Wal-Mart victory in Supreme Court case seen as big win for U.S. businesses

AP/CBS

Wal-Mart
AP/CBS

In one of the most closely-watched cases of the Supreme Court's current term, the justices have delivered a huge victory to businesses trying to fend off costly class action lawsuit filed by employees.

It says lower courts were wrong to certify a class action in a case brought by a handful of women workers who accused Wal-Mart of discriminating against them as part of a company-wide policy of bias against females.

"It's a win for the company, but also for other big companies who face potential class action cases like this one," says CBS News Senior Legal Analyst Andrew Cohen. The U.S. Chamber of Commerce is even more emphatic, declaring the ruling to be "without a doubt the most important class action case in more than a decade."

Betty Dukes originally brought this workplace discrimination case, potentially the largest one of its kind in history. She worked in the Wal-Mart in Pittsburg, California and says she was passed over for promotion time and time again, while males moved up the ladder.

Other women joined her, including Chris Kwapnoski, who claims when she asked her bosses how to get promoted, one told her "to blow the cobwebs off my makeup and to doll up."

Joseph Sellers, one of their lawyers, told the court, "gender stereotypes were used," and that the women needed a class-action lawsuit to challenge "company-wide practices which discriminated against women in every one of the regions in which the company does business."

The Supreme Court determined the various claims could not be brought together into one large suit. In a key part of the ruling, the court made it clear workers in class actions must be able to prove they have common circumstances.

"One of the myths of this case I think has been shattered, that this was some common experience," says attorney Ted Boutros, who represents Wal-Mart.

He says "the court expressly notes that Wal-Mart's policies forbid discrimination, and that the plaintiffs evidence and claims were 'worlds away' from showing the kind of general policy of discrimination they were required to show to meet the class action rules."

Marcia Greenberger of the National Women's Law Center says the decision leaves her with "deep disappointment and concern." She predicts it will "make it so much more difficult for women and others who face discrimination to hold employers accountable."

She agrees with the supporters of the ruling that the Supreme Court set a new standard for bringing class action cases. Michael Droke, an expert on labor and company law at Dorsey and Whitney in Washington, DC, calls it "a terrific decision for employers."

Droke says it frees companies to delegate decisions down to the "shop-floor level" without fearing they will be tarred with accusations of carrying out company-wide bias policies when an individual goes too far. "It helps prevent the use of the class action to attack those kinds of individual decisions."

Dukes, the lead plaintiff, vows to keep fighting. "If it takes us to go one step at a time, one woman at a time, we will march forward," she says, emphatically. But many experts believe the high court's decision will make it extremely difficult for them to prevail. And Wal-Mart and other businesses will be far less willing to settle individual discrimination claims.

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