Wouldn’t it be great if there were a single cure for every major problem? Unfortunately, that hardly ever happens.
Cancer is a mass of diseases attacked with medicine, surgery, radiation and other measures. Crime is fought at the local, state, federal and international level with an array of statutes and enforcement agencies. Both are ongoing, long-term battles.
In refusing certification, the Supreme Court’s June 20 ruling in Wal-Mart Stores v. Dukes et. al reminds us that like disease and crime, certain widespread claims of subjective discrimination and other kinds of misdeeds can’t be solved by a single magic bullet—in this instance class-action litigation. While the device has helped eradicate many forms of civil rights injustices, among others, this legal tool has limits. Overall, the Dukes message is less troublesome and more logical than many observers have reported despite the complexity of its legal analysis.
The Dukes plaintiffs sought to represent a class of as many as 1.5 million women who allegedly suffered from sex-based discrimination dating back to 1998 in the area of promotions and transfers. The claims involved separate decisions covering thousands of stores across the United States involving different jobs, decision-makers, and practices spanning at least a 13-year period.
The plaintiffs relied on statistics to make their case bolstered by the testimony of a sociologist who found that Wal-Mart’s locally independent practices coupled with its corporate culture made it vulnerable to gender bias. The plaintiffs also presented statistical evidence as well as affidavits suggesting anecdotal discrimination drawn from 120 persons whose testimony, the Supreme Court stated, represented “about one person for every 12,500 class members” drawn from “235 out of Wal-Mart’s 3,400 stores.”
This is not the same era as the civil rights period of the 1960s and ’70s where companies had blanket policies prohibiting the selection, promotion and/or assignment of African Americans and women, which led to sweeping workplace change. Go back and read the seminal cases of that time involving electricity utilities, telephone companies, manufacturers and airlines, among other employers, and you’ll see segregated workplaces, active systemic discrimination and clear policies and practices unlike anything found today.
These firms’ operations were well-suited for broad-based claims involving hiring, promotion and assignment practices. The classes involved smaller employers and far smaller classes than present in this case. The precedence changed our workplaces for the better. So much for the argument that absent massive actions involving hundreds of thousands or more legal claims can’t have an impact.
Yet discrimination still exists in some form or another in virtually every workplace. On occasion it is blatant, but fortunately such instances are rarer than in the not too distant past. More often, it is less obvious while still pernicious.
Here are some thoughts as we mull over the significance of this long-awaited case.
• The quality of the evidence—the Dukes record presented conclusory and questionably relevant evidence when balanced against the massive apparatus that would have been unleashed had the class been certified. The Supreme Court wisely refused to allow a colossal, unwieldy proceeding to move forward on the basis of thin preliminary proof. A lot more is needed in the way of an identifiable, tangible and common injury before such claims can proceed, particularly in light of the judicial costs and resources they would generate.
• Promotions and transfers, the challenged job actions in Dukes, involve highly individualized decisions. Gender may have come into play along with such considerations as likeability, personal interest in the job, skills, timing, job level, qualifications or other legally protected characteristics. The point is that these are highly unique decisions that couldn’t be looked at the same way as the kinds of old cases noted above tied to more rigid and clear policies and practices.
• Yes, there may be discrimination at Wal-Mart. With a workforce of 2.1 million people worldwide, such allegations come as no surprise. But that doesn’t mean they arise from the same source, set of circumstances or can be resolved by changing a single set of practices or standards. Even the statistical experts presented by the plaintiffs to justify certification could not identify with any apparent confidence whether discrimination affected a small or large percentage of the proposed class. Binding large groups of people on the basis of such thin evidence is not only unwieldy but unfair to Wal-Mart and class members.
• Let’s say the lawsuit had gone to trial as a class action, the plaintiffs won and either the plaintiffs or Wal-Mart chose to challenge one-third of the claims cited in the opinion. That would amount to 500,000 cases. Assume that each had to be investigated and reviewed, taking 20 hours of preparation—a very low number. That would amount to 10 million hours of work excluding negotiations and potential administrative hearings and other activities. Add in an hourly rate for lawyers or support personnel and the cost of trying cases based on such disparate claims makes it clear how unwieldy, unending and confusing the resolution would have been. And, by the way, multiply whatever number you arrived at by a factor of three or four to get a truer estimate of what this all would have likely cost in terms of time and expense for all parties.
• Nothing will prevent plaintiffs’ lawyers across the United States from launching individual or class actions that are more manageable and have the potential for greater impact. Such cases would be easier to try, quicker to resolve and capable of addressing specific problems with lasting solutions. That’s what we saw in smaller, earlier class actions. Some say those cases can’t be economically prosecuted. This argument makes no sense. Scores of cases that would be profitable to plaintiff’s lawyers could be sculpted out of the Wal-Mart workforce. For Wal-Mart, defending them would be expensive, generate unfavorable publicity and do long-term damage to their brand. My guess is that Wal-Mart is working hard to avoid those risks.
Stephen Paskoff is president and CEO of Atlanta-based ELI Inc., a provider of ethics and compliance learning solutions. He can be contacted at info@eliinc.com.
