A Year After Dukes, the Impact on Employment Law Still Shaking Out

Meghin Delaney

Corporate Counsel

07-24-2012

Just over a year ago, the U.S. Supreme Court rejected the expansive Title VII class action suit filed on behalf of 1.5 million female Wal-Mart employees in its 5-4 Wal-Mart v. Dukes decision. The Court ruled that the employees failed to prove a common, company-wide practice of discrimination to maintain their class claim. But as the decision reverberates across the country, there’s still not a clear long-term impact of Dukes on U.S. labor and employment law.

One immediate result, says Steven Suflas of Ballard Spahr, was that a lot of employers with other pending class-action suits filed reconsideration motions and, overall, were pretty successful.

In the first three months following the June 2011 decision, more than 90 district courts and a handful of circuit court decisions cited the case, often decertifying previously certified classes in wide range of areas, including product liability, environmental and mass tort cases, according to Snell & Wilmer attorneys M.C. Sungaila, Greg Marshall and Lindsey E. Martínez, writing in The Recorder (a sibling publication of Corporate Counsel).

Suflas, who is a labor and employment partner at Ballard and is the managing partner of the firm’s Cherry Hill, New Jersey office, says that even though employers were successful with reconsideration motions in the immediate aftermath, the Dukes ruling hasn’t eased worries for employers in the long run. “I don’t think that we have seen a tremendous drop off in the volume of class actions,” he says, “but the nature of what’s being filed has changed.”

Michael Burkhardt, a labor and employment partner in Morgan Lewis & Bockius’s Philadelphia office, agrees with Suflas about the number of claims being filed. “Some plaintiff counsel have filed the same types of claims, just dressed up a little bit differently, and there’s been a split of decision around the country about it,” he says.

But the ruling did help level the playing field for employers, Burkhardt notes: “It provided employers with a more rational and level playing field to defend these type of allegations, especially the broad sweeping nationwide claims.”

Plaintiffs have found ways to take the ruling from Dukes and adapt to it, according to Suflas. More cases are being filed in lower-level venues, such as state courts. That can end up favoring plaintiffs, as state court judges may not be as well-versed and well-equipped to handle the complexity of these issues. “It’s an additional factor the employers have to take into consideration,” he says.

In fact, some of the original Dukes plaintiffs have since divided their claims into regionally based cases in state courts. The outcome is unclear so far. “It’s hard to say if it’s working for employees to file in state courts, as it’s only been one year,” Suflas says, “but it’ll be interesting to see what happens in the Dukes cases themselves moving forward.”

One possibility is that the U.S. Equal Employment Opportunity Commission could get involved in by bringing a pattern of practice case forward against Wal-Mart instead of a class action suit, Suflas says. The commonality issue, which is what the court cited in rejecting the case, may not play as important of a role if the EEOC brings a pattern of practice case, Suflas says.

The EEOC is not held to all of the same standards as private plaintiffs, says Elizabeth Grossman, a regional attorney in the EEOC’s New York District Office. For example, if the EEOC were to bring litigation against Wal-Mart, the EEOC would not have to receive class certification.

The EEOC declined to disclose whether or not it was planning to be bring forth any type of litigation related to the Dukes case. But Grossman said that the ruling did not end up having any effect on pending EEOC cases.

The EEOC receives about 100,000 charges against employers from members of the public each year. The EEOC investigates or helps to mediate the charges. Eventually, the EEOC may litigate, in the interest of the public. “Mostly, the EEOC engages in a lot of litigation where there’s a nationwide or companywide policy and the fact of the policy is undisputed by the employer, and the litigation deals with the effect of the policy,” Grossman says.

From the point of view of the U.S. Chamber of Commerce, the Dukes ruling, while overall a win for employers, didn’t really change much. “Business still finds itself on the defense for class certification issues,” says Sheldon Gilbert, counsel and communications director for the National Chamber Litigation Center, the public policy law firm of the U.S. Chamber of Commerce.

Employers are now trying to get the Dukes decision to sit as precedent for other pending cases, Gilbert says, but it’s still too early out to see how courts will end up using—or not using—Dukes.

Gilbert notes that the upcoming Supreme Court term may provide clarification for employers and employers, as there are a few class action cases on the docket already. Looking forward, he says, “we may be able to expect more guidance from the Court.”