Wal-Mart may be facing the largest class-action lawsuit ever filed against a private employer in the United States. Or it may not. The class action, involving up to 1.6 million women charging sexual discrimination, was certified in June. But a 1998 change to the rules of civil procedure allows defendants to appeal the designation of a lawsuit as a class action before the final outcome of the case.
Judges generally frown upon such "interlocutory" appeals, says Michael Gass, a partner at Palmer & Dodge LLP in Boston. In the past, defendants could challenge the certification of the class only after the case had been decided. But because most large class actions are settled before they go to trial, defendants have had little recourse once the class was certified.
The sheer magnitude of the Wal-Mart case means that the class-action designation could be a critical factor. "It changes the dynamic so dramatically that the class certification itself becomes the centerpiece of the case," says Glenn Dowd, a partner in the New York office of law firm Day, Berry & Howard LLP.
Wal-Mart will argue that each instance should be looked at individually. In a petition to the court, lawyers for the retailer wrote, "It is undisputed that compensation and promotion decisions for hourly employees are made almost exclusively on a case-by-case, discretionary basis, by local store managers." Says Dowd: "They will take issue with the idea of typicality," a key determinant for class actions.
"Based on the size of the Wal-Mart case, it would be shocking if the [certification of the class action] had not been reviewed," notes Samuel Issacharoff, a professor at Columbia Law School. Whatever the outcome, Issacharoff doesn't think the case will set a precedent for mammoth class actions against employers.