Wednesday, March 30, 2011

Reading the tea leaves: The Dukes v. Wal-Mart oral argument

Today, the Supreme Court heard oral argument in Dukes v. Wal-Mart (transcript available here). Dukes will determine the propriety the certification of the largest sex-discrimination class action ever—a nationwide class of 1.5 million employees. I've previously covered the background of this case. If you have any doubts about the potential significance of Dukes, consider that 66 uninvolved businesses and lobbying groups filed 28 different briefs with the Court advocating for one side or the other. I’m not sure of the record for these filings, but Dukes has to be close.

According to Bloomberg Businessweek, “The suit, citing what are now dated figures from 2001, contends that women are grossly underrepresented among managers, holding just 14 percent of store manager positions compared with more than 80 percent of lower-ranking supervisory jobs that are paid by the hour.” According to Wal-Mart, however, the certified class “includes too many women with too many different positions in its 3,400 stores across the country. [I]ts policies prohibit discrimination and that most management decisions are made at the store and regional levels, not at its Bentonville, Ark., headquarters.”

In pre-gaming today’s oral argument, the Los Angeles Times not only framed the issues but also the importance of this case:

The court’s ruling could be the most far-reaching decision on job bias in more than a decade, according to experts on both sides. A win for [the plaintiffs] could open the door for the broader use of statistics to prove job discrimination—and not just on behalf of women, but also for minorities or persons with disabilities.

However, a win for Wal-Mart could deal a death blow to nationwide job-bias suits by ruling that employees who work in different stores and hold different jobs do not have enough in common to be a class.

Reading the tea leaves, I predict a resounding Wal-Mart victory at the Supreme Court. It is no surprise that given the political makeup of the Court, Justice Kennedy is the swing vote in close cases. As Justice Kennedy goes, so goes the majority. Thus, the following exchange between Justice Kennedy and the plaintiff’s lawyer signals that employees’ string of victories in employment cases may be coming to an end:

   Q: It’s not clear to me: What is the unlawful policy that Wal-Mart has adopted, under your theory of the case?

   A: Justice Kennedy, our theory is that Wal-Mart provided to its managers unchecked discretion in the way that this Court’s Watson decision addressed that was used to pay women less than men who were doing the same work in the same – the same facilities at the same time, even though – though those women had more seniority and higher performance, and provided fewer opportunities for promotion than women because of sex.

   Q: It’s – it’s hard for me to see that the – your complaint faces in two directions. Number one, you said this is a culture where Arkansas knows, the headquarters knows, everything that’s going on. Then in the next breath, you say, well, now these supervisors have too much discretion. It seems to me there’s an inconsistency there, and I’m just not sure what the unlawful policy is.

Suffice it to say that if the key vote on the Court does not fully understand the plainitffs’ argument, Wal-Mart is feeling pretty good about its chances right now.

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