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March 14, 2005

Killing Employment Class Actions

No, this isn't about the federal bill passed about class actions, it's about Wal-Mart (yes, they are everywhere) making a legal claim before the 9th Circuit that their constitutional rights would be violated if they had to defend against the 1.5 million women certified in a class action for sex discrimination by a lower court. Instead, Wal-Mart wants the case broken up into thousands of different cases for each store, dramatically undermining the economic feasibility of the suing the behemoth store.

When you get down to Wal-Mart's argument, their defense is that they hold managers to so little accountability that Wal-Mart as a whole can't be judged by each store's actions, so each one has to be sued individually despite nationwide statistics showing disparities between the treatment of men and women in promotion and pay.

And here's the great part of Wal-Mart's strategy. Women would have a hard time proving discrimination, since most never applied for promotion: Wal-Mart mostly uses a tap-on-the-shoulder" method of picking out promising people, so it would be hard to document particular points where women applied for job openings and were turned down.

It's a nasty game-- create arbitrary promotion policies in each store, then claim that each one is so screwed up in its own way that plaintiffs have to shoulder the burden of legal costs locally rather than in a nationwide class action.

Posted by Nathan at March 14, 2005 08:18 AM