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Thursday, September 29, 2011

Worst Decisions: A Tie for #1 - Wal-Mart v. Dukes

AFJ is counting down the 10 worst decisions of the Corporate Court's 2010-11 term. Yesterday at #3, we talked about Janus Capital v. First Derivative, which gives mutual-fund bosses "an easy way to skirt class-action lawsuits."

In our tie for the #1 slot, one of the contenders had an enormous and immediate impact on more than a million women in the workforce, and opens the door for discrimination on a massive scale.

Worst Decisions of the 2010-11 Corporate Court Term: #1 (tie) Wal-Mart v. Dukes

In Wal-Mart, the Supreme Court prevented more than a million women from banding together to pursue their case against the discriminatory practices of Wal-Mart management. The 5-4 majority rewrote the federal rule governing class actions by setting a higher “commonality” threshold for all plaintiffs. This will likely bar employees from seeking injunctive relief that previously only needed to pass an “easily satisfied” test.

The majority created new hurdles for disparate-impact cases, where subjective personnel decisions have led to widespread gender or racial disparities in the workforce, by holding that “proving a … disparity is not enough,” and rejecting plaintiffs’ overwhelming statistical evidence of widespread discrimination. The majority instead suggested that victims must prove that conscious and intentional discrimination by top management directs the employment decisions made below in order to obtain class certification. These nearly impossible standards will undermine the incentive for employers to set up objective pay and promotion practices based on published criteria and clear merit-based evaluations of applicants. These practices are very effective at combating the kind of discrimination that occurred at Wal-Mart, where job postings were non-existent and women had to wait for the “tap on the shoulder” (that mostly never came) from mostly male managers to be promoted.

The majority also elevated the company’s written non-discrimination policy to exalted status – despite a complete lack of evidence that it was followed – and assumed that “most managers in any corporation … would select sex-neutral, performance-based criteria for hiring and promotion.” The 120 affidavits from women being called “Janie Qs’” at executive meetings, being paid less than a just-hired 17-year-old boy because “you aren’t male, so you can’t expect to be paid the same,” or told to “doll up” and “blow the cobwebs off” make-up were dismissed as “prov[ing] nothing at all.”

Wal-Mart v. Dukes is the one of the worst decisions of the 2010-11 Corporate Court term because it will allow corporations to get away with discrimination as long as they discriminate on a massive scale.

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