For employers, the Supreme Court’s June 20 ruling in Dukes v. Wal-Mart Stores was a decisive win. The decision in the closely watched sex discrimination case makes it substantially harder to certify a big class under Title VII, making it particularly important for large, nationwide employers.
The plaintiffs contended that Wal-Mart’s policies and practices resulted in discrimination in compensation and promotion against its women employees nationwide. But the high court found that the U.S. District Court for the Northern District of California in 2004 improperly certified the class estimated at 1.5 million current and former female Wal-Mart employees. That district court certification was upheld by a 9th Circuit panel in 2005 and a 6-5 en banc decision in 2010.
The case is expected to have widespread impact on class actions brought under Title VII and collective actions brought under the Fair Labor Standards Act (FLSA). But employment defense attorneys caution against expecting the risk of class actions to disappear.
“The Supreme Court’s decision repositions the goal posts on the playing fields of how workplace class actions are structured, defended and litigated,” says Gerald Maatman, a partner at Seyfarth Shaw. “But I don’t think it will end the game. Employers are fooling themselves if they believe class actions are gone.”
Maatman suggests Dukes will reduce the number of plaintiffs’ firms focusing on large discrimination class actions. Such cases are expensive for plaintiffs firms, usually requiring the hiring of one or more experts to testify at the certification stage at a cost of $250,000 to $1 million, according to Maatman. With the higher hurdles for certification required post-Dukes, Maatman says, “not as many plaintiffs firms will be willing to make that investment.”