Wal-Mart Wins In Supreme Court Ruling Of Employment Discrimination Lawsuit

June 20, 2011

The Supreme Court blocked a huge employment discrimination lawsuit against the nation's largest private employer Wal-Mart Stores Inc., declaring that the case did not qualify as a class action.

As The Wall Street Journal reported, the lawsuit was initiated in 2001 by six women on behalf of current and former Wal-Mart employees. The plaintiff class claimed that Wal-Mart's corporate culture led to negative treatment of female employees in all 41 domestic regions. Specifically, they argued that Wal-Mart paid female workers less than their male counterparts and provided fewer opportunities for advancement. They sought back pay, punitive damages and changes in how the company made pay and promotion decisions.

According to the Los Angeles Times, the Supreme Court would not allow the case to go forward as a class-action claim because the plaintiffs could not prove that the company systematically discriminated against women.

"In a company of Wal-Mart's size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction," said Justice Antonin Scalia.

As CNN pointed out, the case was closely watched as it could eventually affect every private employer.

Despite the court's decision, it was not decided whether the 1.6 million female employees had in fact been discriminated against by the retail giant--it merely stated that the case could not proceed as a class. Individual plaintiffs could move forward with a series of narrower lawsuits against individual stores or supervisors.

Most discrimination cases do not reach the high court, noted the federal Equal Employment Opportunity Commission (EEOC). According to their data, in 2003, some 27,000 sex discrimination claims were resolved by the EEOC and more than 57 percent of claims were dismissed due to having "no reasonable cause".

According to the Los Angeles Times, Monday's ruling is also a victory for other large employers as it could have led to a slew of other similar claims.

In the company's defense, executive vice president Gisel Ruiz told CNN, "Wal-Mart has a long history of providing advancement opportunities for our female associates and will continue its efforts to build a robust pipeline of future female leaders."

Although all nine justices ruled that the case was not a class action, some argued that there was indeed evidence of systematic sex discrimination. Justice Ruth Bader Ginsburg noted that "women fill 70% of the hourly jobs in the retailer's stores, but make up only 33% of the management employees. The higher one looks in the organization, the lower the percentage of women."

Furthermore, the company allowed individual managers to decide pay and promotion, which Ginsburg argued could lead to discrimination.

"Managers, like all humankind, may be prey to the biases of which they are unaware," she said as quoted by the Los Angeles Times.

Compiled by Heidi M. Agustin