The authors discuss steps that employers can take to limit their exposure to claims of gender-based pay and promotion discrimination.
reventing and defending claims of gender-based pay and promotion discrimination is fast emerging as the latest challenge for employers seeking to reduce litigation risks. That these claims could be “the next big thing” is clear from recent jury verdicts, pending legislation in Congress, and headline-grabbing court decisions. For example: • The Ninth Circuit afﬁrmed class action certiﬁcation of the largest gender-discrimination class in the country’s history based on Wal-Mart’s allegedly discriminatory subjective pay and promotion practices; A jury in the Southern District of New York found Novartis Pharmaceutical Corporation liable for three class-wide issues of pay, promotion, and pregnancy discrimination in a suit brought on behalf of 5,600 female sales employees, and subsequently awarded the plaintiffs $250 million in punitive damages; and President Obama has emphasized that closing the wage gap is a central initiative for his administration and both the president and Congress are promoting legislation, including the Paycheck Fairness Act, in an effort to close the wage gap.
These court decisions and legislative initiatives raise the specter of a ﬂood of class claims against employers for pay and promotion discrimination. There are, however, steps employers can take to minimize their risks.
Fred W. Alvarez is a partner at Wilson Sonsini Goodrich & Rosati, where he heads the ﬁrm’s employment law litigation practice. Allison Moser is an associate with the ﬁrm. The authors can be reached at firstname.lastname@example.org and email@example.com, respectively.
Vol. 36, No. 3, Winter 2010
Employee Relations Law Journal
Gender-Based Pay and Promotion Discrimination
THE LARGEST GENDER-DISCRIMINATION LAWSUIT IN US HISTORY: DUKES V. WAL-MART On April 26, 2010, the US Court of Appeals for the Ninth Circuit afﬁrmed in large part a district court’s certiﬁcation of an employmentdiscrimination class action involving at least 500,000 (and potentially 1.5 million) female Wal-Mart employees alleging gender bias in pay and promotions in violation of Title VII of the Civil Rights Act of 1964. The class encompasses both salaried and hourly employees in positions ranging from a salaried store manager to an hourly personnel clerk, demonstrating that “mere size does not render a case unmanageable.” The case, Dukes v. Wal-Mart Stores, Inc. (Dukes), is the largest genderdiscrimination lawsuit in US history, and increases the likelihood that similar actions will be ﬁled against employers nationwide. In reaching its decision to certify the class, the lower court held that Wal-Mart’s pay and promotion decisions were largely subjective and made within a broad range of discretion by store managers (“a common feature which provides a wide enough conduit for gender bias to potentially seep into the system”). The Ninth Circuit subsequently afﬁrmed the trial court’s ﬁnding, based on an adverse impact theory, where the allegedly discriminatory practice was the decentralized decision-making process and “excessive subjectivity” regarding pay and promotions. Ironically, despite the discretion Wal-Mart’s managers had in making pay and promotion decisions, the court found that the subjectivity involved in the decision making supported commonality ﬁndings. It did so because the discrimination the plaintiffs claim to have suffered occurred through a consistent corporate policy (i.e., “excessively subjective decision making in a corporate culture of uniformity and gender stereotyping”), as demonstrated by anecdotal and statistical evidence and expert testimony. The consequences of the Dukes decision are signiﬁcant: • • Subjective pay and promotion practices are more likely to be...