T he decision by a San Francisco judge to
certify a lawsuit by several women alleg-
ing that Wal-Mart discriminated against them in pay and promotions as a class action covering virtually all current and former female employees — up to 1.6 million plaintiffs — seems like a huge stretch. Whether the class action is justified or not, however, Wal-Mart, the most successful retailer in the world, has become a target and will have to pay for its success.
The ruling makes the legal proceeding the largest workplace bias lawsuit in U.S. history.
A class-action lawsuit is used when one or more individual cases alleging a wrong are combined to cover a larger class of allegedly injured parties. It can sometimes be a useful way of handling a situation where many similar lawsuits have been filed, or of trying to right a widespread wrong.
But this application is troubling. As Chapman University Law School professor John Eastman said, “Sex discrimination is such an individual matter that it’s hard to see real commonality over so many potential plaintiffs.”
It is legitimate to disagree about whether or on what basis government should regulate what companies pay their employees at all. In a genuinely free market employment would be seen as contractual arrangements into which individuals and corporations are free to enter or to decline to enter. The most effective remedy for a company that treats employees unfairly is a competitor that treats them better or pays them better.
In the present-day United States, however, government regulates such transactions closely, given minimum-wage laws and codes regarding hourly wages, overtime pay and so on. In addition, discrimination on the basis of such things as race, ethnic origin and gender is outlawed.
One problem — especially when it comes to certifying all female employees of a giant corporation as a class — is that pay and promotion decisions in almost every company inescapably contain a measure of subjectivity. Are some bosses more generous than others, even in the same corporate structure? Should it be the job of government to correct every such instance of unfairness? If so, on what basis?
The original lead plaintiff, Betty Dukes, of Pittsburg, Calif., says that during her first nine years at Wal-Mart she was paid $8.44 an hour at a variety of positions while several men holding similar positions but with less seniority were paid $9 an hour.
She might have a case under current law, but it would require an exploration of her particular circumstances compared to those of men she alleges were paid more than she was to determine whether decisions about her pay were a result of discrimination against her because she is a woman.
Even if that were proven, it would be a leap to demonstrate that it was a company-wide policy to pay women less than men for identical jobs and to pass women over for promotions.
Nobody claims there is a written Wal-Mart directive ordering managers to discriminate against women, just a company culture that implicitly condones and encourages it. Wal-Mart contends that its individual stores have enough autonomy that it’s absurd to lump them all together in a class.
Plaintiff lawyers argue that Wal-Mart stores are “virtually identical in structure and job duties” and claim that statistics prove their point. For instance, “though about two-thirds of Wal-Mart’s hourly employees are women they make up only a little more than a third of all salaried managers,” the Wall Street Journal reported.
Getting to the nub, even though technically the judge’s ruling doesn’t get to the merits of the case, the decision to certify the case as a class action tilts the playing field against Wal-Mart. The company says it will appeal the decision and it might be successful. If it isn’t, the incentive will be to settle, paying a pittance to the women and a bonanza to the lawyers.
Such is life in the lawsuit casino.