It’s certainly big news when the U.S. Supreme Court dismisses a class action claim that could potentially have involved over 1.5 million women. What does it mean for your company’s defense against class actions? Maybe not so much.
Craig Cleland, a shareholder in Ogletree Deakins’s Atlanta office, summed it up the post-Wal-Mart situation as follows “Where will plaintiffs turn now? I never underestimate the creativity of the plaintiffs’ bar. But even so the landscape has changed dramatically and unfavorably for them today.”
What SCOTUS Said
The lawsuit claimed that Wal-Mart systematically paid women less and did not provide equal opportunity for advancement. It contended that all women employed by Wal-Mart since 1998 should be part of the class.
The court’s decision was not about the discrimination itself, but whether the technical rules for forming a class were followed. The court decided that the group could not be certified as a class.
To form a class, you have to have so many members that it is impracticable to have separate trials for all of them. The Wal-Mart women certainly met that standard. But the members of the class have to share a well-defined common interest, and it must be clear that resolving the cases of the few actual representatives would effectively resolve all the cases of all the class members.
The Supreme Court just didn’t see that literally millions of separate employment decisions relating to women in many different jobs, could be viewed as meeting the class requirements.
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In addition, crucial to those bringing the Wal-Mart case was demonstrating that Wal-Mart had a company-wide discriminatory pay and promotion policy. But what Wal-Mart actually had was a company-wide anti-discrimination policy with pay and promotion decisions delegated to the store level.
That, the court decided, just didn’t suggest a company-wide policy or practice that would apply to all the members of the class.
What to Do Now
Maybe the threat of a huge class action is lessened. But that doesn’t mean that you can’t be hit by an expensive individual suit, either about discrimination or pay practices. To fend off such suits, the essential rules remain the same:
- Have a strong anti-discrimination policy.
- Publicize the policy
- Train managers and supervisors
- Enforce the policy
- Respond quickly and meaningfully to complaints or reports of violations of the policy
- Audit regularly. It’s not hard to discover discrepancies with regular auditing that will allow you to fix problems before they escalate into lawsuits.
Regular audits—the only way to find out if there’s a potential lawsuit hiding in your employment actions. The only way to make sure that employees in every corner of your headquarters and every outlying facility are operating within policy guidelines.
If you’re not auditing, someone’s probably violating a policy right now. The rub is that for most HR managers, it’s hard to get started auditing—where do you begin?
BLR’s editors recommend a unique product called HR Audit Checklists. Why are checklists so great? Because they’re completely impersonal, forcing you to jump through all the necessary hoops one by one. They also ensure consistency in how operations are conducted. That’s vital in HR, where it’s all too easy to land in court if you discriminate in how you treat one employee over another.
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HR Audit Checklists compels thoroughness. For example, it contains checklists both on Preventing Sexual Harassment and on Handling Sexual Harassment Complaints. You’d likely never think of all the possible trouble areas without a checklist; but with it, just scan down the list, and instantly see where you might get tripped up.
In fact, housed in the HR Audit Checklists binder are dozens of extensive lists, organized into reproducible packets, for easy distribution to line managers and supervisors. There’s a separate packet for each of the following areas:
- Staffing and training (incorporating Equal Employment Opportunity in recruiting and hiring, including immigration issues)
- HR administration (including communications, handbook content, and recordkeeping)
- Health and safety (including OSHA responsibilities)
- Benefits and leave (including health cost containment, COBRA, FMLA, workers’ compensation, and several areas of leave)
- Compensation (payroll and the Fair Labor Standards Act)
- Performance and termination (appraisals, discipline, and termination)
HR Audit Checklists is available to HR Daily Advisor readers for a no-cost, no-risk evaluation in your office for up to 30 days. Visit HR Audit Checklists, and we’ll be happy to arrange it.