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Supreme Court Sides with Wal-Mart in Sex Discrimination Class Action

David G. Savage

WASHINGTON — The U.S. Supreme Court on Monday threw out a huge class-action lawsuit against Wal-Mart Stores Inc. that contended the retail giant had systematically discriminated against 1.5 million of its female workers.

By a 5-4 vote, the high court said the suit could not go forward as a class-action claim because the plaintiffs could not show Wal-Mart had a common policy of discriminating against women. Instead, the company allowed individual store managers to decide on pay levels and promotions, the justices said.

The ruling is not only a victory for Wal-Mart, but is also likely to shield large employers from similar claims that rely on statistics that may suggest bias based on the race or gender of employees. Had civil rights lawyers succeeded in the case, they had hoped to bring other suits against large employers who allegedly relegate women or minorities to lower-paying jobs.

"In a company of Wal-Mart's size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction," said Justice Antonin Scalia. Because class actions are suitable for resolving disputes that turn on a common issue, this lawsuit cannot go forward, Scalia said.

While the court's liberals disagreed on this point, they agreed with Scalia that the class-action claim was flawed because it sought individual awards of back pay for the women. All nine justices said this class-action suit could not seek monetary damages for the women workers.

Scalia's opinion strongly suggested that such claims cannot proceed as a single class-action suit unless the plaintiffs can point to a company policy of discriminating against certain employees.

In a partial dissent, Justice Ruth Bader Ginsburg said there was enough evidence of systematic sex discrimination to allow the suit to proceed, though not for damages. "Women fill 70 per cent of the hourly jobs in the retailer's stores, but make up only 33 per cent of the management employees," she wrote. "The higher one looks in the organization, the lower the percentage of women."

Giving managers a free hand to make pay decisions could lead to discrimination, she added. "Managers, like all humankind, may be prey to the biases of which they are unaware," she said. Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined Ginsburg in saying the suit should have been allowed to proceed, even if it would not likely lead to money damages for individual employees.

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