The U.S. Supreme Court yesterday agreed to review whether more than a million current and former female employees who have worked at Walmart stores since 1998 are entitled to proceed with a massive class-action lawsuit charging sex discrimination by America's largest retailer.
Yesterday's decision does not mean the Supreme Court will actually decide the merits of the case, which has been winding its way through the courts since it was first filed by six women in 2001. It will only decide whether to handle the massive lawsuit as a class action.
If the Supreme Court allows a case of this magnitude to go through as a class action, the ruling could likely open the floodgates for future "jumbo" class actions—a development that could have major implications for corporate America, says Bob Gregg, a partner in Boardman Law Firm and a regular contributor to DiversityInc. In order to have a class, you have to have commonality, a strong thread of common fact and law that applies to the individual claims, he says.
In August, Walmart filed a motion with the high court to toss out what could go down as the largest employment class-action suit in U.S. history, encompassing as many as 1.5 million former and current women employees, if allowed to proceed.
The plaintiffs allege women were paid less and were given fewer opportunities for promotion than their male counterparts. They seek back pay and punitive damage that could amount to billions of dollars.
In its petition for Supreme Court review filed in August, Walmart argued that "the class is larger than the active-duty personnel in the Army, Navy, Air Force, Marines and Coast Guard combined—making it the largest employment class action in history by several orders of magnitude."
In April, an 11-member panel of the U.S. Court of Appeals for the Ninth Circuit in San Francisco ruled by a 6-to-5 vote that the class action could go forward, stating that just because more than 1 million employees are potentially involved doesn't necessarily "render [the] case unmanageable."
Walmart has long argued that the case is unsuitable for class treatment, since each employee's claim involves individual factual issues that can't be applied to the case as a whole.
In a prepared statement on its website yesterday, Walmart said: "We are pleased that the Supreme Court has granted review in this important case. The current confusion in class action law is harmful for everyone—employers, employees, businesses of all types and sizes, and the civil justice system. These are exceedingly important issues that reach far beyond this particular case. We look forward to the Court's consideration of the appeal."
"This is a huge class action and it covers so many people, issues and places, and if [the Supreme Court] says yes, this is OK, we think it's valid, it is essentially saying you can lump multiple sorts of issues into one class action and go after them," Gregg says.
In recent years, the federal circuit courts have been split on the exact legal and factual standards to apply for class actions of this type, one big reason why the Supreme Court has decided to weigh in on the matter, says John M. Bryson II, a partner in Washington, D.C., law firm Jackson Lewis. Bryson is a partner along with Weldon Latham, who frequently contributes to DiversityInc.
"The Supreme Court prefers to reconcile these conflicts by coming out with a uniform rule," Bryson says. "A strong case can be made on both sides as to … whether class certification is appropriate."
Bryson noted that even though the Ninth Circuit Court of Appeals narrowly certified the Walmart case as a class action in April, the judges were sharply divided in their 6-5 ruling.
"When you have an Appellate Court with 11 judges reading the same facts and the same laws and splitting that sharply, it shows you that this is a hotly contested matter that could go either way," he said.
The original case, Duke v. Wal-Mart, is named after a 54-year-old "greeter" from California, Betty Duke, who was hired to work for Walmart in 1994. In the original lawsuit, Duke, who still works for Walmart, along with five other women employees alleged the retailer systematically paid women less money than men for doing the same jobs and promoted men to higher positions at a faster rate, in violation of Title VII of the Civil Rights Act of 1964.
Attorneys for the plaintiffs said yesterday they "welcome the U.S. Supreme Court's limited review of the sex-discrimination case and are confident that the Court will agree that the women of Walmart are entitled to their day in court."
"After 10 years of litigation, we are eager to have the Court finally resolve the procedural issues that Walmart has raised in its effort to delay the trial of this case," said the plaintiffs' lead counsel Brad Seligman of the Impact Fund in Berkeley, Calif.