You have to read this post by Ed Morrissey at Hot Air.
The Supreme Court took a big bite out of the pockets of class-action trial lawyers today, at least in the field of employment discrimination. The court unanimously rejected a class-action lawsuit against Wal-Mart on behalf of 1.6 million female employees that attempted to argue that the retail giant purposefully and systematically discriminated on gender for compensation. But a narrow 5-4 rulingon a companion issue promises to make filing any more such class-action lawsuits nearly impossible:
The justices divided 5-4 on another aspect of the ruling that could make it much harder to mount similar class-action discrimination lawsuits against large employers.
Justice Antonin Scalia’s opinion for the court’s conservative majority said there needs to be common elements tying together “literally millions of employment decisions at once.”
But Scalia said that in the lawsuit against the nation’s largest private employer, “That is entirely absent here.”
Justice Ruth Bader Ginsburg, writing for the court’s four liberal justices, said there was more than enough uniting the claims. “Wal-Mart’s delegation of discretion over pay and promotions is a policy uniform throughout all stores,” Ginsburg said.
The contrasting opinions gives a good indication of what is at stake. In mostcorporations (especially national retail chains), compensation decisions are almost always delegated to individual locations or regional management. For one thing, the labor market varies from region to region, and what amounts to competitive compensation in one region might be insufficient in another, depending on the cost of living, labor availability, and so on.
Ginsburg’s identification of this as a prima facie indication of discrimination would have exposed virtually all US retailers to such class-action lawsuits. Not only would that have sapped retailers of billions in capital, but it doesn’t make any sense on its face anyway. If compensation decisions are decentralized throughout an organization, how can that possibly demonstrate a coordinated, centralized, and explicit effort to discriminate on the basis of anything?
Reining in judicial activism and trial layers is a good way to incentivize corporations to create jobs. If you want to lower unemployment, stop these frivolous class-action lawsuits.
It’s also worth pointing out that lawsuits like this are bogus in a free market, because if people really area being underpaid, they can always go to a different employer to get a higher salary – IF THEY ARE WORTH IT. We really need a national loser-pays law to deter these nuisance lawsuits.