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Washington - The US Supreme Court rejected a mammoth class-action lawsuit charging sex discrimination at Walmart stores on Monday in a ruling that could affect major cases in other industries.
The justices unanimously ruled that more than a million female employees nationwide could not proceed together in the lawsuit seeking billions of dollars and accusing Walmart of paying women less and giving them fewer promotions.
The Supreme Court agreed with the the world's largest retailer and the largest private US employer the class-action certification violated federal rules for such lawsuits.
It accepted Wal-Mart's argument that the female employees in different jobs at 3 400 different stores nationwide and with different supervisors do not have enough in common to be lumped together in a single class-action lawsuit.
The ruling, cheered by business groups as the most important class action case in more than a decade, was denounced by women's groups.
"Today, the Supreme Court issued a devastating decision undoing the rights of millions of women across the country to come together and hold their employers accountable for their discriminatory practices," said National Women's Law Center Co-President Marcia Greenberger.
It represented a major victory for Walmart, which has also faced other legal battles including an attempt to unionise and to block the giant retailer from opening stores in New York and other places.
"We are pleased with today's ruling and believe the court made the right decision. Wal-Mart has had strong policies against discrimination for many years," said Bentonville, Arkansas-based Wal-Mart.
Gisel Ruiz, a company executive vice president, said the ruling effectively ended the class-action lawsuit.
Theodore Boutrous, Walmart's lead attorney in the case, told reporters, "This decision will have a significant impact on other class actions."
The court rejected class-action status, but three remaining female plaintiffs still can pursue their individual claims.
Litigation doesn't end
Lawyers for the plaintiffs acknowledged the ruling raised substantial hurdles to bring such challenges forward, but warned that Walmart may regret this route because it could lead to lengthier litigation in many more courtrooms.
"I think it is a big win for very large companies because I think part of the message from the majority's decision is ... there are companies that are too big to be held accountable in a single forum for these kinds of practices," said Joseph Sellers, a lawyer for the women who sued the retailer.
He said they were considering options that included pursuing class-action lawsuits with smaller groups of women or proceeding individually, noting that more than 12 000 people have contacted them about discrimination at Walmart.
Two employees of Wal-Mart and its Sam's Club stores who were leading the class-action effort expressed disappointment with the ruling, but said that they would continue their claims against the massive retailer.
"We still are determined to go forward and we still are determined to present our case in court and I believe that we will prevail there," said Walmart employee Betty Dukes.
The ruling in the biggest business case of the high court's 2010-11 term could affect pending class-action lawsuits against the tobacco industry and Costco Wholesale Corp.
Employers cheer
Corporate defence attorneys said the ruling was a major victory for employers. "The decision pokes a big hole in the balloon of class actions for employment cases," said Michael Droke of Dorsey & Whitney LLP in Seattle. "Employers are literally breathing a collective sigh of relief."
Justice Antonin Scalia concluded for the court majority that the class was not properly certified.
"Because respondents wish to sue about literally millions of employment decisions at once, they need some glue holding the alleged reasons for all those decisions together," he said.
The court's four other conservatives joined all of Scalia's ruling. The court's four liberals joined part of it, but dissented in another part.
Large class-action lawsuits make it easier for big groups of plaintiffs to sue corporations and they have led to huge payouts by tobacco, oil and food companies.
Companies such as Walmart have sought to limit such lawsuits to individual or small groups of plaintiffs. The Supreme Court, with a conservative majority that often ruled for businesses, has rejected huge class-action lawsuits.
