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Employment Law Worldview

United States Supreme Court Limits Class Actions

Posted in Discrimination

In a landmark victory for employers, in Wal-Mart Stores, Inc. v. Dukes [pdf] the United States Supreme Court threw out a sweeping sex-discrimination lawsuit against Wal-Mart Stores Inc., ruling Monday that the 1.6 million women allegedly victimized had too little in common to form a single class of plaintiffs.  As Jess Bravin and Ann Zimmerman state in Justices Curb Class Actions “[t]he decision is sure to reverberate in other employment class actions, with lower courts scrutinizing more carefully the factors that constitute a class for the purpose of bringing mass claims.”

The plaintiffs in the case alleged that Wal-Mart discriminated against women and sought to certify a company-wide class.  The plaintiffs must identify a “specific employment practice,” such as a biased testing procedure, that unlawfully discriminates.  Writing for the majority, Justice Scalia wrote:  “Merely showing that Wal-Mart’s policy of discretion has produced an overall sex-based disparity does not suffice.”

So is this the end of employment class actions?  Although this decision will not stop employment class actions, it will halt the potential floodgates that could have opened had the Supreme Court ruled against Wal-Mart.  Keeping class actions limited and not company-wide is key to employers having a legitimate chance at fighting the claims as opposed to being forced to settle.