{"id":36662,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-legal\/uncategorized\/dukes-v-wal-mart-a-foreboding-class-certification-decision-for.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"dukes-v-wal-mart-a-foreboding-class-certification-decision-for","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/litigation-disputes\/dukes-v-wal-mart-a-foreboding-class-certification-decision-for.html","title":{"rendered":"Dukes v. Wal-Mart: A Foreboding Class Certification Decision for Employers"},"content":{"rendered":"
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On June 21, 2004, a federal district court in San Francisco certified a nationwide class of approximately 1.6 million<\/b> current and former female employees of Wal-Mart who claim sex discrimination in promotions and pay at Wal-Mart stores around the country. Dukes, et al. v. Wal-Mart Stores, Inc.<\/i>, No. C 01-02252 (N.D. Cal. June 21, 2004). Not only does the size of the class dwarf other previous employment class actions, but this may also be the first billion<\/b> dollar employment discrimination case ever. The implications of this decision are profound and potentially frightening. This ASAP summarizes the court’s opinion, discusses ramifications and offers practical suggestions that companies should consider in light of this decision.<\/p>\n

The Dukes Decision<\/b><\/p>\n

The main issues on which the court focused in its 84-page opinion were \u201ccommonality\u201d and \u201cmanageability.\u201d Commonality centers on the relationship of common facts and legal issues among class members. Manageability concerns whether class treatment would be efficient and manageable, thereby achieving an appreciable measure of judicial economy.<\/p>\n

A. Commonality<\/b><\/p>\n

In support of their commonality claim, plaintiffs presented three types of evidence: (1) facts and expert opinions supporting the existence of company-wide policies and practices that discriminated against women; (2) expert statistical evidence of class-wide gender disparities attributable to discrimination; and (3) anecdotal evidence of discrimination.<\/p>\n

1. Company Policy and Practice<\/b><\/i><\/p>\n

The court found that Wal-Mart store managers have \u201csubstantial discretion\u201d in making promotion and salary decisions for hourly employees, leading the court to conclude that such decisions are characterized by \u201cexcessive subjectivity<\/b>.\u201d For example, while the court concluded that the company has minimal requirements for promotion (e.g., employee has a current \u201cabove average\u201d evaluation, is not in a \u201chigh shrink\u201d department or store and is willing to relocate), beyond that, it found that selection for management training is the product of a \u201ctap on the shoulder\u201d process. Similarly, the court concluded that, in making salary decisions, store managers were not constrained by objective criteria or oversight. Moreover, the court referred to evidence that Wal-Mart did not post job vacancies for many management positions, and employees who wished to apply for a store manager position needed the permission of the district manager.<\/p>\n

These findings were problematic. The court noted that case law has \u201clong recognized that the deliberate and routine use of excessive subjectivity is an \u2018employment practice’ that is susceptible to being infected by discriminatory animus.\u201d Rejecting Wal-Mart’s argument against commonality that pay and promotion decisions are made locally by individual store managers, the court instead found a nexus between the subjective decision-making and discrimination in the evidence of gender stereotyping and corporate culture at Wal-Mart stores nationwide.<\/p>\n

a. Corporate Culture of Uniformity<\/i><\/p>\n

The court found that Wal-Mart actively fosters a strong and distinctive, centrally-controlled, corporate culture. According to the \u201cWal-Mart Way,\u201d for example, new employees go through the same orientation process, employees attend daily meetings where managers discuss company culture and employees do the Wal-Mart cheer, and store managers are provided with corporate culture lessons and training materials to present at weekly meetings. Plaintiff’s sociology expert opined that, through the company’s efforts, \u201cemployees achieve a common understanding of the company’s way of conducting business.\u201d The court concluded that this strongly imbued culture supported a finding of commonality among class members.<\/p>\n

b. Gender Stereotyping<\/i><\/p>\n

The same sociologist also opined that managerial decision-making based on subjective factors and with substantial discretion allows managers to perpetuate stereotypes. The expert concluded that promotion and pay decisions \u201care likely to be biased unless they are assessed in a systematic and valid manner, with clear criteria and careful attention to the integrity of the decision-making process.\u201d For example, although Wal-Mart has diversity and EEO policies, the expert opined that the company has neither undertaken a systematic assessment to identify possible barriers to women’s advancement nor performed any surveys addressing diversity or gender issues. Recognizing that the expert’s opinions \u201chave a built-in degree of conjecture,\u201d the court nonetheless concluded that there was sufficient scientific foundation for the opinions, and ultimately their validity would be a question for the jury.<\/p>\n

2. Statistical Evidence of Discrimination<\/b><\/i><\/p>\n

Plaintiffs’ statistical expert opined that female employees are paid less than males in every region; pay disparities exist in most job categories; the salary gap between men and women widens over time; women take longer to enter into management positions; and the higher up the corporate ladder, the lower the percentage of women. For example, according to plaintiffs’ expert:<\/p>\n