Challenging an Employment Lawyer Re: The Supreme Court's Walmart Decision

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On Tuesday, Salon.com published commentary by Piper Hoffman, an employment lawyer, regarding the Supreme Court having squashed the WalMart class action lawsuit:

“On Monday, the Supreme Court sounded the death knell for Dukes v. Wal-Mart, the class action lawsuit accusing Wal-Mart of paying and promoting women less than similarly- or less-qualified men. “

I haven’t read the entire, lengthy, forty-two page judgment.  But I can make observations about the validity of the logic Piper uses, based on the information she provides.  Right?

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Let me make a few observations about some of Piper’s comments:

“One of the plaintiff’s central arguments was that Wal-Mart has a policy of leaving promotion and pay decisions to the discretion of individual managers, and that these managers have made discriminatory decisions.

If the women suing Wal-Mart had prevailed, every American employer would have been on notice that it is not enough to sit on their corporate hands and allow gender discrimination to take its natural course in this way.

Instead they would have had to make it their business to ensure that their managers treated women fairly. But the Court didn’t want that, as the majority feels that ‘allowing discretion by local supervisors’ is ‘a very common and presumptively reasonable way of doing business.'” 

Sit on their hands and allow gender discrimination to occur?

Should a company take extra measures to attempt to minimize gender discrimination?  Or should a company simply make employees aware of what the gender laws are? (Page 13 of the ruling: “Wal-Mart’s announced policy forbids sex discrimination”).

I don’t know. You’d have to create a cost-benefit analysis that, among other things, compares the cost of the extra efforts to the reduction in discrimination, if any.

But why does Piper say that the Supreme Court “didn’t want” American businesses to “ensure that their managers treated women fairly”?  She justifies her belief by implying that it’s not reasonable of management to allow hiring discretion by local supervisors.

Without presenting a cost-benefit analysis, how can Piper convince readers of this?

Off the top of my head, I can think of a few benefits of allowing hiring discretion:  Retail managers are close to the product and service, since they often roam the stores and/or work in the departments themselves.  Therefore, companies might be best served to be allow them to use their discretion in salary/promotion/hiring related matters (of course, they shouldn’t be allowed to gender discriminate).

If companies took extra measures, how would companies attempt to reduce gender discrimination?  They could review promotion and salary decisions after the fact.  But as I wrote earlier, it’s unclear whether the benefits of those measures would outweigh the costs.

Companies could also attempt to promote more females, to pay them more than they do currently.  If they implemented policies meant to do this, that would, by definition, override the total discretion given to managers.

By removing discretion from the hands of those close to the company’s products and services, they could dramatically reduce their effectiveness as a company!

I’m certainly not suggesting that these costs would necessarily outweigh the benefits of reduced discrimination.  I’m simply declaring that this is an extremely complicated topic that requires extensive analysis, analysis that would vary depending on several company factors, including its size and its proportion of males vs. females.

Piper continues:

“In his opinion for the majority Justice Scalia also announces, without citing any evidence, that most managers work carefully to avoid discrimination in their pay and promotion decisions when left to their own devices. That makes it all the more puzzling why the higher one gets in the corporate hierarchy in the U.S., the fewer women there are.”

Piper implies that, due to the progressively limited numbers of females in corporate positions, Scalia may be incorrect in claiming that “most managers work carefully to avoid discrimination…when left to their own devices”.

What’s puzzling about that logic?  If “most” managers work carefully to avoid discrimination, I’d say that it’s certainly plausible that enough managers could cause any discrimination that might cause the gender imbalance we see today.  Don’t you think?

Think about it in terms of the following example, hiring.  If only 10% of male managers prefer to hire males over females, they can impact the demographics of the company quite a bit if they discriminate unfairly against females not once, but several times!

Piper continues:

“One of Rule 23’s prerequisites is that ‘[o]ne or more members of a class may sue … as representative parties on behalf of all members only if there are questions of law or fact common to the class.'”

and

“The Court used this previously clear ‘common questions of law or fact’ requirement to thwart the Wal-Mart women by redefining the requirement beyond recognition. According to Justice Scalia, ‘common questions of law or fact’ now means that plaintiffs must ‘demonstrate that the class members have suffered the same injury.’ In no universe that I have visited do these two phrases require the same thing.”

How did Piper come to this conclusion?

Here is the text of the ruling:

On page 12, it provides text from another Supreme Court case, Falcon.  I’ve bolded some text, for emphasis:

“‘Conceptually, there is a wide gap between (a) an in-dividual’s claim that he has been denied a promotion [or higher pay]on discriminatory grounds, and his otherwise unsupported allegation that the company has a policy of discrimination, and (b) the existence of a class of persons who have suffered the same injury as that individual, such that the individual’s claim and the class claim will share common questions of law or fact and that the individual’s claim will be typi-cal of the class claims.’ Id., at 157–158.”

So, the Supreme Court mentions “common questions of law or fact”.

Continue:

Falcon suggested two ways in which that conceptual gap might be bridged. First, if the employer ‘used a biased testing procedure to evaluate both applicants for employ-ment and incumbent employees, a class action on behalf of every applicant or employee who might have been preju-diced by the test clearly would satisfy the commonality and typicality requirements of Rule 23(a).’ Id., at 159, n. 15. Second, ‘[s]ignificant proof that an employer oper-ated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and pro-motion practices in the same general fashion, such as through entirely subjective decision making processes.’ Ibid.

We think that statement precisely describes respon-dents’ burden in this case.

So, the court makes it clear that they they would accept evidence that the company operated under a “general policy of discrimination” or used “biased testing”!

I wouldn’t think that the court’s ruling means, as Piper wrote, that “plaintiffs must ‘demonstrate that the class members have suffered the same injury.'”

Instead, I interpret the court’s ruling to mean this:  Class members don’t need to prove that they, individually, were refused a raise or promotion as a result of their gender.  Instead, they need to merely show that the company used biased testing methods or operated under a general policy of discrimination!

Conclusion

I’d be curious as to how Piper Hoffman, an employment lawyer and blogger, would respond to the points I make!

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