The United States Supreme Court issued its much-anticipated decision yesterday in Wal-Mart Stores, Inc. v. Dukes, de-certifying a potential class of 1.5 million female employees and former employees of Wal-Mart.
Background of Case
The plaintiffs allege that Wal-Mart discriminated against women in violation of Title VII of the Civil Rights Act of 1964. They seek injunctive and declaratory relief, punitive damages, and backpay on behalf of a putative class of 1.5 million female employees and former employees of Wal-Mart. The plaintiffs claim that local Wal-Mart managers exercise their discretion over employees' pay and promotions in a manner that benefits male employees and has a disparate impact on female employees, and that Wal-Mart's refusal to limit the local managers' authority amounts to disparate treatment of female employees. The District Court (N.D. Cal.) certified the plaintiff class, and the Court of Appeals (9th Cir.) substantially affirmed, concluding that the plaintiffs had satisfied Fed. R. Civ. P. 23(a) and 23(b)(2).
Supreme Court's Decision
In a portion of the case decided unanimously, the Court held that the plaintiffs' claims for backpay were improperly certified under Rule 23(b)(2) because the claimed "monetary relief is not incidental to the [claimed] injunctive or declaratory relief." The Court held that "claims for individualized relief (like the backpay at issue here) do not satisfy the Rule" because "Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class."
In a portion of the case decided by a 5-4 margin, the majority opinion defined the "crux" of the case as Rule 23(a)(2)'s requirement of "commonality-the rule requiring a plaintiff to show that 'there are questions of law or fact common to the class.'" The Court identified two methods through which a putative class of employment discrimination plaintiffs could establish commonality: (1) the employer's use of a biased testing procedure to evaluate employees; and (2) "[s]ignificant proof that an employer operated under a general policy of discrimination." The Court found the first method inapplicable, since Wal-Mart had no companywide testing procedure or evaluation method, but rather discretionary decision-making. Turning to the second method, the Court found "a general policy of discrimination" "entirely absent," citing Wal-Mart's policy forbidding sex discrimination. Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented from this part of the majority opinion, stating that resolving the plaintiffs' claims "would necessitate examination of particular policies and practices alleged to affect, adversely and globally, women employed at Wal-Mart's stores," and that Rule 23(a)(2) requires nothing more.
Impact of Case
The Wal-Mart decision makes it much harder to certify a Rule 23(b)(2) class where the class members are seeking backpay or other monetary damages that vary widely among them. The decision also is likely to curtail the availability of class actions for claims alleging that employers discriminate in pay, promotion, or other employment decisions where such decisions are not based on a uniform or specific policy.
Day Pitney Alert
Eric Sussman authored an article, "Conn. High Court Sheds Light on 'ABC' Test Application," which was published by Law360.
Patrick McCarthy and Christopher Stracco spoke about Project Labor Agreements on Friday, February 10, at the New Jersey Institute of Continuing Legal Education's Annual 2017 Redevelopment Law Institute at the Renaissance Woodbridge Hotel in Iselin, New Jersey.
On January 17, John DeSimone and Heather Weine Brochin presented a discussion about employment agreements and negotiation strategies at the NYU School of Medicine.
On October 10, James Bowers will share his personal perspectives on the History of Slavery and Race in South Carolina at UConn School of Law.
Michael Furey was quoted in an article, "The Biggest New Jersey Cases of 2016," which was published in Law360.
Michael Furey was quoted in an article, "NJ Panel Grills Hospitals Over Discovery In Horizon Row," in Law360. Day Pitney is representing five New Jersey hospitals in a lawsuit against Horizon Healthcare, relating to its new, multi-tiered health plan called OMNIA. Furey advocated on behalf of the five hospitals on Wednesday before a New Jersey appeals court that Horizon should turn over a consultant's report and certain agreements relating to how Horizon categorized hospitals under its controversial OMNIA Alliance program and the impact of OMNIA on the hospitals. These Tier 2 hospitals are alleging various claims, including breach of contract and citing concerns that being ranked in the lower tier of the program will cost them business. Horizon contends the sought-after materials, including a financial analysis, strategic alliance agreements and rate agreements between the insurer and OMNIA network hospitals, contain trade secret and confidential information. "If we're going to prove our hospitals should be Tier 1 alliance members, we need the documents and the information," Furey said.
Hartford, Conn., May 26, 2016 - Day Pitney LLP is pleased to announce that Employment and Labor attorney Albert Zakarian has been chosen as a Lifetime Achievement winner of The Connecticut Law Tribune’s second annual Professional Excellence Awards 2016. The Professional Excellence Awards 2016 recognize 28 lawyers, who were chosen from over 60 nominees, as either Lawyer of the Year or Lifetime Achievement recipients, according to The Connecticut Law Tribune. The Lifetime Achievement Awards honor "attorneys who have excelled over a career."
John McLafferty was quoted in an article, "Final overtime regulations less drastic than feared," in Massachusetts Lawyers Weekly. In the article, McLafferty discusses how the Department of Labor’s final revised federal overtime regulation will impact businesses. "The reality is that the rule made more people eligible for overtime; it didn’t create any obligation for employers to pay more overtime," he said. McLafferty added that the regulation’s impact on employees could have a wider effect on office culture and policies, which may affect a company’s ability to attract and retain workers. In addition, he noted that employers should take this opportunity to ensure that all of their employees are properly classified for overtime purposes.
Albert Zakarian has been chosen as a winner of The Connecticut Law Tribune's second annual Professional Excellence Awards. The awards recognize two dozen lawyers for outstanding service to the profession during their long careers. The publication received more than 70 nominations. Profiles of awardees will appear in the Law Tribune in May. An event will also be held in May to recognize the winners. More about the awards can be found here.