In a ruling that may mean new limits on class-action suits, the Supreme Court on Monday ruled for Wal-Mart Stores in the largest sex-discrimination lawsuit in history, as it put the brakes on a massive job discrimination lawsuit against the chain.
In a ruling that was not unexpected, the justices overturned a U.S. appeals court ruling that more than a million female employees nationwide could join in the lawsuit, which accused Wal-Mart of paying women less and giving them fewer promotions. The Supreme Court agreed with Wal-Mart that the class-action certification violated federal rules for such lawsuits. It accepted Wal-Mart's main argument that the female employees in different jobs at 3,400 different stores nationwide and with different supervisors do not have enough in common to be lumped together in a single class-action lawsuit.
The justices said the lawyers arguing the case failed to point to a common corporate policy that led to gender discrimination against workers at thousands of Wal-Mart and Sam’s Club stores across the country. The court ruled unanimously on some aspects of the case and divided on others.
With billions of dollars at stake, the ruling was big victory for Wal-Mart, the nation’s largest private employer.
The case was one of the most closely watched Supreme Court business disputes in some time, in part because the justices hadn’t looked at the standards for certifying a class-action suit in more than 10 years.
The Supreme Court only decided whether the 10-year-old lawsuit could proceed to trial as a group, not the merits of the sex-discrimination allegations at the heart of the case.
Commenting on the ruling, the lawn firm Seyfarth Shaw posted on its Workplace Class Action blog: "The new roadmap is decidedly more favorable to employers than before. Employers should be upbeat in terms of the Supreme Court's articulation of the required showings plaintiffs must make in the future to certify an employment discrimination class action. In short, the bar has been raised."