Wal-Mart Stores, Inc., is relieved after the US Supreme Court blocked a gigantic class action lawsuit against the retailer from being certified.
On Monday, the high court overruled a decision by the 9th U.S. Circuit Court of Appeals in San Francisco, which previously allowed the class action against the largest retail chain of the US.
A group of 1.5 million women had filed the class action seeking recognition of systematic discriminating practices at Walmart against women concerning pay and promotion. The high court could not see these general practices indicated and decided the retailer should defend itself against individual allegations directly.
Investors took the decision with gratitude as Walmart shares jumped up about 1% in the morning and are now cruising towards closing the day with a 0.3% win.
In a statement by its headquarters, the company expressed its gratitude to the court.
We are pleased with today's ruling and believe the court made the right decision. Walmart has had strong policies against discrimination for many years. The court today unanimously rejected class certification and, as the majority made clear, the plaintiffs' claims were worlds away from showing a companywide discriminatory pay and promotion policy.
By reversing the Ninth Circuit Court of Appeals decision, the majority effectively ends this class action lawsuit, said the statement. Gizel Ruiz, Walmart U.S. executive vice president for people, affirmed the Supreme Court acted correctly.
The same day Robin Conrad, executive vice-president of the U.S. Chamber of Commerce's National Chamber Litigation Center said in a statement to support the ruling:
This is without a doubt the most important class action case in more than a decade. We applaud the Supreme Court for affirming that mega-class actions such as this one are completely inconsistent with federal law. Every single Supreme Court justice disagreed with the Ninth Circuit's decision, which radically lowered the standard for certifying class actions, and opened the door to even more bet-the-business blockbuster class actions.
Today's ruling reinforces a fundamental principle of fairness in our court systems: that defendants should have the opportunity to present individualized evidence to show they complied with the law, said the statement.
Too often the class action device is twisted and abused to force businesses to choose between settling meritless lawsuits or potentially facing financial ruin. Our economy would be better served if businesses could spend more resources creating jobs and fewer resources fighting frivolous litigation.
Meanwhile, bloggers accused the high court of protectionism on the basis of size.
The National Organization for Women pointed out that standing up against a large company like Walmart is in many cases connected to great personal. These women are now on their own to present their cases. The NOW awarded Walmart the 2002 Merchant of Shame when campaigning for woman-friendly working spaces.
So what does Walmart stand, for example, in New York State? According to its website: 65 Supercenters, 30 Discount Stores, 16 Sam's Clubs and 3 distribution centers. More than 36,000 are employed and the chains spending s on supplies guarantee for another 789,000 jobs in those businesses.