United Liberty

The Supreme Court yesterday shutdown down a class action discrimination lawsuit against Wal-Mart, every liberal’s favorite store:

The Supreme Court ruled Monday that a sweeping gender-discrimination lawsuit against Wal-Mart Stores Inc. can’t proceed as one large class action, a significant victory for the discount retailer and other corporations.

The court, in an opinion by Justice Antonin Scalia, said the plaintiffs didn’t have enough in common to pool all their claims into a single case. The plaintiffs wanted to sue on behalf of more than a million women who are current or former employees of Wal-Mart.

To proceed, Justice Scalia said, the plaintiffs would need significant proof that Wal-Mart operated under a general policy of discrimination. “That is entirely absent here,” he wrote in a 27-page opinion.

Justice Scalia also said the plaintiffs’ claims for back pay couldn’t proceed in the class-action lawsuit. Wal-Mart, he said, was entitled to individual determinations of each employee’s eligibility for back pay.

Justice Scalia said Wal-Mart’s corporate policy barred discrimination and said the plaintiffs offered “weak” anecdotal evidence. His opinion quoted with approval a lower-court judge’s view that the plaintiffs “have little in common but their sex and this lawsuit.”

The court ruled unanimously, as Lyle Denniston notes as SCOTUSBlog, that the “women could not bring a claim for backpay, as a remedy for discrimination, under the legal theory their lawyers had used.” As noted above Wal-Mart expressly barred discrimination in the workplace and relied on managers of individual stores to ensure that the policies were being followed. However, the liberal faction (Breyer, Ginsburg, Kagan and Sotomayor) believed that the lawsuit should have been allowed to continue, which could have possibly brought severe consequences for other businesses.

Over at Cato, Walter Olsen praises the ruling:

While some press commentary simplistically treated this case as a “Which Side Are You On” parable of workplace sexism, both the majority and the dissent spend much time grappling with more lawyerly issues specific to class actions as a procedural format, such as the exact role of “common questions,” whose implications will inevitably be felt in litigation far removed from the employment discrimination context. To sweep hundreds of thousands of workers (or consumers or investors) into a class as plaintiffs even if they personally have suffered no harm whatsoever — to use sexism at Arizona stores to generate back pay awards in Vermont, and statistical disparities to prove bias without allowing defendants to introduce evidence that a given worker’s treatment was fair — bends the class action mechanism beyond its proper capacity. Also to the point, it is unfair.

Because both class action law and employment discrimination law are in the end creatures of federal statute, the elected branches will have the last word. Advocates of expansive employment litigation can be expected to introduce legislation in Congress to overturn key elements of today’s decision, a strategy that has worked well for them in the past on issues like back pay, “disparate-impact” law and the scope of coverage of the Americans with Disabilities Act (ADA). While we will soon be hearing a drumbeat to that effect, Congress should resist it, because the majority’s opinion today is to be preferred as a matter of policy, fairness, and liberty.

In particular — to take just one of the policy issues in employment law brought to center stage by today’s case — plaintiffs seek to establish that Wal-Mart’s policy of decentralized manager discretion over pay and promotions is itself an unlawful practice because (they argue) it allows too wide a scope for (unconscious or otherwise) bias on the part of store managers, notwithstanding the company’s adoption of overall policies banning sex bias. The majority led by Scalia marveled that Wal-Mart’s corporate non-policy — that is, its decision not to micromanage its local executives on personnel choices — would wind up being legally interpreted as amounting to an affirmative centralized decision to discriminate. But it’s not — and we should be glad lawyers at every big company aren’t yet insisting that every local HR decision be sent to a distant headquarters for fear of liability.

You can read the full decision and dissent below: