March 29, 2011

Oral argument in Wal-Mart class action reveals the case's fatal flaw

By Oral argument in Wal-Mart class action reveals the case's fatal flaw

Author: Timothy Sandefur

Here is the transcript of the oral arguments in Dukes v. Wal-Mart this morning. There’s a particularly interesting question and answer on pages 24 and 25. That’s where Justice Sotomayor asks the plaintiffs’ lawyer what exactly it is that the plaintiffs want in this case, and the reason that’s interesting is because the plaintiffs in this case aren’t claiming that Wal-Mart has some company-wide discriminatory policy. In fact, Wal-Mart doesn’t have any central policy about hiring and firing and promotion and whatnot (except an explicit policy forbidding discrimination). Those decisions are made at the local level by individual managers. This is a good thing, because local managers know their employees best, know their customers best, and are in the best position to determine who deserves promotions and raises and who doesn’t. Having a giant corporation-wide policy would only gum up the works with needless bureaucracy. As I argue in the brief that PLF filed, Wal-Mart’s decentralized business model is just what makes it such a great success.

But that, the plaintiffs say, is just the problem. A decentralized policy, they argue, allows vaguely defined “discriminatory” social attitudes to somehow creep into the process. In other words, the plaintiffs are arguing that the lack of a policy that forces outcomes to be equalized is itself a form of discrimniation. As the late Prof. Richard Nagareda wrote, “on plaintiffs’ own evidence, the disparities at  Wal-Mart essentially  replicate  the disparities in pay and promotion along the dimension of sex across the United States economy as a whole. On plaintiffs’ account, this is precisely the point….  Indeed, an emerging  scholarly  literature urges a reconceptualization of  the meaning of discrimination under Title VII to encompass accounts in the nature of ‘structural discrimination’ on conduit-like lines.” Common Answers for Class Certification, 63 Vand. L. Rev. En  Banc 149, 167 (2010). In simpler language, the plaintiffs say that Wal-Mart’s work force looks like America—instead of like the perfectly equalized outcomes they’d rather see—and that is discrimination. This case is not about real discrimination; it’s about transforming the antidiscrimination laws into a tool for forcing America’s businesses to abide by liberal conceptions of “social justice.”

So on page 24, Justice Sotomayor asks the plaintiffs’ lawyer, “What would the injunction look like in this case?” and the lawyer answers,

The injunction would look like a series of remedial measures that would direct Wal-Mart to provide for detailed criteria by which to make pay and promotion decisions that are job-related in a way that hasn’t been true up until now.  It would provide for it to hold managers accountable for the decisions they make; it would ensure effective oversight of the—of these pay and promotion decisions….

In other words, the courts should force Wal-Mart to change its business model to have a centralized corporate control over hiring and promotion decisions throughout all its stores. That is not what class action lawsuits were devised for—indeed, it’s not what the justice system was devised for. As PLF’s brief argues, courts shouldn’t be in the business of deciding “social justice” disputes because—well, because there’s no such thing as “social justice.” As Friedrich Hayek explained in Law, Legislation And Liberty, this phrase really has no ascertainable meaning at all.

Veteran Supreme Court reporter Lyle Dennison describes his impressions of today’s oral argument at SCOTUS Blog: 

It took only a few minutes of argument Wednesday by a lawyer who sued discount retailer Wal-Mart over the way it allegedly treats its women workers for a potentially fatal flaw in that case to stand out boldly….  A basic claim of the case…that Wal-Mart has a policy of maintaining a common “culture” (the “Wal-Mart Way”) that ensures uniformity throughout its thousands of stores, yet company headquarters gives its local store managers unlimited discretion to decide workers’ pay and promotions, and the two together result company-wide in lower pay and fewer promotions for female employees.  As a logical proposition, that may seem somewhat self-contradictory….

What to read next