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June 21 2011

Wal-Mart Decision: A Victory for Women

Nicole Kurokawa Neily

Whenever a Supreme Court case is decided, there are winners and losers. But contrary to how some in the media are spinning it, the winners of Monday's Supreme Court decision in Wal-Mart v. Dukes are women - women employees, women investors, and women business-owners.

The Court's finding - that a "class" of workers must share a common question of law or fact - provides businesses with much-needed certainty on human resource policy going forward. Within bounds, corporations will be able to maintain flexibility at the local level, without being micromanaged out of fear of lawsuits. In turn, that certainty means that companies will be able to invest more resources on operations - not on lawyers. That's good news both for women who are looking for jobs, and for those who are hiring.

As the Cato Institute's Walter Olson points out, the plaintiffs sought "to establish that Wal-Mart's policy of decentralized manager discretion over pay and promotions is itself an unlawful practice because (they argue) it allows too wide a scope for (unconscious or otherwise) bias on the part of store managers, notwithstanding the company's adoption of overall policies banning sex bias."

By this line of reasoning, providing local branches with any autonomy whatsoever is tantamount to a corporate policy of encouraging discrimination - a concept that borders on ludicrous.

Writing for the majority, Justice Scalia stated, "The only corporate policy that the plaintiffs' evidence convincingly establishes is Wal-Mart's ‘policy' of allowing discretion by local supervisors over employment matters. On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business - one that we have said ‘should itself raise no inference of discriminatory conduct.'"

Discrimination is not, and never has been, an official Wal-Mart corporate practice; the opinion notes that "Wal-Mart's announced policy forbids sex discrimination, and as the District Court recognized, the company imposes penalties for denials of equal employment opportunity." Let's remember - sexual discrimination is illegal, and individuals who practice it are breaking the law. If someone does it, they remain liable. This case merely establishes that discrimination by one person, in one part of the country, doesn't mean that a systemic problem exists. Future discrimination cases must be more narrowly drawn. It's important to note that this case didn't try to establish whether or not the company systematically discriminated against women, but rather, whether or not hundreds of thousands of its female employees could be considered a "class" for legal purposes.

In addition, the majority found that the plaintiffs' use of statistics, questionable sociological research and anecdotes did not provide convincing proof that Wal-Mart had a company-wide discriminatory pay and promotion policy. Writing for the majority, Justice Scalia stated, "even if every single one of these accounts is true, that would not demonstrate that the entire company operates under a general policy of discrimination."

The big losers in today's Wal-Mart v. Dukes lawsuit are not women, but rather trial lawyers - who will be dissuaded from cobbling together future frivolous lawsuits on dubious grounds. Individual women who feel they are the victims of discrimination are still able to pursue their claims in court, and should certainly do so. Yet part of the message women should take from this ruling is that they should see themselves as individuals, not as a collective who is victimized by a company or society that is stacked against them.

Although it's being spun as a "blow to women," Monday's decision confirms that discrimination lawsuits must be narrow and relevant - and that trial lawyers can't terrorize companies in search of a big payday. That kind of message benefits all Americans.

Nicole Neily is executive director of the Independent Women's Forum.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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