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Monday, March 28, 2011

Wal-Mart Win in Dukes Case Would Empower Corporations to Steal Wages

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments.

Today we discuss why a denial of class certification would give Wal-Mart and other large corporations a free pass to unlawfully deny employees the wages they deserve.

If the Supreme Court limits access to a class action in this case, it will enable Wal-Mart to essentially rob its women employees of fair wages without serious legal consequences. In fiscal year 2010, Wal-Mart made $14 billion in profits on net sales of $405 billion. Individual sex discrimination lawsuits – even if hundreds were filed and successful – would not motivate Wal-Mart to address disparities in pay and promotions between men and women. Far from being a deterrent, a company as big as Wal-Mart would simply consider isolated awards as the cost of doing business.

A decision decertifying the Dukes class action would also make it more challenging for other plaintiffs to bring class actions, depending on the Court’s reasoning. For example, if the Court finds that the discrepancy in pay and promotion for women at Wal-Mart is not common enough to support a class action on this record, it will tend to exonerate large companies with lots of employees, managers, and outlets. A class action pending against Costco, to cite one case, may turn on the outcome of this case. Other employment discrimination class actions, where the bar is already high, may also become more difficult. Alternatively, if the Court finds that Betty Dukes and her class members cannot obtain back pay through the particular type of class action they have sought to certify, it will cripple one of the most effective remedies that class actions provide.

Proponents of greater restrictions on class action lawsuits claim that the suits are unnecessary because government agencies are responsible for enforcing workplace discrimination claims. Almost all workplace discrimination claims must first be filed with the EEOC before an employee may sue an employer. This, however, does not mean that the EEOC can do much about those claims. The EEOC received 99,992 workplace discrimination allegations in 2010 but filed only 271 enforcement actions in response. (By comparison, there are more than 860,000 women working at Wal-Mart today.) The agency has historically been underfunded and understaffed, resulting in a massive backlog of unresolved cases. As a result, the number of EEOC enforcement actions has decreased every year since 2004 despite the fact that 20,490 more discrimination claims were filed in 2010 than in 2004. Even under full staffing and funding, the EEOC would be woefully incapable of remedying even a small portion of workplace discrimination claims.

Class actions fill a void left by the inadequacy of individual lawsuits and government enforcement. The Supreme Court’s acceptance of Wal-Mart’s appeal in Dukes threatens one of the last remaining tools available to employees to protect themselves from discrimination.

Click here to read more about this landmark case and download AFJ's comprehensive analysis.


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