Following the Proof, Post-Wal-Mart

August 18, 2014

In the three years since the Supreme Court issued its decision in Wal-Mart Stores Inc. v. Dukes, 131 S.Ct. 2541 (2011), lawyers representing workers in class actions have faced a recurring theme from defendants: employers point to the Wal-Mart decision and argue that any employment law violations occurred because of a few managers, but not company-wide. A recent Department of Labor case shows how following the proof can be part of a successful response to that argument.

First, the backstory. In Wal-Mart, the plaintiff class included more than one million Wal-Mart employees, from more than walmart mike mozart3,000 different stores. The class plaintiffs tried to bring a nationwide class action to challenge Wal-Mart’s pay and promotion practices, alleging gender discrimination. The Supreme Court held that the case could not continue as a nationwide class action because individual managers made the pay and promotion decisions, and there were not enough common issues of fact to hold a class action together.

In the wake of Wal-Mart, the Seventh Circuit decided Bolden v. Walsh Constr. Co., 688 F.3d 893 (7th Cir. 2012), a class action brought by employees from a large construction company. The class plaintiffs tried to bring a class action alleging race discrimination, alleging that a hostile work environment spanned more than 250 jobsites in the Chicago area. The Seventh Circuit held that the proposed class was too large to be certified, given the different experiences at various jobsites. But the Seventh Circuit suggested that the plaintiff might be able to propose smaller classes by focusing on employees at specific sites, or employees who reported to specific supervisors, depending on the proof.

Earlier this month, the U.S. Department of Labor apparently borrowed the approach suggested in Bolden and used it for a large overtime case. In a press release, the Labor Department announced a settlement of an overtime investigation involving tech giant LinkedIn Corp. That investigation involved unpaid overtime work that LinkedIn managers required on an off-the-clock basis at some of the company’s worksites. A LinkedIn spokesperson told the Wall Street Journal that the settlement involved only 359 workers, which is a “small subset” of its 2,400-member sales force. LinkedIn paid more than $6 million to settle the DOL case. LinkedIn also agreed to change its procedures company-wide, to prevent individual managers from requiring employees to work off-the-clock overtime.

By following the proof to those worksites that had problems, the DOL obtained relief for a large group of employees, in a single stroke. Also, the DOL was able to obtain valuable policy changes that benefitted all of the employees at LinkedIn.

The LinkedIn settlement suggests that workers in large companies may still find protection, even in a post-Wal-Mart world. The key may be to follow the proof, even if it means seeking a narrower class at the class certification stage.


Photo Credit:  Mike Mozart


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