If at first you don’t succeed, try, try, try again. That’s what trial lawyers are saying about the Supreme Court’s Wal-Mart decision, released earlier this week. Wal-Mart is America’s largest private employer. On Monday, the U.S. Supreme Court threw out the class-action lawsuit alleging sex discrimination filed by three current and former employees on behalf of all 1.5 million current and former female Wal-Mart employees.
The court ruled that the 1.5 million women and the 3,400 Wal-Mart stores — all Wal-Mart stores in the United States — had too little in common to allow a class-action lawsuit to proceed.
The court said that there was no proof that Wal-Mart, which has a stated nondiscrimination policy, had a general policy of systemic discrimination. The Wal-Mart stores had too little in common for a class-action suit.
Individual managers made their own decisions as to promotion, and plaintiffs had not proved that a culture of discrimination existed at the company.
But fees of plaintiffs’ lawyers typically are a percentage of the damages awarded, and so the larger the class, the larger the attorneys’ fees.
Joseph Sellers, one of the lawyers representing women in the case, promised to continue the fight by bringing more class-action lawsuits at the store or regional level.
He told the New York Times that “this case will be splintered into many cases that may take longer and be harder to resolve.”
Wal-Mart has been a target of trial lawyers because its employees are not unionized. Hence, the campaign to prove Wal-Mart treats women unfairly.
Millions of dollars spent on litigation are millions that Wal-Mart cannot spend expanding stores and hiring. And with an unemployment rate of 9.1 percent, more hiring is needed.
Texas, which reformed the state’s civil justice system in 2003 and just passed a “loser pays” law to discourage frivolous lawsuits, has created 37 percent of all net new jobs in America since the recovery began in June 2009.
The court decision doesn’t mean that large companies can discriminate against women. It does mean that individual women, or groups of women under one supervisor, store, or region, have to prove each case on its merits.
Two of the three Wal-Mart employees who brought the class-action suit are unlikely to have won individual sex-discrimination suits.
Betty Dukes, the lead plaintiff, who worked in a Pittsburg, Calif., Wal-Mart, had been promoted to manager, but then demoted to cashier and greeter after admitted disciplinary violations.
Edith Arana, who worked in Duarte, Calif., from 1995 to 2001, was dismissed for violating Wal-Mart’s timekeeping policy. She was told to apply to her district manager when she complained that her store manager was being unfair, but she never pursued the complaint.
Presumably Wal-Mart would not have promoted men under the same circumstances.
The plaintiffs submitted data showing that men were managers in far greater proportion that their representation among employees, and had higher average salaries.
But these averages might not account for differences in jobs, education, time in the work force, or hours worked. The Labor Department reports that about 27 percent of women worked part-time in 2010, compared with 13 percent of men. Full-time women work fewer hours than full-time men.
These considerations explain some of the male-female differences between average pay and numbers of supervisors at some Wal-Mart stores. If more women work part-time, they may not be eligible to be promoted to manager, nor may they want to assume the responsibilities of a full-time position.
Women should be treated on a case-by-case basis, the same as men, despite large fees collected by trial lawyers from class-action suits.
Examiner Columnist Diana Furchtgott-Roth ([email protected]), former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.
