The U.S. Supreme Court issued an important opinion regarding class action lawsuits and employee rights in June 2011 in Wal-Mart v. Dukes. Many predicted that the use of class action lawsuits as a tool for enforcing employee rights would suffer a major setback in light of the court's decision, but many class action suits are continuing despite the ruling and the class action lawsuit remains a powerful mechanism for challenging corporate wrongdoing.
To paraphrase Mark Twain, reports of deaths can often be greatly exaggerated. The class action lawsuit is alive and well, even after the Wal-Mart v. Dukes ruling.
What the Court Held
The Court held in Dukes that the lower court improperly certified as a class all female employees of the retail giant from 1998 to the present. The Court reasoned that that there were not enough commonalities among the class members to justify suing Wal-Mart as a group for alleged sex discrimination in hiring, promotions and pay rates. The court cited Wal-Mart's stated policy of allowing managers at the company's over 4,300 stores substantial discretion in hiring and promotion decisions as evidence that there would be no common reason across all of the stores why women did not receive the same treatment as male employees.
Some commentators were quick to describe the Dukes decision as a big win for corporations. It seemed to them that employees would have to sue individually or in much smaller groups from now on and thereby be less of a threat to large corporations. But many class action suits asserting employee rights are still viable in the courts.
Class Actions Still Viable
For example, the day after the Court issued the Dukes decision, a federal judge in New York found that 600 employees of SimplexGrinnell, a division of Tyco International Ltd, could sue as a class on the claim that the company underpaid them. Less than two weeks after Dukes was decided, a federal judge in Florida ruled against Starbuck's Corp.'s motion to decertify a class of 700 employees in a suit regarding unpaid overtime. The same week, a federal judge in California also ruled against trucking company C.R. England Inc's motion to decertify a class of 1,000 drivers in their wage-and-hour class action suit, and a federal judge in Ohio upheld the class in a similar wage-and-hour suit against HCR ManorCare.
Plaintiffs' lawyers in these wage-and-hour cases cite both state employment laws and the Fair Labor Standards Act as justification for their suits, arguing that the Dukes holding does not apply to the facts of their cases. Allegations that a company violated state labor laws necessarily makes the potential class smaller than the national one at issue in Dukes. Moreover, cases alleging violations of the FLSA do not have as stringent requirements to meet for class certification as the Dukes class needed to meet, because the plaintiffs in that case brought suit under Title VII of the Civil Rights Act.
Common Action is Possible
Class action suits remain a viable option for employees looking to challenge business' actions. Some analysts have argued that bringing a class action suit is a way for employees to organize and bring grievances in an age of severely curtailed union activity in the U.S. Coming together as a class to sue an employer makes it worthwhile for employees to take action - otherwise the amount that each individual would recover for employment suits compared to what the cost of a lawsuit would make going to court prohibitively expensive. Additionally, very few lawyers would want to take these cases because the total amount of recovery would be less than what an attorney would invest in bringing the case to trial, so employees would have a difficult time getting legal representation.
Wal-Mart v. Dukes did not sound the death knell for the class action lawsuit in U.S. courts. Other less-publicized cases show that class actions remain an important vehicle for employees to challenge corporate wrongdoing and seek redress of grievances.
