Wal-Mart discrimination case cannot really be a class action

Dukes v. Wal-Mart, a case claiming job discrimination against at least 1.5 million women, reached the U.S. Supreme Court last week after the 9th Circuit Court of Appeals in San Francisco agreed, in a 6-5 vote, to permit the case to go forward as a single class action.  

The media is portraying this as a dispute over how “large” a class action can be, but that is incorrect. There is nothing inherently wrong with a large class action. A class action is simply a procedural device meant to aggregate similar claims for purposes of efficiency.

One can even imagine an appropriate employment class action as large as Dukes. For example, if Wal-Mart had a nationwide policy that it would always pay women 20 percent less than men doing the same job, women would be equally affected by that policy and it would be a simple matter to try the case.

But the theory of the Dukes lawsuit is exactly the opposite — the plaintiffs claimed that Wal-Mart’s central office did not exercise enough authority over each of its 3,400 stores; each of the individual managers’ discretionary employment or promotion decisions, whether made by male or female managers, was on average discriminatory; and thus Wal-Mart was responsible for a policy that “fosters or facilitates” discrimination.

Wal-Mart says women have fewer management jobs because fewer women apply. Only an illegal quota would block such a legal theory if courts let it go forward.

One can quickly see why this does not work as a class action. In the words of professor Richard Epstein, the procedural tail is wagging the substantive dog. Discrimination laws permit Wal-Mart to defend itself by demonstrating that the challenged job decision was made for a reason other than sex.

For example, looking at named plaintiff Betty Dukes alone, we learn that she had a female manager and she was repeatedly disciplined for returning late from lunch breaks. Yet if a court ties together claims that are not alike, it will have trouble trying the case as a single class action — unless it pretends that the parts that are not alike are not part of the lawsuit. Wal-Mart is stripped of its defense because the individualized defense would be inconvenient to trying the case as a class action.

But that is precisely backward. If there are too many individualized issues to permit a defendant to defend itself adequately in a class action, that means the correct ruling is not to have a class action. If the Supreme Court rules in Wal-Mart’s favor later this year, it will not be to protect business, but to protect due process.

Theodore H. Frank is an adjunct fellow at the Manhattan Institute Center for Legal Policy.

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