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9th Circuit: Largest Title VII Class Certification in U.S. History Revised

By Chris Arbery and Paul Sherman   12/28/2007
 

A divided panel of the 9th U.S. Circuit Court of Appeals tweaked its decision upholding the certification of the largest Title VII plaintiff class in U.S. history. The class initially consisted of approximately 1.5 million female current and former Wal-Mart employees who allegedly suffered from gender bias in pay and promotions, and now is only slightly smaller.

Wal-Mart sought a rehearing of the 9th Circuit’s February 2007 certification ruling, primarily arguing that the three-judge panel had erred in affirming class certification because the size of the proposed class, which includes employees who had worked at different stores, at different periods of time, in different positions and under different managers, made it impossible for the plaintiffs to show the existence of common questions of law or fact.

On Dec. 11, 2007, however, the same three-judge panel of the appellate court issued a revised opinion that mostly upholds its earlier decision.

The majority of the 9th Circuit panel again concluded that the plaintiffs’ evidentiary sharing, which consisted of statistical information, company policies and practices regarding decentralized decision-making, and expert testimony regarding “social framework analysis,” was sufficient to meet the procedural requirements for class certification. It reached this conclusion despite the obvious concerns over manageability and proof where literally millions of decisions are challenged in one action.

A key factor in the decision was the majority’s acceptance that the principal form of relief sought by the plaintiffs was “declaratory and injunctive” rather than monetary. Although Judge Kleinfeld argued in dissent that obviously “billions of dollars are going to predominate over words,” the other two judges making up the majority characterized the monetary relief sought by the plaintiffs as secondary to their efforts to change how Wal-Mart makes employment decisions. However, because the class initially certified included many individuals who no longer worked at Wal-Mart when the action was filed in 2001, the panel concluded that those individuals (perhaps as many as 200,000) did not have standing to pursue claims for injunctive relief and would have to be dropped from the class.

Judge Andrew Kleinfeld, who disagreed with the majority in the panel’s original February opinion, again dissented in the revised decision. Kleinfeld was not persuaded by the theory that Wal-Mart’s practice of delegating discretion to store-level managers by itself was evidence of a common pattern of discrimination. At most, he reasoned, such a contention merely showed that individual employment decisions were “vulnerable” to sex discrimination, but “ ‘[v]ulnerability’ to sex discrimination is not sex discrimination.” Kleinfeld instead would have required a more substantial evidentiary showing of a corporate practice of discrimination to establish the necessary element of commonality between proposed class members prior to certification.

Dukes v. Wal-Mart Inc ., 9th Cir., No. 04-16688 (Dec. 11, 2007).

Professional Pointer: Should the decision stand, and especially if its reasoning is adopted by other courts across the nation, employers may find themselves targeted by class action discrimination suits which are not supported by any evidence of actual discrimination but are based solely on the existence of a decentralized management structure.

Chris Arbery and Paul Sherman are attorneys on the Employment Law Team at Hunton & Williams LLP in Atlanta.

Editor’s Note: This article should not be construed as legal advice.

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