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Employment Law Daily Advisory Board member discusses future prospects for plaintiff classes post Wal-Mart v Dukes

June 20th, 2011  |  David Stephanides

“On the question that most significantly affects the future of employment discrimination class actions, the Court ruled for Wal-Mart and against the plaintiff class by a 5-4 margin,” noted David Wachtel, a partner in the Washington, DC firm Bernabei & Wachtel, PLLC, and member of the CCH Employment Law Daily Advisory Board. “All three female justices were in the minority,” he pointed out. The bottom line for discrimination plaintiffs: “The holding indicates that to achieve class certification, future classes will likely be smaller and more unified, and will have to find policies to attack that the courts will find more explicitly discriminatory.”

“The justices all agree that class certification was improper, because class certification was under Rule 23(b)(2), which is reserved for cases in which injunctive or declaratory relief predominates,” Wachtel said. “But that was really only a preliminary question, because the minority may have allowed the case to proceed under (b)(3), which has more defined procedural criteria than Rule 23(b)(2). But that part of the ruling was only a calm after the storm.”

“The majority opinion interpreted Rule 23(a)’s commonality requirement in a way that essentially imports a merits analysis at the pleading and class certification stage,” he observed. “The majority interpreted this to ‘require the plaintiff demonstrate that the class members have suffered the same injury’ based ‘upon a common contention . . . which means that the determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.’ The majority identifies just a few hypothetical examples of cases in which plaintiffs will be able to demonstrate commonality: employers that use discriminatory testing to make employment decisions and employers that have a ‘general policy of discrimination.’”

“The Wal-Mart plaintiffs argued that the common question linking female employees across the country was whether Wal-Mart discriminated by allowing its managers substantial discretion in making promotion and pay decisions. The majority held that ‘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.’ The dissent disagreed with the majority’s method, asserting the merits analysis was improper and premature, but also vigorously disagreed with this conclusion, stating that the ‘practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects.’”