On June 20, 2011, the U.S. Supreme Court fundamentally changed the certification analysis for large class actions. In a much-anticipated decision, the Supreme Court, in Wal-Mart Stores, Inc. v. Dukeset al., 564 U.S. ___ (2011), reversed the Ninth Circuit’s certification of a nationwide class of approximately 1.5 million current and former female Wal-Mart employees who alleged sex discrimination based on pay and promotions. In its decision, the Supreme Court raised the bar for plaintiffs seeking class certification, provided employers with a tool to fight class certification, and left appellate and district courts with the task of applying the Supreme Court’s post-Dukes standard.
Factual and Procedural History
The plaintiffs asserted claims against Wal-Mart Store, Inc. alleging sex discrimination under Title VII of the Civil Rights Act of 1964. Specifically, the plaintiffs alleged that women employed in Wal-Mart stores were paid less and received fewer promotions than men as a result of Wal-Mart’s corporate culture of gender bias and practice of giving local managers discretion to make pay and promotion decisions. The plaintiffs sought to certify a nationwide class of women who had been subjected to these allegedly discriminatory pay and promotion policies. The class sought injunctive and declaratory relief, punitive damages, and backpay.
The U.S. District Court for the Northern District of California certified the class. It found that the plaintiffs satisfied the requirements of Rule 23(a)(2) and 23(b)(2) of the Federal Rules of Civil Procedure. Wal-Mart appealed. On appeal, a divided Ninth Circuit, reviewing the decision en banc, substantially affirmed the district court’s decision concluding, among other things, that (1) the plaintiffs met Rule 23(a)(2)’s commonality and typicality requirements; and (2) their backpay claims were properly certified under Rule 23(b)(2) because those claims did not predominate over the declaratory and injunctive relief claims.
On June 20, 2011, the Supreme Court in a 5–4 decision reversed the Ninth Circuit’s decision and held class certification was inappropriate for two reasons. First, the plaintiffs did not satisfy Rule 23(a)(2)’s commonality requirement. Rule 23(a)(2) requires a party seeking class certification to prove that the class has common “questions of law or fact.” The Supreme Court found that proof of commonality necessarily overlapped with the plaintiffs’ merits contention that Wal-Mart engages in a pattern or practice of discrimination. However, the crux of a Title VII inquiry revolves around “the reasons for a particular employment decision,” Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 876 (1984), and the class sued for millions of employment decisions at once. The Supreme Court found this problematic: “[w]ithout some glue holding together the alleged reasons for those decisions, it will be impossible to say that examination of all the class members’ claims will produce a common answer to the crucial discrimination question.” Second, the Supreme Court held that the class members’ backpay claims were improperly certified under Rule 23(b)(2) because the claim for monetary relief was not incidental to the requested injunctive or declaratory relief.
Post-Dukes Appellate and District Court Decisions
Since the decision, numerous appellate and district courts have relied in whole or in part onDukes when deciding certification for employment class and collective actions. In fact, to date, a staggering 61 decisions, including three appellate decisions, have been rendered applying or at least recognizing the standards set forth in Dukes. These decisions are revealing and demonstrate that the landscape for employment class and collective actions has fundamentally changed in many respects.
On one hand, many courts have relied upon Dukes in whole or in part to deny certification or grant decertification: Bennett v. Nucor Corp., 2011 U.S. App. LEXIS 19395 (8th Cir. Sept. 22, 2011) (relying almost entirely upon Dukes and affirming the district court’s denial of certification in disparate impact and disparate treatment race discrimination case where the plaintiffs failed to demonstrate that the defendant’s supervisors exercised their discretion in a common discriminatory manner); Ellis v. Costco Wholesale Corp., 2011 U.S. App. LEXIS 19060 (9th Cir. Sept. 16, 2011) (vacating and remanding the district court’s grant of certification in gender discrimination case because, among other things, it failed to apply the “rigorous [commonality] analysis” required by Dukes); Stockwell v. City & County of San Francisco, 2011 U.S. Dist LEXIS 117234 (N.D. Cal. Oct. 11, 2011) (denying the plaintiffs’ renewed motion for certification in an age-discrimination-in promotion case under California law, and holding, in light of Dukes, that statistical evidence of disproportionate impact, standing alone, was insufficient to establish that the plaintiffs’ age discrimination claims could be proven on a class-wide basis); In re Taco Bell Wage & Hour Actions, 2011 U.S. Dist. LEXIS 109169 (E.D. Cal. Sept. 26, 2011) (relying on Dukes in part and denying certification to two sub-classes of employees asserting wage and hour claims under California law where, among other things, the plaintiffs’ claims did not satisfy the commonality requirement because of the need for individual inquiry); Crux v. Dollar Tree Inc., 2011 U.S. Dist. LEXIS 73938 (N.D. Cal. July 7, 2011) (reconsidering its decision in light of Dukes and decertifying a class of current and former store managers who claimed they were misclassified under federal and California state law as exempt employees); Morangelli v. Chemed Corp., 2011 U.S. Dist. LEXIS 73807 (E.D. N.Y. July 8, 2011) (post-Dukes, the court granted a motion for reconsideration of its order certifying a nationwide class of service technicians claiming, among other things, that the employer failed to compensate them for time spent maintaining vans and equipment); Groussman v. Motorola, Inc., 2011 U.S. Dist. LEXIS 134769 (N.D. Ill Nov. 15, 2011) (denying certification in an Employee Retirement Income Security Act breach of fiduciary duty case, and admonishing the plaintiffs for failing “to recognize” the recentDukes decision).
On the other hand, many courts have relied upon Dukes in whole or in part to grant certification or deny decertification: Easterling v. State Department of Corrections, 2011 U.S. Dist. LEXIS 134524 (D. Conn. Nov. 22, 2011) (denying the employer’s motion for decertification in a gender discrimination case, but acknowledging the changes to the scope of Rule 23(b)(2) certification as a result of Dukes); Espinoza v. 953 Associates LLC, 2011 U.S. Dist. LEXIS 132098 (S.D.N.Y. Nov. 16, 2011) (certifying a class of current and former employees of the defendant in a wage and hour case based on New York state law, and distinguishing Dukes by stating that the individualized questions regarding the number of hours worked and how much each employee was entitled to be paid goes to damages and not the common question of the defendant’s liability); Ramos v. SimplexGrinnell LP, 2011 U.S. Dist. LEXIS 65593 (E.D.N.Y. June 21, 2011) (certifying a class of current and former employees of a public-works contractor seeking prevailing wages and benefits under New York prevailing wage law, and holding that Dukes had little bearing on the decision because the plaintiffs had significant proof of the defendant’s conduct and there was little discretion or subjective judgment in determining an employee’s right to be paid prevailing wages);Martinez-Hernandez v. Butterball, 2011 U.S. Dist. LEXIS 112045 (E.D.N.C. Sept. 29, 2011) (denying decertification of a class of current and former production line employees at a single turkey processing plant who claim they were owed backpay and benefits for time spent donning and doffing, and distinguishing the case from Dukes because the case involved a uniform policy or practice of compensating employees based on their scheduled shifts); Williams-Green v. J. Alexander’s Restaurant, Inc., 2011 U.S. Dist. LEXIS 99373 (N.D. Ill. Sept. 1, 2011) (granting a motion for certification of class of all hourly employees in three Illinois branches of a restaurant who participated in a tip pool and claimed the restaurant violated state tip credit by retaining tips, thereby failing to pay minimum wage, and essentially ignoring Dukes’ detailed discussion of the requirement that a class-wide proceeding must generate common answers to the central issues of the case).
Impact and Implications
It is obvious that the Dukes decision has and will continue to impact employment class and collective actions across the country. Plaintiffs will now be forced to narrowly tailor their proposed class to make sure the class claims can be resolved by a common answer. Appellate and district courts are now reviewing the merits of putative class claims when evaluating class certification motions. While the Dukes decision will likely deter most plaintiffs from filing overbroad class actions against large employers, nationwide or otherwise, it probably will not affect the certification of smaller, more targeted employment class actions based on employment policies and practices that are specific and clearly establish a discriminatory effect on a class of individuals. Surely, employers will use theDukes decision to fight class certification on the basis that the members of the proposed class lack commonality. Additionally, employers will now, more than ever, have to review their practices because, as the Supreme Court warned in Dukes, corporate policies that give local supervisors broad discretion over employment matters in a largely subjective mannercould create issues.
Keywords: litigation, employment and labor relations, Dukes, class certification
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