Client Alerts
Ninth Circuit Approves Certification for Largest Class Action Ever
July 2010
The lawsuit, which was filed in June 2001, asserts claims for sex discrimination against Wal-Mart — the largest private employer in the world — under Title VII of the 1964 Civil Rights Act. The complaint alleges that women employed by Wal-Mart are paid less than men in comparable positions, are denied or delayed in receiving promotions in a disproportionate manner when compared with similarly situated men, work in an environment with a strong culture of discrimination, and are subjected to various individual sexist acts. The plaintiffs sought to certify a nationwide class of women who are or were employed at one or more of Wal-Mart’s 3,400 stores in 41 regions. At the time the lawsuit was filed, the class was estimated to include 1.5M members. The district court granted the motion to certify the class in part, and denied it in part. Wal-Mart appealed arguing that there was a lack of commonality and typicality among the members to support class certification.
Class actions are procedural devices which combine multiple individual claims for the purposes of judicial efficiency. "Commonality" means that there are questions of law or fact common to the class members. "Typicality" means the claims or defenses of the class representatives are characteristic of the claims or defenses of the entire class. These requirements tend to overlap but establish guideposts to determine whether a class action is economical, and whether the named plaintiff(s) can fairly and adequately protect the interests of the class members.
The potential Wal-Mart class members include both salaried and hourly employees in 53 different departments and 170 job classifications. The Court upheld the district court’s finding that although the class was large, it was united by company-wide practices which include excessive subjectivity in personnel decisions, gender stereotyping, and maintenance of a strong corporate culture. Commonality among the potential class was established through statistical evidence of gender disparities attributable to discrimination, expert opinions, and anecdotal evidence of discriminatory attitudes held or tolerated by management in the form of 120 employee declarations.
The 6-5 en banc decision was hotly disputed amongst the Circuit Court judges. The dissent emphasized the differences among the class members and argued that the six plaintiffs who allegedly suffered discrimination at the hands of a few individual store managers failed to present sufficient evidence that 1.5M members of the proposed class suffered similar discrimination. When compared to the 1.5M potential members, the 120 declarations (or one declaration for every 12,500 women) amounted to nothing more than evidence of "isolated or sporadic" incidents of discrimination, insufficient to show a company-wide policy of discrimination. The declarations claim different forms of discriminatory acts, at the hands of different mangers, in different parts of the country, at different times. "They have little in common but their sex and this lawsuit."
Until this decision, the largest certification upheld by the 9th Circuit was a class of 15,000 African-American employees alleging race discrimination. In that decision the Court cautioned that the class was an "ambitious" claim for commonality that was "especially worthy of scrutiny."
The potential exposure is huge. The case may be worth billions of dollars in back pay, and potential punitive damages of up to $300,000 per class member. Wal-Mart is expected to appeal the decision to the U.S. Supreme Court.
