Last week, on the one-year anniversary of Wal-Mart Stores v. Dukes, 131 S.Ct. 2541 (2011), a group of Democratic lawmakers proposed companion House and Senate bills that would repeal Dukes’ requirement that workers seeking class treatment of employment discrimination claims demonstrate class-wide discrimination policies or practices. The stated purpose of the “Equal Employment Opportunity Restoration Act of 2012” is to “restore employees’ ability to challenge, as a group, discriminatory employment practices, including subjective employment practices.” In fact, the Act would not simply restore employees’ ability to mount group challenges, but would expand their ability to do so beyond any procedures existing before the Supreme Court handed down Dukes.
Ordinarily, plaintiffs have based class claims of discrimination on policies or practices that are company-wide and affect employees in a common manner. At the times of the events at issue in Dukes, Wal-Mart had company-wide policies that prohibited discrimination, and the Dukes plaintiffs took a different approach. The centralized policy they challenged was a policy that decentralized hiring and promotion decisions, leaving such decisions to the discretion of individual supervisors and store managers. Not surprisingly, a majority of the Supreme Court held that the delegation to thousands of individual supervisors of employment decisions affecting more than one million female employees at thousands of locations across the country precluded a finding of commonality.
To encourage class actions in employment cases, the proposed Act would effectively nullify Dukes and create a very liberal standard for the pursuit of so-called “group actions” under Title VII, the ADA, the Rehabilitation Act of 1973 and the Genetic Nondiscrimination Act. The “group action” option is essentially a stripped down version of Rule 23 that would eliminate entirely the need to prove the existence of common issues of law or fact or that such common issues predominate over individual issues. The Act would essentially leave intact all other provisions of Rule 23 for group actions and, in place of commonality and predominance, would add the requirement that “the members of the group are, or have been, subject to an employment practice that has adversely affected or is adversely affecting a significant portion of the group’s members.” The bill would lower the standard of proof that the elements for certification have been met, providing that an individual can sue on behalf of a group simply by showing “by a reasonable inference” that she meets these truncated Rule 23 requirements.
The proposed Act would allow these “group actions” regardless of whether the group is challenging an objective or a subjective employment practice, and would therefore allow class treatment even where the challenged employment practice resulted from the exercise of many different supervisors’ discretion. It also would allow a court to consider, in opposition to certification of the group action, an employer’s written non-discrimination policy “only to the extent that the employer demonstrates that the policy has been consistently and effectively used to prevent and, where necessary, promptly correct discrimination against the group.” In cases where employers have been found liable, the law would allow the court to deny a remedy to an individual member of the group action only where the employer proved that the member would have been denied whatever employment opportunity or benefit is the subject of the action, absent any statutory violation. Finally, the Act would expressly leave untouched the standards governing class certification in cases that do not involve the covered employment discrimination statutes.
By removing any required showing of commonality and creating a new, less restrictive collective-action avenue for certain employment discrimination actions, the proposed Equal Employment Opportunity Restoration Act of 2012 goes far beyond simply reversing the impact of Dukes, and would make it easier than ever before for employees and their attorneys to assert discrimination claims on behalf of large groups of allegedly affected individuals. Such an unprecedented and sweeping expansion of class procedures would subject employers to enormous risks of liability to unaffected and uninjured employees, and may well run afoul of their due process rights to defend individual claims. At bottom, the bill represents an over-reaction to an unpopular Supreme Court decision that threatens to undermine the balancing of plaintiffs’ and defendants’ rights embedded in Rule 23. We think it unlikely that this bill will pass, but employers should expect continued efforts to challenge the effects of Dukes.
Many thanks to Don Frederico and Katy Rand for their thoughts on this post.