How will US Supreme Court rule in Dukes v. Wal-Mart?

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While we are glued to our TV’s awaiting the outcome of the state budget there is a major employer who is facing a sex discrimination/class action lawsuit where the US Supreme Court will hear oral arguments next week. I refer to Dukes v. Wal-Mart, brought by six women, a day in court that has been lingering for the past decade.

Following text is from Nina Martin of New America Media. The story link, included in the latest CA Progress Report, is provided below.

“This is a sex-discrimination case brought by six California women on behalf of female employees at Wal-Mart and Sam’s Club stores across the country. The lead plaintiff, Betty Dukes, started working at the company in 1994 and still works at a Wal-Mart store in the town of Pittsburg, outside San Francisco.

The women’s claims are that: 1) they get paid less than men for doing the same jobs, and 2) the company denies them promotional opportunities even when they are better qualified and have more years of service than male co-workers. One of the things women told us repeatedly is they would train men who started working at Wal-Mart way after they did, and these men would become their supervisors. The women would think, “Wow, how unfair is that.”

Wal-Mart is a company that prides itself on promoting from within. But the women we surveyed reported innumerable obstacles when they tried to move into managerial positions, as well as discrepancies in pay that got wider and wider. At the management trainee level, women earned an average of $22,400, versus $23,200 for men. At the store manager level, it was $89,000 versus $105,000. By the time they reached the regional vice president level, women were earning $279,772, while men were averaging $419,000.

The issue before the Supreme Court is whether the lawsuit should be allowed to continue as a class action.  Why is this issue so important, in the Wal-Mart case and beyond?

In many instances, problems in a workplace are so widespread that it is not feasible for individuals to bring separate lawsuits. Some situations call for systemic change. Wal-Mart is the largest private employer in the world. It is not a good use of court resources for thousands of separate suits to be brought by women who may have been shortchanged $2,000 a year, not to mention that an individual in that situation would never be able to find a lawyer to represent her. The injustice and violation of law would then persist year in and year out.

In order to be certified as a class, the plaintiffs had to show that Wal-Mart’s practices were widespread and affected large numbers of women. To do this, the legal team gathered evidence from many, many women around the U.S. In 2004, the federal court in San Francisco allowed the suit to proceed on behalf of more than 1 million current and former Wal-Mart employees. The Ninth Circuit Court of Appeals has upheld the class certification three times.

This is a case that seems especially important in the current economic climate— people are desperate for work, unions are under siege, and companies have more leverage than ever, especially in nonunion industries or states.

It’s true these are very challenging times for all workers, but especially true of low-wage workers. It used to be that many employees had unions, which collectively could demand fair wages and better treatment of workers. But there are no unions at Wal-Mart, and there, as at most other companies today, employees are on their own.

Wal-Mart started out in a small town in the South, and I think that many of its policies and practices are rooted in its origins. Historically, Wal-Mart’s senior managers embraced the notion that women are not the primary breadwinners. When some of our clients asked why John Doe was paid more than she was, it was not uncommon for her to be told, “Because he has a family to support”—even when the worker was herself the sole breadwinner in her family A number of key people also held the view that women weren’t interested in advancing to management, they were perfectly content to remain in entry-level jobs.

What is Wal-Mart’s argument against allowing the class action to proceed?

Wal-Mart’s main contention is that women workers across 3,400 stores and 170 different job classifications cannot possibly have enough in common to be treated as a class. But as an interesting aside, Wal-Mart was a lead plaintiff in an antitrust class action brought on behalf of 8 million merchants, suing Visa and MasterCard. In that instance size wasn’t an obstacle to proceeding as a class action.

Do you think much has changed in Wal-Mart since the suit was filed in 2001?

One positive effect of litigation is that most defendants immediately begin addressing the problems that are at the root of the lawsuit. Wal-Mart did begin changing some of its practices after the case was filed. It created a promotion system whereby employees can learn about management openings, instead of waiting for a tap on the shoulder from their boss. It created a diversity office and tied compensation for senior managers to meeting diversity goals. It created a global women’s leadership council. And it restructured its overall compensation system, which hopefully has addressed some of the disparities that exist.

We know these things because they are reported in the press. The information collected in the course of the lawsuit itself is now several years old. After the Supreme Court ruling, which is expected in June, the case will go back to the lower courts, there will be more discovery, and we’ll get an accurate picture of how much Wal-Mart has actually changed. Maybe Wal-Mart has gotten better. If so, that’s great. That’s what this lawsuit is all about.”

http://www.californiaprogressreport.com/site/node/8804

Juice readers: “In 1963, Congress passed the Equal Pay Act (“EPA” or the “Act”) as an amendment to the Fair Labor Standards Act, to “prohibit discrimination on account of sex in the payment of wages by employers.” Congress included within the text of the EPA a clear and concise policy statement and briefly described the problems it was intended to remedy. The clear statement of congressional intent and policy guiding the EPA’s enactment indicate the Congressional desire to fashion a broad remedial framework to protect employees from wage discrimination on the basis of sex. The Supreme Court has expressly recognized the view that the EPA must be broadly construed to achieve Congress’ goal of remedying gender discrimination. Congress passed the EPA out of “concern for the weaker bargaining position of women” to provide a remedy to discriminatory wage structures that reflect “an ancient but outmoded belief that a man, because of his role in society, should be paid more than a woman.” The EPA protects both men and women. It also protects administrative, professional and executive employees who are exempt under the Fair Labor Standards Act.

The EPA, Section 206(d)(1), prohibits “employer[s] … [from] discriminat[ing] … on the basis of sex by paying wages to employees […] at a rate less than the rate [paid] to employees of the opposite sex […] for equal work on jobs [requiring] equal skill, effort, and responsibility, and which are performed under similar working conditions[.]” To establish a prima facie case under the EPA, an employee must show that:

  1. different wages are paid to employees of the opposite sex;
  2. the employees perform substantially equal work on jobs requiring equal skill, effort and responsibility; and
  3. the jobs are performed under similar working conditions.

The EPA provides that the employer may not pay lower wages to employees of one gender than it pays to employees of the other gender employees within the same establishment for equal work at jobs that require equal skill, effort and responsibility, and that are performed under similar working conditions.”

Gilbert note: It will be interesting to see how the court rules in this matter as it relates to permitting a nationwide “class action” claim. We are talking some huge numbers. Wal-Mart, the world’s largest retailer, has over two million employee/associates in 8,400 stores.


About Larry Gilbert