What the Wal-Mart Ruling Means (A Commentary)

By Tré Kitchens
Originally printed in Arkansas Business

I  don’t know about you, but on June 20, I could have sworn I heard an odd sound emanating from Bentonville, although it very well may have been coming from all of corporate America.

I think it was the sound of bells ringing and CEOs cheering as the U.S. Supreme Court handed down a decision that basically told the American people that some companies are just too big to be held accountable. The court ruled that size matters. The very first sentence of Justice Antonin Scalia’s 26-page single-spaced opinion was: "We are presented with one of the most expansive class actions ever."

For those of you who have no idea what I’m talking about, I’m referring to last week’s decision by the Supreme Court to turn away a class-action lawsuit brought by more than 1 million women against the nation’s largest employer, Wal-Mart. And while it was certainly a blow to those women, the implications are disastrous for anyone in this country attempting to hold a large, powerful corporation accountable in a court of law.

In the Wal-Mart case, female employees claimed that the company had systematically discriminated against them by promoting men more often than women for managerial positions. However, the court held that "[m]erely showing that Wal-Mart’s policy of discretion has produced an overall sex-based disparity does not suffice." Remember the old saying "numbers don’t lie"? Well, they apparently do to this court, because the justices handed down their ruling in defiance of the statistical evidence.

An easy way to describe what happened in this ruling is to use a baseball analogy. If this case were a baseball game, with one team being the plaintiffs and the other the defendants, the batting team, in this case the female employees, would have just been told they could not step to the plate to take their swing. We don’t know how well they would’ve played because they weren’t given the chance to do so. Oh yeah, and it also sent the message that any future batters need not step to the plate.

What many people don’t realize is that class-action lawsuits are one of the most important tools that individuals have when challenging major corporate interests, e.g., Wal-Mart. An individual claim of discrimination or wrongdoing may have little or no impact on a billion-dollar company’s bottom line and consequently its behavior. However, if you take that individual case and combine it with hundreds, thousands – or in the case of the Wal-Mart lawsuit, more than a million – then you are going to get that company’s attention.  

Class-action lawsuits (and lawsuits in general) are about responsibility and holding wrongdoers accountable for their actions. If someone were to walk up to your house and throw a brick through the window, you would expect that person to be held accountable for his actions. You’d want him to pay for what he did and want to ensure that he did not do it to anyone else.

Now imagine how you would feel if someone told you that you were out of luck because that brick thrower was a billionaire and simply couldn’t be bothered with being held accountable. You’d feel angry, right? Well, in a way, last week’s ruling did just that for the million-plus women alleging discrimination. They were told that they could not join together in one powerful entity to stand up to the nation’s largest private employer (another observation by Justice Scalia) and would instead have to fight the company in small groups or as individuals.

So the question becomes this: How much of an impact will those individual employees have on the largest employer in the country? Probably very little. And that’s exactly what Wal-Mart wanted. And if you don’t believe me, just lean your ear toward northwest Arkansas, and I bet you can still hear those bells.          

June 27, 2011

Tré Kitchens, immediate past president of the Arkansas Trial Lawyers Association, is a lawyer with the Brad Hendricks Law Firm of Little Rock