On Tuesday, February 6, 2007, a divided three-member panel of the Ninth Circuit Court of Appeals affirmed a district court’s ruling which certified the largest employment discrimination class action in U.S. history. The class consists of approximately 1.5 million female current and former Wal-Mart employees who claim that the company was gender-biased in pay and promotions.

At the district court level, Wal-Mart emphasized that the class proposed by the plaintiff was “historic” and that the sheer size of the group should weigh against certification.

The district court acknowledged these concerns, but found that certification was appropriate because the issues involved were not unusual and the claims were relatively narrow in scope.

On appeal, two members of the threejudge panel found that “the district court acted within its broad discretion in concluding that it would be better to handle this case as a class action instead of clogging the federal courts with innumerable individual suits.” The panel went on to note that “[a]lthough the size of this class action is large, mere size does not render the case unmanageable.” The third member of the panel, Judge Andrew Kleinfeld, dissented, stating that the case “poses a considerable risk of enriching undeserving class members and counsel, but depriving thousands of women actually injured by sex discrimination of their just due.”

Perhaps most notable and disturbing to employers is the panel’s acceptance of the plaintiffs’ theory that delegating discretion to store-level managers on various personnel decisions without mandatory objective criteria or monitoring can itself serve as evidence of a common pattern of discrimination. In effect, the decision may allow plaintiffs’ lawyers to have an employment discrimination class certified based upon a decentralized, subjective management structure without any evidence of actual discrimination.

Wal-Mart has indicated that it will ask the Ninth Circuit to reconsider the decision. The panel’s decision, however, represents a significant win for plaintiffs’ lawyers who are bound to be emboldened to seek other large class action certifications.