What’s with the Walmart Class Action?

The Walmart class action is making people angry.  So, what’s the deal?

Is the highest court in the land going to rule for big business and leave the little guys unable to bring a class action against a large employer?   Or, is the case too enormous to be tried, and just a bad idea because it will hurt businesses and the economy?  Well, this is what you hear – but there is more to the debate, much like the McDonald’s hot coffee story.

Originally 6 women filed an action in San Francisco against Walmart claiming Walmart discriminated against them based on their gender.  The women claimed they are paid less than men despite higher performance ratings and performance evaluations, and women receive fewer promotions and wait longer for promotions than men.  The federal district court in San Francisco certified the class – meaning the claims can be tried together. Walmart appealed.  The Ninth Circuit Court of Appeals agreed that the class could be certified, but they wrestled over the test for a class action.

The Walmart case supposedly involves as many as 1.5 million women.  True or False? Actually, we don’t know.  But, under the Ninth Circuit’s ruling, women who no longer work at Walmart cannot be part of the class, eliminating 2/3rds of the women according to the Ninth Circuit – so the class sounds like it could be down to 500,000 women.  But, who knows?  The United States Supreme Court has not ruled.  Fact of the matter is we don’t know how many would be in the class.  So, calling the class 1.5 million women is questionable, at best.  Overuse of the 1.5 million number inflames both sides.  Problem is – no one knows the size of the class at this point.

But that is not all.  The big issue in the case is whether the women in the class have enough in common to allow the case to go forward as a class action.  Plaintiffs submitted 120 affidavits of women describing anecdotal evidence of gender bias.  But, the plaintiffs had to show a central Walmart policy of gender discrimination.  To show a central policy, plaintiffs used an expert report by Dr. Bielby, an academic specializing in “social framework analysis”.  Dr. Bielby’s expert report stated that he had collected “scientific evidence about gender bias, stereotypes and the structure and dynamics of gender inequality in organizations” and concluded that Wal-Mart’s centralized personnel policy and its policy allowing subjective decisions by managers in the field may be responsible for the pay disparity.  Together, he said, those factors allowed stereotypes to infect personnel choices, making “decisions about compensation and promotion vulnerable to gender bias.”  One important question before the United States Supreme Court is whether this expert report was properly considered.

So, now it makes sense.  According to the New York Times, the plaintiffs’ theory is that centralized policy gave local managers too much discretion in pay and promotion decisions, opening the company up to criticism.  They are relying on Dr. Bielby’s report — and his methodology is hotly disputed.  WalMart says its policies bar discrimination and promote diversity, and its policies across the country do not have enough in common to warrant treatment as a class.

And, WalMart wants the cases tried individually, not as a class based on a sociology theory. The Wall Street Journal reports that based on the justices questions (that is the subject for another day), the Court is likely to rule for Walmart.  If they don’t, a ruling for the plaintiffs may open the door to unprecedented liability.

I have mediated an employment case that was certified as a class action and another huge case that was not certified as a class action.  I know how it impacts settlement.  So, I am interested.  Hmmm.  Sounds like they both have arguments.

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About kshobbs

Karin has mediated over 3,600 disputes in her 14 years as a full on professional mediator.
This entry was posted in Class Action, Employment Law, Gender Discrimination, law, Settlement, United States Supreme Court, Walmart and tagged , , , , , , , . Bookmark the permalink.

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