By Frank Harty
The Nyemaster Labor & Employment blog aims to keep our friends and clients apprised of legal developments that directly impact how employers manage their workplaces. On June 19, 2011, the United States Supreme Court issued its much anticipated decision in a class action that has been pending for a decade. The Dukes v. Wal-Mart decision really does not offer any insight that would justify an employer reevaluating its workplace policies or practices. Nevertheless, because the decision has been widely publicized and because it will favorably impact many of Nyemaster's clients, the decision warrants discussion.
The plaintiffs in Wal-Mart sought to challenge the retail giant's allegedly discriminatory pay and promotion practices with a class of 1.6 million women – a number greater than the combined population of North Dakota and South Dakota. The plaintiffs in Wal-Mart alleged that the company's policy of giving substantial discretion to local decision makers resulted in systematic discrimination against women. The majority of the court held that the lower court erred when it certified the massive class. The Supreme Court held that, absent a showing of some uniform policy or practice, the plaintiff class could not satisfy the requirements of Federal Rule of Civil Procedure 23, which dictates that the claims of plaintiffs in a class action be sufficiently common to justify being tried in a single action. The court determined there was no common practice or policy that served as the "glue" to hold the class together. The court also held that the lower court erred when it granted class status based on the class's back pay claim under a portion of the class action rules that allow for class treatment of claims for equitable or declaratory relief.
Some critics have decried the Wal-Mart decision as a major setback for advocates of workplace rights. We see the Wal-Mart decision as the logical extension of an Iowa truism: pigs get fed and hogs get slaughtered. By attempting to amass a class of monstrous proportion, plaintiffs' lawyers gambled and lost. They as much as admitted their strategic error when, the day after the decision was announced, the team of plaintiffs' lawyers promised to regroup and resume the attack using smaller classes based on metropolitan or regional geographic lines.
The Wal-Mart decision does not dictate any specific changes in the way employers manage the workplace. Iowa employers should, however, be advised that the Iowa counterpart to the federal rule applied in Wal-Mart may be subject to different interpretation. Iowa courts may be able to apply a more lenient test in determining whether the commonality element is satisfied when plaintiffs are seeking to certify a class action.