Supreme Court: Too Many Women at Walmart To Have Any Class (Action)

The Supreme Court dismissed a class-action suit against Walmart (WMT), the nation's largest private employer, because the class -- women -- was too numerous. What?

Justice Antonin Scalia wrote:

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.
Yes, it is unbelievable this would happen -- unless you have absolutely no knowledge of American history. Did businesses really have to put out explicit orders not to hire African-Americans or Asians or whomever else wasn't considered acceptable? In 19th century Boston some businesses put up signs reading, "No Irish Need Apply." By Scalia's logic, the ones that didn't hang that sign and yet wouldn't hire Hibernians were engaged in systematic coincidence.

Contradictory claims... or are they?
The ruling came in a suit filed by six women who claimed they and colleagues across the country were victimized by Walmart's practice of letting local managers make subjective decisions about pay and promotions. Had the suit been successful Walmart could have faced billions of dollars in penalties.

I have no idea whether or not Walmart discriminated against women. The plaintiffs said at the time they filed the suit (2001) women held just 14 percent of store manager positions compared with more than 80 percent of lower-ranking supervisory jobs that are paid by the hour. Walmart, on the other hand, said women made up two-thirds of all employees and two-thirds of all managers in 2001.

It is worth noting that whether or not these two claims are contradictory depends entirely on the definition of the word manager. If the "lower-ranking supervisory jobs that are paid by the hour" were qualified as managers then it is entirely possible that two-thirds of all managers were women.

It's also worth noting that this could still be a result of discrimination that may not have been explicitly ordered by the company yet which the company could have had a responsibility to prevent. Those are the kind of issues that something a trial would determine.

If you're going to wrong people, make sure it's a lot of people
Instead we get a decision which indicates that if you are going to harm a group of people, make sure that group is really, really, really big.

This is supported by one of the arguments Walmart made against the legality of this suit. To wit: Allowing the suit to proceed as a class action would open the floodgates for similar suits and force big firms to settle even meritless claims because the potential legal liability was too great.

Translation: "Your honors, if this goes a head a lot of other people might sue too and we really don't want to have to rely on the legal system if that happens."

Walmart was hardly alone in making this case. More than 20 companies supported it at the Supreme Court, including Intel (INTC), Altria Group (MO), Bank of America Corp. (BAC), Microsoft (MSFT) and General Electric (GE).

By the way, right now units of Cigna (CI), Goldman Sachs (GS), Bayer, Toshiba, Publicis Group, Deere and Costco (COST) all face gender discrimination complaints seeking class action status. Undoubtedly all are cases of systematic coincidence and in no way reflective of any ongoing and pervasive bias against women.

Your witness.

Photo: WikiCommons
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