discrimination,” he asked, “so that it wasn’t totally subjective at the managerial level? It was, ‘You make these hiring decisions, but you do not make them on the basis of sex.’ Wasn’t that the central policy of the company?”
“That was a written policy,” Sellers said. “That was not the policy that was effectively communicated to the managers.”
Post-mortem evaluations of the argument were almost uniformly pessimistic for the class’s survival.
Lyle Denniston, dean emeritus of the Supreme Court press corps, wrote on SCOTUSBLOG.com that it took only a few minutes of argument “for a potentially fatal flaw … to stand out boldly.”
The basic claim in the suit is that Walmart maintains a common culture — “the Walmart Way” — to ensure uniformity in its 3,400 stores, Denniston wrote, but the corporate headquarters gives local store managers unlimited discretion to decide pay and promotions — resulting in lower pay and fewer promotions for women.
Kennedy’s point was those factors may seem contradictory.
But for a class action to survive under the Federal Rules of Civil Procedure, “the legal and factual issues must share commonality” at a minimum, Denniston wrote. Much of last week’s argument focused on that key requirement.
In the Los Angeles Times, an article partly written by veteran Supreme Court correspondent David Savage said the statistics may support the women. Lawyers say two-thirds of Walmart’s employees were women though men made up 86 percent of store managers when the stats were gathered five years ago.
But the article said “the tenor of Tuesday’s argument suggested that the massive, decade-old suit may run aground before it can move toward a trial.”
The Times said even though the male conservative justices were more aggressively negative, all of the justices expressed at least some reservations.
The justices should rule before the summer recess.
Bottom line from UPI: Justices could certainly change their minds, but based on their behavior during argument, look for the class to be struck down by at least a 5-4 vote, and a larger margin, 6-3 or 7-2 or more, is certainly within the realm of possibility.