It's the biggest legal threat that Wal-Mart has ever faced. The women of Wal-Mart have hung in for nearly 10 years, and now, thanks to the U.S. Supreme Court, they will have to wait at least another six months for justice to be done.
In the spring of 2001, six women sued Wal-Mart, charging the company with systematically discriminating against hundreds of thousands of female "associates" in Wal-Mart and Sam's Clubs nationwide. The court case became widely known as Dukes v. Wal-Mart, after the lead defendant, Betty Dukes. It also became known as the "Mother of all lawsuits" against the giant retailer.
On December 6th, at Wal-Mart's request, the U.S. Supreme Court agreed to review one facet of this case--the issue of what constitutes a 'class' of plaintiffs. The Supremes are not expected to rule on this case until June of 2011--roughly 10 years after the lawsuit was originally filed.
The case was began in the U.S. District Court for the Northern District of California in San Francisco. In June of 2004, a District Court judge ruled that the case could be certified as a class action lawsuit, and would cover all women workers at Wal-Mart from Christmas of 1998, to the present. As many as 1.6 million Wal-Mart workers went to the head of the class.
Wal-Mart appealed the 2004 decision to the 9th. Circuit Court in San Francisco. In early 2007, three judges from the 9th. Circuit Court knocked Wal-Mart back on its heels by upholding the lower court's ruling.
The media called the 2007 decision a "major setback" for the retailer. The Dukes case had metastasized into the largest gender discrimination case in American history. For that reason, Wal-Mart immediately announced that it would seek a rehearing before the 9th. Circuit, and would take this case to the U.S. Supreme Court if necessary.
The 9th. Circuit Court said that the lower court had the discretion to decide that class action status made more sense than "clogging" the federal courts with thousands of individual suits about the same issues. "Although the size of this class action is large, mere size does not render a case unmanageable," the federal court wrote.
Wal-Mart's argument that the size of the class was unwieldy for the company was rejected by the court. Wal-Mart also asserted that the rules of class action suits should not apply to them, because the retailer's 3,400 stores function as independent businesses, and the company as a whole does not discriminate against women. Wal-Mart's lead attorney in the case told reporters the ruling was "one step in what is going to be a long process. We are very optimistic about obtaining relief from this ruling as the case progresses."
The Impact Fund of California is one of the groups representing the women who filed the lawsuit. "What this shows is that no amount of PR or spin can avoid the day in court that is coming, and it's time for Wal-Mart to face the music," said the lead attorney for The Impact Fund.after the 2007 victory. "We're confident that the women of Wal-Mart will have their day in court." That was three years ago, and the music is still playing.
Last May, the court in California ruled on a 6-5 vote that Dukes could proceed as a class action lawsuit. In a legal footnote to its Annual Report, Wal-Mart explained, "If the company is not successful in its appeal of class certification...the resulting liability could be material to the company's financial condition or results of operations." In other words, Wal-Mart could lose billions on this one case.
Insurance underwriters are also carefully watching Dukes. "Corporate America and trial lawyers are anxiously awaiting a decision from the U.S. Supreme Court," said an article in the National Underwriter's Property and Casualty Insurance News. A spokesman for the Insurance Information Institute flatly stated: "This could be a dream come true for trial lawyers." "It could be detrimental to any corporation subject to any case that may involve claims that can be assembled into a class," said a spokesman for the Insurance Information Institute. "This would lower the bar on what constitutes a class." The insurance industry is warning underwriters to "batten down the hatches" if this "colossal employment class-action" is allowed to proceed.
Wal-Mart issued this terse four-sentence statement after the Supreme Court decision: "We are pleased that the Supreme Court has granted review in this important case. The current confusion in class action law is harmful for everyone -- employers, employees, businesses of all types and sizes, and the civil justice system. These are exceedingly important issues that reach far beyond this particular case. We look forward to the Court's consideration of the appeal."
If the U.S. Supreme Court denies class status, most of these women will never be able to pursue their gender discrimination claims individually. They will not have the money to retain and sustain legal help, and they will not have the stamina to spend another ten years fighting one-by-one against Wal-Mart's legal army. For these Wal-Mart workers, the case will be over if class status is denied.
It is very unlikely that this case will ever be tried in a courtroom on its merits. Wal-Mart and the plaintiffs have reportedly been in settlement discussions for many months, although neither side has confirmed that. Wal-Mart could wind up paying out billions if it loses the class-action lawsuit.
The U.S. Supreme Court has given Wal-Mart its one final chance to defeat its own employees. If the retailer loses this bet, it will move to settle the case, pay out its billions in wages, and admit to no wrongdoing. The dark cloud that has been hanging over Wal-Mart will either flood the company in waist-deep settlement costs, or blow away harmlessly.
But for the 1.6 million Wal-Mart workers who charge that Wal-Mart discriminated against them, the U.S. Supreme Court's decision to hear the case is just one more example of justice delayed. If these lower middle class women do not win class status in the spring, they will have wasted ten years of their lives fighting for gender equity against a corporation that stole their wages.
Al Norman is the founder of Sprawl-Busters. He has helped communities fighting big box sprawl since 1993, and is the Author of The Case Against Wal-Mart. His website is http://www.sprawl-busters.com