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Explained: Why the Wal-Mart Decision Matters

by nobody Monday, Jun. 27, 2011 at 12:09 AM

A short explanation of why the Wal Mart decision matters, what a class action lawsuit is, and potentially new standards applied to decisions about discrimination.

The Supreme Court of the United States (SCOTUS) decided against the plaintiffs in Wal-Mart v. Dukes.

The main argument was that the class of women was too broadly defined. Unfortunately, the plaintiffs didn't consider the risks of losing.

This decision undermines the class action lawsuit. A class action lawsuit is a lawsuit claiming damages for an entire class of victims. A class is a group of people with a common situation or interest.

In a class action lawsuit, all the victims are entitled to a fraction of the damages awarded. So if Wal-Mart was found to be guilty of discriminating against women (which is provably did), then each female Wal-Mart worker is entitled to some compensation. The amount of the award would be based on a formula that determines the damages.

Class actions are critical to preserving the rights of workers and consumers, who don't have lawyers or the money to pursue an expensive lawsuit when they're wronged. A class action lawsuit can turn a individual problem into hundreds of thousands of dollars in potential damages awarded to thousands of victims.

Critics say that in class actions, the victims get very little, while the lawyers make a lot of money. This is often true, and it's not fair to the victims, but if there weren't some significant rewards, the lawyers would not take on these cases. By pursuing these lawsuits, they put pressure on businesses to follow the laws. This is how the American legal system works: in civil law, simply breaking a law doesn't cause you to suffer punishment. The police won't right the wrong. It's up to the victim to sue the lawbreaker.

The Wal Mart decision also undermines the premise of the Civil Rights Act by saying that you cannot file a class action lawsuit if a company is discriminatory, if the discrimination is the same as the level in the general workforce. The CRA made it illegal to discriminate against people based on race and gender. The CRA has been expanded to include other characteristics, so it is a very protective law.

The decision sets a precedent allowing for the continuation of employees discrimination against women. If all the stores are discriminating against women, then, Wal-Mart is allowed to do the same. This plainly undermines progress toward the goal of gender equality.

(Precedents matter, because our law is based on judicial decisions. If a case is decided one way, then in the future, similar cases should be decided the same way, unless the original decision is overturned.)

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