As discussed previously here on the Blawg, yesterday the U.S. Supreme Court rejected a nationwide class action brought on behalf of 1.5 million women against Wal-Mart.

The Ruling Made Simple

So, what does this historic ruling really mean? Here’s my take:

• Does it mean the end of all class actions as we know them? Not even close.
• Does it mean the end of all mega-humongous-nationwide-one-size-fits-all class actions? Maybe. Possibly. Potentially. It depends.

The Court stopped far short of condemning all class actions. It also stopped short of prohibiting nationwide class actions such as the one facing Wal-Mart. Instead, the Court ruled that for a nationwide class action to survive it must offer clear evidence of a nationwide policy or practice that actually damaged the class.

The Court found no such policy or practice on Wal-Mart’s part. Like most companies, Wal-Mart’s corporate policy officially forbade discrimination. And, like most companies, managers were given considerable discretion in enforcing the policy and making pay, promotion and other decisions.

The key sentence in the opinion (in my opinion): “In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction,” Justice Scalia wrote. For that reason, a single class action was deemed inappropriate.

What Others Are Saying

Here are some other reactions from around the nation . . .

The New York Times offered up seven different op-ed pieces expressing varying views. In its main article on the ruling (Wal-Mart Case Is a Blow for Big Cases and Their Lawyers), it offered a nice summary of the Court’s reasoning behind the decision. In short, the problem with allowing massive class actions is that plaintiffs don’t have to show real injury but instead get paid based on a formula:

In his opinion, Justice Scalia said it was unacceptable to allow employment discrimination lawsuits to proceed as huge class actions when monetary awards would be based on a broad formula per plaintiff, without having an individual assessment of how much each plaintiff had suffered.

He wrote that to allow that to happen in the Wal-Mart case, the largest employment class action in American history, would have been hugely unfair to Wal-Mart because it might have had to pay out damages without many of the plaintiffs demonstrating how much they were injured.

The Associated Press called the ruling a “blow to class actions” and opined that “mounting a large-scale bias claim against a huge company will be more difficult.

Not surprisingly, business groups (many of which filed briefs in support of Wal-Mart’s position in the case) heartily embraced the decision. “We applaud the Supreme Court for affirming that mega-class actions such as this one are completely inconsistent with federal law,” said Robin Conrad of the U.S. Chamber of Commerce. She added: “Too often the class-action device is twisted and abused to force businesses to choose between settling meritless lawsuits or potentially facing financial ruin.”

Others were decidedly less enthusiastic. Marcia Greenberger of the National Woman’s Law Center said that the ruling “strikes a blow to those who face discrimination in the workplace to be able to join together and hold companies, especially large companies, accountable for the full range of discrimination they may be responsible for.”

Joseph Sellers, the lead lawyer for the plaintiffs in the Wal-Mart case, noted that the decision would likely result in even more class actions at the store/regional level. He predicted the decision would hurt both his clients and Wal-Mart because it “will be splintered into many cases that may take longer and be harder to resolve” based on “checkered” legal standards that vary from jurisdiction to jurisdiction.

Law scholars generally agreed that the ruling will discourage plaintiffs’ lawyers from pursuing large-scale class actions. Columbia University professor John Coffee said the ruling “significantly changes the balance between employers and employees. And it largely eliminates the monetary threat facing big employers.” “Lawsuits are expensive to bring,” he said, “and if there is no money relief at the end of the road, there is no incentive to bring the suit.”

Several bloggers weighed in as well. Daniel Schwartz of The Connecticut Employment Law Blog has a nice summary here. Jon Hyman of the Ohio Employer’s Law Blog has a detailed legal analysis here. And Evil HR Lady has a piece entitled Why the Wal-Mart Ruling Is Good for Women.

The Court’s full opinion is available here.

What Should Employers Do?

Here are some lessons employers should learn from this ruling:

1. Implement company-wide policies and practices prohibiting discrimination.
2. Communicate the policies and practices to all employees on a regular basis.
3. Train managers on proper enforcement of the policies and practices.
4. Promptly and thoroughly investigate any and all complaints.
5. Take appropriate steps to address any violations.
6. Never ever retaliate against any complainant.

It’s LITIGATION WEEK here on the Blawg, where all week we’re taking a deep dive into the wonderful world of workplace lawsuits.

Today’s topic: LITIGATION $$$. More specifically: who’s spending what where and why?

Verdicts Up. According to the latest data from Jury Verdict Research, the median award for all types of discrimination claims shot up a whopping 46% in the past year, from $216,575 to $317,032. The mean retaliation verdict also rose substantially — up 51% from $146,050 to $221,250.

What are an employer’s odds of winning at trial? Employers won only 42% of employment lawsuits in the past year. Over the past decade, the lowest win rates were in pregnancy discrimination cases (37%), sex discrimination (38%) and age discrimination (46%). The only type of case in which an employer won greater than 50% of cases was race discrimination (51%).

What are the most common discrimination lawsuits? Sex was #1 (35%), followed by race (25%), disability (15%) and age (13%).

What types of discrimination generate the biggest verdicts? In federal court, disability discrimination was #1, followed by age, sex and race. In state court, age was #1, followed by race, disability and sex.

What employers took the biggest hits? Government entities faced the most claims, followed by manufacturing/industrial, service/retail and then transportation.

Are employers better off in federal or state court? Generally speaking, employers are better off in federal court, where they won 45% of the cases, versus only 40% in state court. Even more siginficant, the median federal award was 45% lower than the median state award.

What about settlements? The median settlement amount was the highest in the past decade at $95,000 — a 5% jump over last year. The biggest settlements were in race cases, followed by sex and disability.

Where can I get more? For the full report — which should be required reading for all HR professionals, business owners and lawyers — click here.

Stay tuned for more.

According to the EEOC, the anti-Muslim sentiments that have been all over the news lately are spilling over into the workplace.

The Facts

Claims of discrimination against Muslims filed with the EEOC have more than doubled in the past five years. rising to a new high of 1,490 last year from 1,304 in 2008 and only 697 in 2004. Strange as it may seem, there were more claims in each of the past two years than in the year immediately after the 9/11 attacks. Moreover, a recent Pew Research Center poll shows that public perception of Muslims has dropped from a 41% favorability rating in 2005 to just 30% now — a decrease of more than 25%.

“Open Hatred”

“There is a hatred, an open hatred, and a lack of tolerance of people who are Muslim,” says Mary Jo O’Neill of the EEOC. She and others point to the recent oppositions to mosque building and a pastor’s threat to burn the Quaran as merely the tip of the iceberg. “One can easily conclude that since the general situation is so unfavorable when it comes to Muslims that this negative idea is carried into the workplace,” says Shams Inati of the Center for Arab and Islamic Studies at Villanova University.

Recent Suits

Two recent religious discrimination suits are illustrative of the struggles in this area.

In EEOC v. JBS USA, LLC, the EEOC alleges that supervisors and co-workers “threw blood meat, and bones” at Muslim employees and repeatedly made anti-Muslim offensive comments in the workplace. It also claims that JBS refused to accommodate prayer-time requests of Muslim employees and then retaliated against them by firing them when they asked that their break times be changed during the Islamic holy month of Ramadan.

In another high-profile case, a Disney hostess named Imane Boudal alleges that she was sent home when she refused to remove her hijab (a headscarf worn by some Muslim women) at work. “Disney has apparently worked to hide Imane’s hijab, fearful the sight of hijab would adversely impact its guests,” says her lawyer, Ameena Mirza Qazi.

Disney has a different view. “She’s been allowed to work,” says Disney spokesperson Suzi Brown. “We’ve given her the opportunity to work in a backstage role the last several shifts she’s come in.” Brown added: “It has to do with the costume — every role at Disneyland Resort has a specific costume.”

Qazi offered this advice to Disney: “Take a ride on one of your own rides, a little thing called ‘It’s a Small World,’ which celebrates human diversity.” 

What Employers Should Do

As anyone who has attended one of my webinars or presentations knows, it’s my strongly held belief that all of employment law boils down to one little word: LOVE.

Want to avoid lawsuits? Love your employees. All of them. Don’t tolerate harmful, offensive conduct by your employees that targets any protected class — including Muslims.

The EEOC has put together several helpful tools to assist employers in handling religious accommodation and similar issues the right way. Click here for a handy set of answers to FAQs and here for the EEOC’s “best employer practices” guide. I urge you to check ‘em out.

During our last webinar, we asked the following question . . .

Women now make up the majority of the non-farm workforce and the vast majority of college attendees. Recent studies show that wage disparities appear to be narrowing. In the not-so-distant future, the U.S. will be more than 50% non-white. The Supreme Court and even the Oval Office reflect more diversity than ever before. So, when will Title VII be repealed?

Here’s how our audience of 2,000+ responded . . .

a.  By the end of the week (0%)
b.  By the end of the decade (15%)
c.  By 2030 (10%)
d.  By 2050 (4%)
e.  Never (71%)

So, the vast majority of you feel that Title VII will never be repealed. I tend to agree.

Setting aside some of the obvious political reasons (not a whole lot of politicians are likely to want to raise their hand and say “I’m against discrimination laws”), there’s still quite a bit of work to do before true equity will rein in the workplace.

Among other things, women still only earn 77¢ for every $1 earned by men — a whopping $431,000 less over the length of an average career. Despite the fact that women now constitute a majority of the workforce, only 3% of CEOs and 13% of executive officers are women. There are other similarly sobering statistics for other protected classes.

The Bottom Line: Don’t expect Title VII to go away any time soon.

As always, thanks for your participation!

(Sources: Bureau of Labor Statistics, Catalyst, TIME Magazine, Center for American Progress)

Here’s this week’s rather provocative question, straight out of the headlines and off the lips of some of the nation’s most prominent employment lawyers:

As a follow-up to last week’s post here about looks in the workplace, click here for a rather thought-provoking article from Newsweek, in which the author concludes that beauty bias is unfair but then asks the billion-dollar question: should it be illegal?

Thanks to the 582 of you who voted on last week’s question. Here are the results . . .

An employee comes into your office at 4:58 on a Friday afternoon and informs you that he suffers from multiple medical conditions, including “work-induced narcolepsy,” “spontaneous combustion syndrome” and “episodic cubicle-confinement hyper-grumpiness.” He demands several accommodations, including: (1) a portable I.V. hooked up to an espresso machine, (2) a fire extinguisher mounted to his head, (3) three-and-a-half weeks off each month and (4) your office. If you have time to make only one call, to whom should it be?

a. The EEOC (8%)
b. A lawyer who specializes in the ADA (57%)
c. The Job Accommodation Network (17%)
d. The employee’s physician (12%)
e. The employee’s spouse to see if he’s making all this up (7%)

The correct answer is “c”: the Job Accommodation Network.

The Job Accommodation Network (JAN) is a service dedicated to assisting employers who face difficult accommodation decisions. To contact JAN, click here, on the link (jan.wvu.edu) under the “Other Resources” section of the Blawg or call 800-526-7234.

I’ve always found JAN to be extremely helpful. In fact, on at least one occasion the EEOC has stated publicly that it is more likely to believe that an employer acted in good faith if it consulted with JAN during the accommodation process.

The best part? JAN is FREE. In our experience, $0 an hour is less than what most law firms charge.

I’m not surprised that JAN was selected as the correct answer by only 17% of our respondents. I’ve done dozens of seminars and very few people have ever given JAN as the correct answer to this question. JAN just may be the best-kept secret in the employment law universe.

Our viewers are now batting a respectable .537 (22 right, 19 wrong) on our weekly questions.

The next one will be coming your way soon. Thanks for your participation!

One of the best ways to stay out of court is to (1) keep tabs on what sorts of things the EEOC is suing employers for and then (2) don’t do those things.

The EEOC announced a whopping 38 new lawsuits this past week. If you’d like to spend more time with lawyers, judges and juries, just do any of the following . . .

Sexual Harassment and Gender Discrimination

Almost a third of the new cases fall into this category. Here’s what not to do:

• ignore repeated complaints about “higher-ups” who use “sexual epithets” and engage in “threatening physical and verbal sexual conduct” (here);
• apply anti-nepotism policies inconsistently to male and female employees (here);
• fail to have a clearly articulated harassment complaint procedure and fail to take steps to stop a manager from using his position to harass several female employees (here);
• punish an employee who complains of sex harassment by cutting her hours, taking away her company vehicle and then firing her without explanation (here);
• fail to take adequate steps to address a “campaign of sexual comments, threats and unwanted touching” by managers against female teenage employees (here); and
• fail to stop repeated sex-based harassment such as unwelcome touching, requests for sexual favors, physical intimidation, name-calling, anonymous notes and/or retaliation (here, here, here, here, here, here, here and here).

Pregnancy Discrimination

Please don’t:

• make sexist comments like ”a pregnant woman should be at home,” fire a pregnant employee the day she turns in her maternity leave paperwork and then fire her husband three weeks later for “associating” with her (here);
• remove a pregnant employee from a position for safety/risk reasons without an in-depth analysis (here);
• refuse to accommodate a pregnant employee’s request for additional leave time due to doctor-ordered bed rest (here); and
• fail to rehire an employee after she resigned due to a pregnancy-related medical condition (here).

Disability Discrimination

What not to do in this area . . .

• refuse to provide reasonable accommodations to disabled applicants during pre-employment training (especially if you’re a disability services company) (here);
• refuse to hire someone solely because of a back ailment (here) or learning disability (here);
• refuse to discuss a deaf employee’s accommodation requests, “pick on” the employee, force the employee to “work in the back of the store away from the public,” and then “eliminate her work hours entirely” (here); and
• discharge an employee who was involuntarily hospitalized (here).

Race and National Origin Discrimination

Don’t:

• tell a minority applicant during the hiring process that she is “obviously qualified,” then refuse to hire her because she is “unqualified” and then hire a less qualified non-minority applicant (here);
• refuse to hire non-Hispanic applicants for housekeeping positions (here);
• refuse to hire an applicant solely because they don’t speak Spanish when it’s not required for the job (here);
• screen out applicants on a nationwide basis based on credit history and criminal charges/convictions without considering potential job-relatedness (here);
• systematically favor employees of one national origin over another (here); and
• fail to take adequate steps to address a racially hostile work environment, including racial slurs, graffiti and nooses (here, here, here and here).

Age Discrimination

Somewhat surprisingly, there was only one new age-discrimination suit.

Don’t:

• make hiring decisions based on age and then fail to retain employment records related to the hires (here).

Retaliation

Many of the above cases also included retaliation claims. Here are some “what not to do’s” from other new cases that focus almost exclusively on retaliation.

Don’t:

• fire an employee for refusing to drop a discrimination complaint against another employer with whom management has a “close relationship” (here);
• terminate an employee for refusing to drop a restraining order against a co-worker (here); and
• retaliate against employees who complain of discrimination (here, here and here).

All of the above are merely allegations made by the EEOC and are not established facts at this point. Stay tuned to see how these cases play out.

A recent survey by the Pew Research Center sought to answer that question. Here’s what it asked . . .

Just your impression, In the United States today, is there a lot of discrimination against __________ or not?

The top vote-getters? Gays and lesbians, followed by Muslims and then Hispanics.

Here are the full results (% of “yes” votes):

• Gays and lesbians: 64%
• Muslims: 58%
• Hispanics: 52%
• Blacks: 49%
• Women: 37%
• Jews: 35%
• Evangelical Christians: 27%
• Atheists: 26%
• Mormons: 24%

(Special thanks to Jon Hyman of Kohrman, Jackson & Krantz for bringing this to my attention)

True to promises made by the Obama Administration, employers can expect to see much more aggressive enforcement of federal anti-discrimination laws in the very near future.

Here’s the latest . . .

New Wage and Hour Compliance Officers

Labor Secretary Hilda Solis has publicly emphasized increased enforcement as a priority, focusing primarily on the Office of Federal Contract Compliance Programs (OFCCP), the Occupational Safety and Health Administration (OSHA) and the Wage and Hour Division. The Wage and Hour Division alone plans to hire more than 200 new compliance officers to enforce the Fair Labor Standards Act (FLSA) and other statutes.

Agency Budget Increases

Budgets for the Equal Employment Opportunity Commission (EEOC) and Department of Labor (DOL) are on the rise for the first time in years, with significant increases planned for 2010. The EEOC will undoubtedly use those resources to pursue its renewed emphasis on systemic (i.e., class-wide) discrimination.

Department of Justice

U.S. Attorney General Eric Holder announced a few days ago that the Department of Justice (DOJ) will increase the budget for the Civil Rights Division by $22 million and hire more than 50 civil rights attorneys to enforce various federal laws, including the Americans with Disabilities Act (ADA), the Civil Rights Act of 1964 and the Immigration Reform and Control Act (IRCA). The Division has already started filing far more “friend of the court” briefs in private discrimination matters.

Other Enforcement Activities

Other agencies are upping the enforcement ante as well. Immigration Customs and Enforcement (ICE) recently announced that it is issuing notices of investigation (NOIs) to 652 employers nationwide. OFCCP announced that it will audit recipients of federal stimulus money. OSHA announced a new National Emphasis Program (NEP), targeting companies whose reported injury history is significantly less than the norm.

What Does All This Mean for Employers?

It’s pretty simple: follow the law. Employers that don’t are likely to face tougher audits and enforcement than has been seen in decades.