This week, in Wal-Mart Stores, Inc. v. Dukes, the United States Supreme Court unanimously rejected a class action sexual discrimination suit brought by approximately 1.5 million former and current female Wal-Mart employees. 
The plaintiffs claimed that even though Wal-Mart had a policy against discrimination, it gave its managers too much discretion, which allowed them to favor men. To support the largest class action in the history of employment law, they relied on (1) statistical evidence allegedly showing that Wal-Mart promoted fewer women than its nationwide competitors, (2) the testimony of a sociology expert, and (3) the declarations of a handful of female employees.
Wal-Mart's policy did, in fact, allow discretion by local supervisors over employment matters. But the Court found that this was a perfectly reasonable method of doing business, and did not, by itself, suggest discrimination.
The Court found that the statistical evidence did not hold up - in 90 percent of the stores, no evidence of discrimination existed - and more importantly, held that mere statistics are not enough. A particular discriminatory practice must also be identified. The expert - who claimed that Wal-Mart's corporate culture made it "vulnerable" to gender bias - admitted he could not say whether 0.5% or 95% of Wal-Mart's decisions were affected by gender discrimination. And the small sample of declarations submitted were miniscule compared to the 1.5 million member class.
The Wal-Mart decision is one of the most significant employment law rulings of the past twenty years, and is good news for employers. It also provides some practical lessons for employers:
- Create and distribute a strong anti-discrimination policy, and train all employees - especially mangers -- on the policy;
- Review pay, promotion, performance review, and other policies to ensure that they can be applied fairly to all employees, regardless of race, sex, religion, and other protected characteristics;
- Ensure that managers are given discretion to evaluate performance on a case-by-case basis;
- Keep performance evaluations objective, relying on specific, job-related factors only;
- Use job descriptions to assist managers in evaluating performance; and
- Provide procedures for employees to report discrimination, such as open door policies and internal grievance procedures.
