What does the Supreme Court’s Wal-Mart v. Dukes ruling mean for you?

Whether you are an employee, employer, a human resource representative, executive, small or midsize company or a family owned business, you may be concerned about the impact of the Supreme Court’s Ruling in Wal-Mart.  The Supreme Court decided that it was not willing to certify a class of 1.5 million women asserting gender discrimination in the terms and conditions of their employment.  Patty Dukes is the lead Plaintiff in this lawsuit seeking to certify a class of claimant’s against Wal-Mart.

Class certification is an often debated and litigated matter in a variety of legal areas, including employment matters.  It is possible to certify a class of claimants in the employment context.  The general requirements are commonality, numerosity, typicality and adequacy of class representation.  The Wal-Mart v. Dukes ruling does not foreclose all class actions in the employment context.  Instead, the Court found that class certification was not appropriate in that context, because of the following:

a) There were not enough common questions of fact and law;

b) The claims or defenses were not typical of the class;

c) That there was an insufficient risk of inconsistent standards or ruling among the class of claimants against Wal-Mart;

d) That Wal-Mart has not acted or refused to act based on grounds generally applicable to the class; and

e) The common questions of do not predominate and make a class a superior vehicle for resolving the claims.

Each class certification request has to meet these elements set forth in Federal Rule of Civil Procedure 23 (a) and at least one of the elements in 23 (b).  Classes often allow plaintiffs with smaller damages to pool their claims together to provide an incentive to prosecute the claims. However, often the pooled claims and the fee awards lead to many non-meritorious claims slipping through and intimidating defendants.  Thus, Rule 23 (a) and (b) attempts to balance these competing policy objectives.

The EEOC and many other plaintiffs have been able to meet these class certification elements in a variety of employment contexts.  The Supreme Court merely found that in the Dukes case these elements were not met. However, there were 1.5 million claimants with multiple decision makers, in multiple offices, and a variety of variances in performance of the employees; thus, this Ruling is actually not unusual.  If the claimants were located in the same offices, with the same core group of decision makers, and the employees were in the same positions, the outcome may have been quite different.

In fact, it wouldn’t surprise me, if a number of local or smaller classes were certified at the state level or district court level.  In the end, this may end up being a part of Multi District Litigation Panel.  Nevertheless, Wal-Mart for now can breathe a bit easier for not having to be exposed to 1.5 Million claims, costs and fees of the prevailing party’s attorneys.  Thus, employers, small and mid-size companies and business owners can feel a little more comfortable about managing their employment litigation risk.

However, employees that may be exposed to discrimination by common actors within the same offices, still have the possibility of using a class certification as the vehicle for redressing their claims.  Thus, the Supreme Court’s Ruling in the Dukes case has probably struck the proper balance.  There is a Senate Judiciary committee reviewing the Wal-Mart v. Dukes decision to see if there will be legislative modification, but we will wait to see how this progresses.

In the interim, if you have any concerns or questions about prosecuting, defending or mitigating the litigation risk of class actions in the employment context, then please feel free to contact us.

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