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Can A Business Be Too Big For A Class Action Suit?

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Can A Business Be Too Big For A Class Action Suit?


Can A Business Be Too Big For A Class Action Suit?

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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This is MORNING EDITION from NPR News. I'm Renee Montagne.


And I'm Steve Inskeep. Good morning.

Today, the United States Supreme Court takes on the biggest employment discrimination case in history. It involves one of the biggest retailers in history - Wal-Mart. Lawyers challenging the company say they represent one and a half million of Wal-Mart's current and former female workers. The justices will decide if Wal-Mart is too big to be sued in a single class action case. Here's NPR legal affairs correspondent Nina Totenberg.

NINA TOTENBERG: Everything about this case is too big, says Wal-Mart's lawyer, Ted Boutrous.

Mr. TED BOUTROUS (Attorney): They have brought a case that implicates 3,400 stores around the country, women at all different levels of the store, from the store managers to the entry level positions.

TOTENBERG: But lawyer Joseph Sellers, representing the women, counters that class actions were created to deal efficiently with large numbers of similar claims.

Mr. JOSEPH SELLERS (Attorney): The majority of the women in this class have held five jobs. These are cookie-cutter type jobs. So the fact that there may be multiple stores doesn't mean the jobs are any different.

TOTENBERG: Whoever is right, what's clear is that whatever the Supreme Court decides, it could be the most significant employment discrimination ruling in more than a decade. Large employers fear allowing the case to go to trial would open the door to similar suits against them.

Conversely, civil rights lawyers feel that a loss could make it practically impossible to deal with systemic discrimination because individual claims would simply be too small to attract a lawyer on their own.

The issue before the Supreme Court today is whether female employees as a group can be certified as a single class, suing Wal-Mart at a single trial. A federal judge, after hearing extensive preliminary testimony, certified the class to proceed to trial.

A federal appeals court by a 6-to-5 vote upheld that ruling, with one of the dissenting justices, Sandra Ikuta, declaring: Never before has such a low bar been set for certifying such a gargantuan class.

Ultimately the underlying issue is whether gender discrimination occurred on a large scale at Wal-Mart. When the women plaintiffs filed suit 10 years ago, their lawyers presented statistics showing that women were 65 percent of the lower-level hourly workforce, while only 33 percent of the management employees were women.

In addition, the plaintiffs' statistics showed that women overall were paid on average $1.16 an hour less than men in the same job, despite having more seniority, lower turnover rates, and higher performance ratings.

Wal-Mart sharply disputes these statistics, contending there is no pay difference between men and women at 90 percent of its stores, and that the company has a staunch policy against discrimination.

Both sides have examples to prove their point. On one side are the half dozen named female plaintiffs, like Christine Kwapnoski, suing on behalf of other similarly situated women. Kwapnoski is a 46-year-old divorced mother of two, who says, for example, that when she complained about a male employee with less experience getting more money...

Ms. CHRISTINE KWAPNOSKI (Plaintiff): I was told that one male had a family to support.

TOTENBERG: But, she notes, so did she. Back when this case started, she says, promotions were made on the basis of a, quote, "shoulder tap." Jobs were rarely posted, and friends, mainly men, promoted friends, mainly men.

To counter that picture, Wal-Mart trots out its vice president for human resources, Gisel Ruiz, who worked her way up from assistant manager trainee to store manager, then regional vice president in charge of 150 stores, ultimately to the job she now holds.

Ms. GISEL RUIZ (Wal-Mart): My experiences do not match up with the claims that the plaintiffs are making. And I'm not the only one. I'm not an exception.

TOTENBERG: Joseph Sellers, representing the plaintiffs, says that's always the case in class actions, that some class members have not been the victims of discrimination and they typically are excluded as the case proceeds.

He contends that while Wal-Mart had a policy against discrimination on paper, it gave so much discretion to managers at every level to determine pay and promotions that discrimination was rampant. Added to that, he claims, were sexual stereotypes promoted in all the company's management training sessions.

Wal-Mart contends that the theory on which this lawsuit was brought is both spurious and radical. Ted Boutrous notes that 20 other large American companies, from Microsoft to GE, have filed a brief in the case contending that if the large class here is certified to go forward, similar and potentially ruinous suits could follow elsewhere.

Mr. BOUTROUS: The plaintiffs swung for the fences here, and instead of seeking the normal kind of class action where you would bring it against a particular decision-maker or entity, they tried to come up with a theory that would allow them to ensnare major companies in these huge class actions that might cause them to be able to get a quick settlement.

Mr. SELLERS: Wal-Mart is a corporate outlier. And the policies that we were challenging have been abandoned by most companies decades ago.

TOTENBERG: Joseph Sellers, the lawyer for the women.

Mr. SELLERS: There is no large company exception to the civil rights laws. So for Wal-Mart to contend that somehow this case is too big and that therefore it can't be pursued is to try to carve out an exception for it and other large companies from coverage under the civil rights laws.

TOTENBERG: It may be difficult, however, to sell that view to a Supreme Court majority that's widely viewed as business-friendly.

Nina Totenberg, NPR News, Washington.

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