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In what can be considered as a significant victory for businesses, the U.S. Supreme Court on Monday handed a favorable decision for retail giant Wal-Mart in a class action lawsuit that alleged discrimination against female employees.
The plaintiffs in Wal-Mart Stores Inc v Dukes et al originally filed the suit in 2001, claiming that they were never considered for promotion because of their gender. The plaintiffs also claimed that they were aid less than their male counterparts, which is why they were also seeking a backpay.
A district court had granted certification to the class of around 1.5 million female employees after finding that they have fully satisfied the Federal Rule of Civil Procedure 23(a).
The court also held that they were also able to satisfy requirement in Rule 23(b)(2)’s of showing that “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.”
This was further affirmed by the Ninth Circuit Court of Appeals, concluding that Rule 23(a)(2)’s commonality requirement was met by the plaintiffs. The court also held that the plaintiff’s claims for backpay could be certified as part of a (b)(2) class since those claims did not have power over requests for declaratory and injunctive relief.
The appellate court also held that the class action can be “manageably tried” without depriving Wal-Mart of its right to bring forth its statutory defenses. This is in case the district court chose a random set of claims for valuation and then extrapolated the value and validity of untested claims from the sample set.
This ruling was reversed by the high court and held that the lower courts erred in certifying the class action.