Tag: gender discrimination

Tuesday Links

  • Shifting America’s focus away from individual liberty is waging war on the future, not winning it.
  • U.N. “authorization” is the Emperor’s new fig leaf for war with Libya.
  • Why are we fighting Mexico’s drug war?
  • David Boaz remembers Geraldine Ferraro, who helped advance the war against gender discrimination in politics.
  • Chris Preble eulogizes the Weinberger/Powell doctrine against the backdrop of the Libyan war:


Lame-Duck Menace: The Paycheck Fairness Act

At Compensation Cafe, Stephanie Thomas explores some of the “nonsensical implications” of a misnamed bill that’s a high Obama administration priority in the lame duck session:

Let’s assume that John and Jane have identical characteristics (education, work experience, etc.) except for gender. ABC Company makes offers of employment to John and Jane on the same day, for the same position, for the same starting salary: $45,000. Jane accepts the offer, but John negotiates the salary, and ends up with $50,000. Under the current equal pay laws, there’s no problem; John is earning more because he negotiated and Jane did not. Makes sense, right? Under the Paycheck Fairness Act, ABC Company would be guilty of gender discrimination.

Here’s another example. Assume that Sam and Sally have the same education, work experience, etc., and are both hired by WidgetCo on the same day. WidgetCo sets Sam and Sally’s starting salary at $2,500 more than they were making at their previous job. Sam was earning $37,500 at his previous job, and Sally was earning $36,000; their starting salaries at WidgetCo are $40,000 and $38,500. Seems reasonable, doesn’t it? Under the Paycheck Fairness Act, WidgetCo would be guilty of gender discrimination.

One final example. Assume that Brad and Bridget both work for Alpha Inc., have the same job title, same level of responsibility, etc., and they are both earning $100,000 per year. Brad asks for a 5% raise, but Bridget doesn’t ask for a raise. Brad gets the raise and ends up earning more than Bridget. Again, no problems here, right? Wrong - under the Paycheck Fairness Act, Alpha Inc. would be guilty of gender discrimination.

“Making matters worse, under the new law, damage awards would be uncapped, and class-action procedures loosened. Bring on the trial lawyers,” notes a Chicago Tribune editorial. For more on this very bad bill, check out the papers and presentations from a panel last week put on by our friends at the Hudson Institute. Earlier here and, at Overlawyered, here, here, etc.

The Ninth Circuit’s Controversial New Class Action Decision

The Ninth Circuit has issued its long-awaited en banc decision in Dukes v. Wal-Mart, a pathbreaking class action seeking relief from Wal-Mart for alleged gender discrimination on behalf of somewhere between 500,000 and 1.5 million women. The upshot: a 6-5 partial affirmance of one of the most questionable class certification approvals in recent memory.

The case is sparking considerable commentary: see here, here, and here, for starters. Cataloguing all the myriad questionable parts of the 135+ page decision, which range from the standard for admitting expert testimony in support of certification, to the permissibility of so-called “issue classes,” to due process restraints on award of class-wide punitive damages, would take a blog post rivaling the length of the Ninth Circuit’s own monster-of-an-opinion.

Here, though, are a few problems that pop out on first reading.

First, the Ninth Circuit’s certification decision depends on an exceedingly questionable understanding of federal civil rights law. As Richard Nagareda has written, the case is premised on “a bold, new conception of prohibited discrimination under Title VII - a notion that the scholarly literature encapsulates in the term ‘structural discrimination.’” The idea is that a corporation can violate federal antidiscrimination laws by structuring the workplace in a way that enables unconscious discrimination by frontline managers.

Wal-Mart is said to have engaged in this sort of scheme because it permits its managers to engage in highly subjective decision-making about pay and promotion, rather than imposing uniform objective criteria. In effect, the idea is that Wal-Mart’s laissez faire approach to personnel management masks a conscious effort to use its managers, and their unconscious biases, as a conduit for the company’s own unstated policy of gender discrimination.

As Nagareda points out, the theory of structural discrimination “has enjoyed a run in academic discourse out of line with its meager acceptance as a matter of actual doctrine.” Indeed, as he notes, “one broadly shared starting point in the literature” is that structural discrimination is not consistent with current law. Yet, the viability of this suit turns on this theory. And the trial court and the original Ninth Circuit panel in turn authorized a class without ever squarely deciding whether Title VII does, in fact, embrace this theory.

The en banc panel appears to make some (meager) effort to rectify this problem. But its elliptical treatment of the structural discrimination theory, spanning a couple of paragraphs buried deep in the belly of the mammoth opinion, is ephemeral—a far cry from Nagareda’s suggestion that the panel first “resolve the meaning of the statute squarely and forthrightly” before undertaking class certification analysis. One senses the often-reversed Ninth Circuit, fearful of the Roberts Court peering over its shoulder, is trying to bury the lede.

Second, a more technical problem: the en banc decision exacerbates an already troublesome circuit split over the conditions for approving a class under Rule 23(b)(2). This is a popular vehicle for class actions among plaintiffs’ lawyers for two reasons: first, assuming a class qualifies for treatment under it, class members are not entitled to an automatic right to exit the class (or “opt out”) and, second, Rule 23(b)(2), in addition, imposes less stringent requirements for class certification. In their advisory notes, the drafters of the federal class action rule suggest a class qualifies for treatment under Rule 23(b)(2) if injunctive relief “predominates” over monetary relief. And one might think that in a suit, such as this, seeking massive punitive damages on behalf of an veritable army of women, certification under Rule 23(b)(2) is therefore obviously inappropriate. But rather than squarely so hold, the Ninth Circuit now stakes out an entirely new, multi-factored balancing test for determining when injunctive or monetary relief predominates—creating a three-way circuit split about the meaning of Rule 23(b)(2)’s predominance test.

Another more fundamental problem: The text and structure of the Civil Rights Act also strongly suggest that in suits seeking backpay and punitive damages, defendants must have a chance to present affirmative, individualized evidence, on a case by case basis, rebutting claims they have discriminated. In addition, the Supreme Court’s due process cases also strongly suggest punitive damages should be awarded based on an individualized determination of fault. Yet, although the ultimate trial plan remains in flux, the en banc panel greenlights jettisoning the defendant’s right to present this kind of affirmative, individualized, case-by-case rebuttal evidence. It has done so, of course, in the service of facilitating the class action: if a case-by-case opportunity to affirmatively rebut discrimination is mandated by Congress, or the Fifth Amendment, in hundreds of thousands of suits seeking back pay and punitive damages, its hard to avoid concluding that those claims predominate over the request for injunctive relief, disqualifying them from Rule 23(b)(2) treatment even under the Ninth Circuit’s new “third way” test … . and raising serious concerns about whether the claims for monetary relief are certifiable at all.

Class action practice is, alas, one area where the Supreme Court has been, largely, AWOL. The result—an ever-lengthening array of circuit splits on key questions that affect when a class action can be green-lighted. Dukes—a decision chock full of questionable, boundary-pushing decisions—is the inevitable result. Some suggest Supreme Court review of this decision is close to a sure thing. Let’s hope that’s right.