June 20, 2011

Supreme Court victory for Wal-Mart…and the women who work there

By Supreme Court victory for Wal-Mart…and the women who work there

Author: Timothy Sandefur

The Supreme Court’s decision today in Dukes v. Wal-Mart is a major victory for Wal-Mart, for consumers, and for the many women who depend on Wal-Mart for jobs and a livelihood. PLF filed a friend of the court brief in the case (and this brief in the Ninth Circuit before that).

The case is about the rules for class action lawsuits alleging discrimination. The Ninth Circuit allowed the case to proceed as one lawsuit even though the class of women plaintiffs all allege very different injuries–and even though Wal-Mart doesn’t have any discriminatory employment policy. On the contrary, Wal-Mart doesn’t have any central employment policy at all. Yet the plaintiffs claim that this is itself a discriminatory policy! As we argue in the brief, there are perfectly good reasons for Wal-Mart to not have a single policy, but instead to rely on the decisions of local managers who know their stores, customers, and employees better. The Supreme Court agreed with that view today:

The only corporate policy that plaintiffs’ evidence convincingly establishes is Wal-Mart’s “policy” of allowing discretion by local managers over employment matters…. [I]t is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business…. Because respondents provide no convincing proof of a companywide discriminatory pay and promotion policy, we conclude that they have not established the existence of any common question.

This is not just an important decision for Wal-Mart, of course. Businesses are frequently victims of abusive and predatory class-action lawsuits. Companies have to pay to defend themselves or settle, and the money and time they spend doing that could have gone to cutting prices, expanding, innovating. Abusive lawsuits therefore cost jobs, raise the cost of living, and dry up economic opportunity.

But there’s something much deeper at work in this case. The lawyers here were trying to transform the class-action lawsuit from a method for redressing large-scale legal injuries into a tool for enforcing “social justice” and requiring businesses to equalize outcomes. The idea that the absence of a policy is a policy–that, in effect, Wal-Mart was discriminating because it just ends up having fewer women employees, or fewer managers, or whatever, as the result of what the plaintiffs admit is an undesigned process of individual, local decisions,–would mean that any series of transactions that lead to unequal outcomes, without any discriminatory intent or policy, would be grounds for a lawsuit. In short, the law would introduce the “bed of Procrustes,” and any company that doesn’t use quotas to enforce equal outcomes would be dragged into court.

Fortunately, the Court decided not to let that happen. “Merely showing that Wal-Mart’s policy of discretion has produced an overall sex-based disparity does not suffice.” This decision is therefore a victory both for Wal-Mart and for basic common sense.

Update: Amazingly, Sen. Patrick Leahy has responded to the decision in a statement that “an activist majority of the Supreme Court is making it more and more difficult for any American to have their day in court.” In fact, the decision today went unanimously in favor of Wal-Mart and against the plaintiffs. Justices Ginsburg, Sotomayor, Breyer, and Kagan also agreed that the class certification decision was wrong, just for different reasons. It is therefore irresponsible and superficial to say that the decision is somehow proof of an “activist majority of the Supreme Court” being biased against women or in favor of evil greedy corporations.

What to read next