Alert: Supreme Court rejects class action against Wal-Mart

The U.S. Supreme Court has thrown out a proposal to lump together one and a half million current and former female employees as class action plaintiffs against Wal-Mart.  The lawsuit alleged that the company violated Title VII of the Civil Rights Act by discriminating in pay and promotions against female workers. To the company’s chagrin, the Ninth Circuit U.S. Court of Appeals approved the proposed lawsuit. The Supreme Court, reversing the Ninth Circuit, wrote that there wasn’t any “glue” holding together the claims—no consistent policy or practice, other than a decentralized approach to decision making. This type of class action was meant to be used in situations where a court’s ruling would resolve a disputed issue for the whole class at a single stroke (Wal-Mart Stores, Inc., v. Dukes et al., June 20, 2011).
 
Tips: Even though class action lawsuits are supposed to be more efficient than litigating claims one at a time, the sheer volume of potential claims can snowball a relatively minor dispute into a massive financial risk for an employer. This creates a very attractive carrot for plaintiffs’ attorneys.
 
One step you can take is to regularly review key policies with your managers and front-line supervisors, and make sure they communicate and enforce those policies. In the discrimination arena, applicant tests that have an adverse impact on a protected class are a perfect avenue for a class action lawsuit. Not only must you do your homework to prove the test is job-related and consistent with business necessity, but you also must ensure those administering the test follow the correct procedures. Many test publishers will defend their tests in court on your behalf, but if you deviate from their instructions, you’re on your own.
 
In the wage and hour arena, class action lawsuits are exploding in popularity. Typical problems include nonexempt employees clocking in early with no supervision or verification that the time was used for their own purposes; starting work early or staying late without marking it on their time sheets; working through lunch without being paid; and failing to take the required number of meal and rest periods under state law. Lax enforcement by just one supervisor can subject your company to a wage and hour claim. That liability balloons when you start multiplying the number of days of violations and the number of affected employees, making it potentially ripe for a class action lawsuit. Regularly remind your supervisors of their obligations to communicate the company’s rules and ensure wage and hour compliance.