Even some justices who seemed sympathetic to the plaintiffs expressed qualms about how to administer a lawsuit involving as many as 1.5 million women seeking back pay that could amount to billions of dollars. Others appeared worried about the consequences for other businesses of a ruling that would allow the case against Wal-Mart to go forward.
The mere certification of a class-action suit can prompt defendants to settle in light of the sums at stake, and the justices struggled to find a way to distinguish between gaps in pay that might have benign explanations and those caused by unlawful discrimination.
The court of Chief Justice John G. Roberts Jr. has recently issued a series of rulings in favor of plaintiffs suing for employment discrimination that cut against the court’s pro-business reputation. The Wal-Mart case dwarfs those rulings in importance. It is the largest employment discrimination class action in history, and the court’s decision, expected by June, will probably be its most important business ruling this term.
The issue before the justices at Tuesday’s arguments was not whether Wal-Mart, the country’s largest retailer and biggest private employer, discriminated against women who worked there. For now, the question in the case, Wal-Mart Stores v. Dukes, No. 10-277, is whether hundreds of thousands of female workers have enough in common to join together in a single lawsuit.
The plaintiffs’ theory is that a centralized companywide policy gave local managers too much discretion in pay and promotion decisions, leaving Wal-Mart vulnerable to gender stereotypes. The plaintiffs have presented sworn statements and statistics to support their claim.
Wal-Mart calls that evidence unrepresentative and unreliable. The company says its policies expressly bar discrimination and promote diversity. In any event, the company says, the plaintiffs — who worked in 3,400 stores in 170 job classifications — do not have enough in common to warrant class-action treatment.
Justice Anthony M. Kennedy said the theory about how the company discriminated — through a central policy conferring local discretion — was internally inconsistent. “Your complaint faces in two directions,” he told a lawyer for the plaintiffs.
But Justice Stephen G. Breyer said Wal-Mart could be held accountable if it failed to take action in the face of reports of discrimination from its stores. “Should central management under the law have withdrawn some of the subjective discretion in order to stop these results?” Justice Breyer asked.
Justice Ruth Bader Ginsburg agreed, saying that companies had a responsibility to make sure that women were treated fairly in local workplaces. And Justice Elena Kagan said that “excessive subjectivity” may be a policy that violates the civil rights laws.
But Justice Antonin Scalia was unconvinced.
“I’m getting whipsawed here,” he told the plaintiffs’ lawyer, Joseph M. Sellers. “On the one hand, you say the problem is that they were utterly subjective, and on the other hand you say there is strong corporate culture that guides all of this. Well, which is it?”
Mr. Sellers responded that “there is this broad discretion given the managers” but that “they do not make their decisions in a vacuum.” Managers, he went on, “are informed by the company about how to exercise that discretion.”
That did not satisfy Justice Scalia. “If somebody tells you how to exercise discretion,” he said, “you don’t have discretion.”
Theodore J. Boutrous Jr., a lawyer for Wal-Mart, said the handful of women named as plaintiffs who seek to represent the entire class did not have typical experiences at the company.
“Each of the plaintiffs have very different stories,” he said. “One of them was promoted into a managerial position. One was terminated for disciplinary violations. One was promoted and then had a disciplinary problem and then was demoted.”
He added that “this class includes at least 544 store managers who are alleged to be discriminators and victims.”
Several justices had practical concerns.
“What seems to me a very serious problem in this case is, how do you work out the back pay?” Justice Ginsburg asked.
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