On March 29, 2011, the Supreme Court heard oral argument in Dukes, et al v Wal-Mart, a closely watched case that promises to provide guidance in the employment class action arena. The Court will decide whether a federal court in California properly certified a national class of more than 1.5 million current and former female employees alleging the pay and promotion practices of the retail giant discriminated against women.
The oral argument was lively, as the justices peppered each party’s attorneys with questions on two major issues: (1) whether Wal-Mart’s alleged gender-biased culture and subjective decision-making could support a commonality finding necessary for class certification; and (2) whether a class action, which includes a back-pay request, was proper under the federal rules and, concomitantly, whether Wal-Mart could obtain due process.
Interestingly, there appeared to be at least some gender divide in addressing the commonality issue, with Justices Ginsberg, Sotomayor, and especially Kagan expressing more openness to establishing commonality based on a policy of subjective decision-making. Other Justices doubted this approach, with Justice Roberts asking how many examples of subjective discriminatory decision-making created a policy upon which to base a class action. Justice Scalia questioned the internal logical inconsistency of the employees’ theory, remarking that the complaint faced two directions and that he was being “whip-sawed” by their arguments that a corporate culture controlled all decisions but that individual supervisors were allowed to exercise unfettered subjective decision-making. Other Justices questioned whether employees’ proposed approach would allow a class action against all companies based only on a showing of a statistical disparity between male and female employees.
There appeared to be more consensus on whether the proposed class action could proceed under the more easily satisfied standards of the federal rules (in particular, Rule 23(b)(2)) when employees are seeking back pay. Several Justices, including perhaps most aggressively Justice Sotomayor, expressed skepticism that employees’ proposed formula-based damage approach would give Wal-Mart the opportunity to present individualized defenses necessary for due process.
Sixty minutes transpires quickly in a case of such magnitude involving multi-layered issues bordered by shades of gray, making prognostication a foolish endeavor. However, we cannot help ourselves. It is very unlikely that the Court will affirm the Ninth Circuit’s opinion certifying the class in its entirety. It is likely that the court will not allow the class to proceed under Rule 23(b)(2), at least with respect to the formula-based damages approach. Finally, the commonality question may yield separate concurring and dissenting opinions illustrating the differences of opinion regarding the degree of specificity required. Therefore, there will be some guidance, but our bet is that this will not be the last time that the Supreme Court examines the requisites for employment discrimination class actions. Stay tuned for future articles on whether our predictions come true.