In two separate rulings, federal district courts in the Northern District of California recognized the viability of class disparate impact claims as a vehicle to remedy widespread gender bias when attributed to a company policy. By way of background, in Wal-Mart Stores, Inc. v. Dukes (June 2011 FEB Special Bulletin), the U.S. Supreme Court slammed the door on the "most expansive class action ever" involving up to 1.5 million current and former female Wal-Mart employees. The Court found that the plaintiffs failed to provide evidence of a nationwide policy, commensurate with the scope of the class, of discrimination through Wal-Mart's vast operations.
Fast forward just over a year to late September, and, on remand, the district court in the Dukes v. Wal-Mart Stores, Inc. case rejected Wal-Mart's bid to dismiss the class claims in their entirety. Plaintiffs shrunk the proposed class considerably after the U.S. Supreme Court's decision – from 1.5 million members to several hundred thousand, and from 41 regions nationwide to 4 regions largely comprised of California workers. The district court recognized that the High Court's decision had neither considered nor foreclosed certification of a smaller, more targeted class, provided plaintiffs could provide evidence of a common discriminatory policy, an issue it reserved for another day.
Less than one week later, in Ellis v. Costco Wholesale Corporation, a different Northern District judge certified for class treatment the claims of approximately 700 female employees alleging that Costco consistently discriminates against women in promotions to assistant and general manager positions. Plaintiffs allege that Costco identifies and prepares candidates for these positions in a way that disparately impacts female workers, and executives knew of but failed to address the issue on orders from the chief executive officer. The court recognized that "although this case bears some superficial resemblance to the national Dukes case, it is in reality a much different case" due to, among other things, the smaller class size, the limited scope of the challenged discriminatory actions, and the "significant proof of companywide policies and companywide gender disparities – essentially, purported common 'causes' and common 'effects[.]'"
Thus, despite the Wal-Mart Stores, Inc. v. Dukes ruling, courts are permitting gender bias class claims where employees show some corporate policy coupled with statistical evidence of a disparate impact on the at-issue employees. Proactive measures are the best way to guard against such claims: Having a policy of non-discrimination, enforcing it rigorously, and periodically reviewing promotion patterns for signs of adverse impact on a protected class.