WASHINGTON: The US Supreme Court on Monday rejected a class action suit against retail giant Wal-Mart by 1.5 million female workers who claimed they had been systematically discriminated against on the basis of gender.
The landmark verdict — the most closely watched legal decision of the year — severely restricted how and when lawyers can bundle together discrimination lawsuits for large groups of employees and litigate the cases in one single “class action” lawsuit.
The US top court, in ruling on the side of Wal-Mart, the world's largest retailer, also makes such future legal action more difficult against any US employer.
A majority of five out of the nine justices found there were no grounds for what would have been the largest class action suit in history and that Wal-Mart should not be held liable for the tens of billions of dollars in back pay and damages sought by the plaintiffs.
“The basic theory of their case is that a strong and uniform 'corporate culture' permits bias against women to infect, perhaps subconsciously, the discretionary decision-making of each one of Wal-Mart's thousands of managers — thereby making every woman at the company the victim of one common discriminatory practice,” the court majority said.
But they said there was no evidence of a systematic pattern of discrimination as a matter of Wal-Mart policy to unite all the cases.
“Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members claims for relief will produce a common answer to the crucial question why was I disfavoured.”
Reaction to the ruling was swift, with observers noting it created a “road map” for filing class action suits that was more favourable to employers.
David Sanford, who represented employees in a class action against Novartis, called it “yet another example of the court prioritising the rights of big corporations over the rights of the American worker”.
He noted that all three of the court's female justices were in the minority.
The largest private employer in the United States, Wal-Mart is a colossus with tens of millions of customers passing through its 3,400 US stores each week, and reaping more than 400 billion dollars a year in revenues worldwide.
The original case was filed a decade ago by six female Wal-Mart employees who claimed they systematically received lower pay than their male counterparts and were passed over for promotions.
The liberal-leaning Ninth Circuit Court in San Francisco agreed by a 2-1 vote in 2007 and again in a narrow 6-5 decision last April to grant the case the class-action status the women sought.
Lawyers representing the plaintiffs argued before the Supreme Court that women at Wal-Mart made up about two-thirds of the workers but only a fraction became store managers.
They also pointed out that in nearly every job category, women earned less than men, even though most had logged more years with the company.
“We brought the case in this size because we were challenging company-wide practices that discriminate, consistently discriminated against women in every one of the regions in which the company does business in this country,” plaintiffs' attorney Joseph Sellers said.
But during the oral arguments, the justices were skeptical.
They questioned whether Wal-Mart's policies were uniform enough to permit between 500,000 and 1.5 million women to be lumped together in one case.
The company simply rejected the gender-bias allegations.
“Walmart has a long history of providing advancement opportunities for our female associates, and, over the years, we have made tremendous strides in developing women throughout the organization,” said Gisel Ruiz, a Wal-Mart executive vice president.
“In fact, we have created specific training and mentoring programs to help prepare women for opportunities at all levels in our company. As a result of our efforts, Walmart is often recognized as a great place for women to work,” she said.
Democratic Representative Rosa Delauro said the ruling was “yet another bad decision from the Supreme Court for women,” calling it a blow “to the millions of women across the country facing workplace discrimination every day.”