06.20.11

Women Lose in Walmart Suit Ruling

It isn’t just the women of Walmart who’ll suffer the fallout of the Supreme Court’s decision to throw out the largest sex-discrimination suit in history, says Michelle Goldberg.

You’ve heard about firms that are too big to fail. Now the Supreme Court has declared that some companies are too big to be sued for discrimination. On Monday, the court threw out Dukes v. Walmart, the largest sex-discrimination lawsuit in history, waged against the world’s biggest company, essentially on the grounds that it dealt with too many women. In doing so, the court has made it much harder for employees to challenge bias that results from a broad corporate culture instead of the misdeeds of a few individuals. Ironically, the wide range of Walmart’s alleged discrimination, coming from lots of managers in lots of places, became the reason the company was let off the hook.

Given the current court’s enthusiastic deference to corporations, most observers expected Monday’s ruling. Still, the facts of the case were stark enough to create uncertainty. On Friday, Best Buy settled a class-action lawsuit charging discrimination against women, African Americans, and Latino employees, in part out of concern about the Dukes verdict. “Settlements are often reached when there is uncertainty, and both sides feel that they are at some risk,” the plaintiff’s lawyer, James Finberg, told Reuters. “So depending upon how the Dukes case comes out, we could be either better off or worse off. And I think Best Buy viewed it similarly.”

Best Buy needn’t have worried; the Supreme Court has now shielded companies from class-action lawsuits in significant ways. The decision “encourages employers to simply allow discrimination to take place unchecked throughout their workplace, and the bigger they are, the easier it will be do that,” said Marcia Greenberger, founder of the National Women’s Law Center.

The ruling had two parts. The first, which was unanimous, dealt with the somewhat arcane matter of the rule under which the class—the group of people banding together in the lawsuit—was certified. But the judges broke along familiar ideological lines about whether the suit should have been able to proceed at all. That 5-4 split not only derailed this lawsuit, but also set a new, higher bar for future ones.

Monday’s ruling didn’t really deal with the underlying evidence of pervasive discrimination at Walmart, which has been well documented both statistically and anecdotally. Women make up more than 70 percent of Walmart’s employees but only a third of its salaried managers, though women at the company have lower turnover rates and higher performance ratings than men. In her 2004 book Selling Women Short: The Landmark Battle for Workers’ Rights at Walmart, the journalist Liza Featherstone wrote that women “earn less than their male counterparts in nearly every position at the company.” Women hired to do the same job as men start, on average, at 35 cents less per hour, and the gap widens from there. After five years, men make $1.16 more per hour than women hired at the same time. Frequently, women earn less than men they supervise.

Much of the reason for this lies in Walmart’s insular, patriarchal corporate culture, deeply rooted in northwestern Arkansas, where the company originated. Walmart’s managers tend to treat men as breadwinners, while acting as if women work for supplemental pin money. In court documents, one South Carolina employee, Detrix Young, reported that during a store meeting, a female co-worker asked why men in the company earn more than women. Men “are working as the heads of their households, while women are just working for the sake of working,” replied a male store manager. Another employee, a single mother named Ramona Scott from St. Petersburg, Florida, was told that men “are here to make a career and women aren’t. Retail is for housewives who just need to earn extra money.”

“One of the constants of this court, they don’t believe that discrimination exists unless you have direct and obvious proof,” said Jeffrey Toobin.

The lawsuit featured a number of such stories. But in an opinion written by Antonin Scalia, the Supreme Court ruled that, absent a clear policy of discrimination, Walmart can’t be held accountable for the cumulative decisions of its dispersed network of managers. “Other than the bare existence of delegated discretion, respondents have identified no ‘specific employment practice’—much less one that ties all their 1.5 million claims together,” wrote Scalia. “Merely showing that Walmart’s policy of discretion has produced an overall sex-based disparity does not suffice.”

This was in keeping with the conservative majority’s extremely narrow approach to civil-rights law. “One of the constants of this court, they don’t believe that discrimination exists unless you have direct and obvious proof,” said Jeffrey Toobin, author of The Nine: Inside the Secret World of the Supreme Court. “They don’t believe in proof by statistics or proof by corporate culture. They are extremely demanding of plaintiffs for proof, and it’s very hard to find that kind of proof.”

In a conference call after the ruling, the attorneys in Dukes v. Walmart promised to press ahead with individual sex-discrimination cases. Even if a class-action suit is impossible, said co-lead counsel Brad Seligman, every one of Walmart’s female employees “potentially have the right today to file individual claims of discrimination with the United States Equal Opportunity Commission, or to file individual lawsuits.” Over the years, he said, he and his fellow attorneys have heard from more than 12,000 Walmart employees, who each had a story of bias. “There are thousands of claims of discrimination that remain to be filed,” said Seligman.

But it’s no easy thing for individuals to take on behemoths like Walmart alone. When challenged about workplace discrimination, said Greenberger, companies often will try to show that the employee in question was simply subpar. It’s much harder to argue that all female employees are inferior. “If you can’t provide that broader base of comparison, because you can’t bring a broad-based class action, it undermines the ability of even individual women to bring their cases,” she said. In other words, it wasn’t just the women of Walmart who lost on Monday.