Supreme Court Denies U.S. Country Wide Class Action - Cases Can Proceed Individually

The US supreme court has rejected the biggest sex discrimination case in history, ruling that the claim against retail giant Walmart on behalf of as many as 1.6 million women was too big to bring to trial.

All the top US judges ruled that the 10-year-old gender bias case failed to meet the standard for class action cases, and a majority of conservative judges also ruled that the women did not have enough in common to pool their claims.

The judgment is a major victory for Walmart, which had faced billions of dollars in claims if it had lost.

The women are free to bring cases on an individual basis but legal experts said they may be unwilling to do so. The decision was also described as a blow to all future class action law suits against companies or anyone trying to use the courts to push for systemic change.

The suit was originally filed in 2001 on behalf of Walmart employee Betty Dukes and five of her co-workers, who claimed they had been passed over for promotions and were paid less than male co-workers.

Their lawyers had provided statistical evidence that women earned less and were promoted less often. They alleged that Walmart's corporate culture and employment policies fostered gender stereotyping across the company and that Walmart knew of discrimination but failed to act.

The retailer's lawyers argued that the firm had no case to answer and had a stated anti-discrimination policy.

A lower US court ruled that the case could go to trial, but Walmart appealed to the supreme court. If the class action had been accepted it could have set a precedent for gender discrimination at many corporations, with companies such as Microsoft and General Electric writing to the court expressing their concern.

Led by conservative supreme court justice Antonin Scalia, the court found several problems with the law suit. All the judges agreed that it failed to meet a technical requirement for its type of class action primarily concerned with monetary claims.

Scalia and the conservative judges on the supreme court went further and argued the women did not have enough in common to represent a class of people. Scalia sided with Walmart's argument that there would need to be common elements tying together "literally millions of employment decisions at once" to make the basis for a class action case. He said that such a common element was "entirely absent here."

Legal expert Stuart Slotnick of New York law firm Buchanan Ingersoll and Rooney said the ruling "changes everything in Walmart's favour".

He said large-scale class actions would now be far harder to bring against other companies as greater proof of system-wide discrimination would be needed. Often such proof is only available after a case has been granted class action status and the process of discovery – where lawyers can demand access to sensitive internal documents – begins.

"Walmart was facing tremendous pressure from a case where so many claims were being made against it in one case before one judge," said Slotnick. "Now each individual will have to find a lawyer to fight their case and I would question whether most individuals will want to do that," he added.

Melissa Hart, a constitutional law expert at the University of Colorado school of law, said the US courts were increasingly "hostile" to cases that seemed to be pushing for systemic change.

"It's another signal from the courts that they are not going to let you push for change through the court. The courts are saying they are about individual harm, not systemic change," she said. "In the 1970s and 1980s there was a lot of hope that a law suit could change the world. This court is saying: 'No, it can't'."

Lowell J. Kuvin is a Labor and Employment Lawyer

Lowell J. Kuvin is a Labor and Employment Attorney

Restaurant Chain Using Tip Sharing To Curb Payroll Costs

With the Great Recession pinching profits, restaurant chains both big and small are searching for every way possible to trim costs and boost profits.

Wait staff tips have become one target of such efforts.

While most patrons, it seems safe to assume, still view tips as a way of rewarding good service, restaurants are increasingly viewing those tips as a way of reducing payroll costs.

Darden Restaurants, one of the largest restaurant companies in the U.S., recently began rolling out a mandatory tip-sharing scheme in its Olive Garden and Red Lobster Restaurants. 

Part of an initiative to reduce the company's annual wage costs by around $40 million, the plan, which was detailed in a recent article in the Orlando Sentinel, establishes percentages that servers are required to share with others. This new "tip-out" percent is, in turn, being used to justify reductions in hourly wage rates paid to busboys and bartenders.

Though Darden's official spokesman was reluctant to share details with the media, employees at locations where the plan has already been implemented complain that their earnings have been substantially curtailed by this new approach.

Such mandatory tip sharing stratagems have become easy to implement now that most guests pay with "plastic." Restaurants retain tips received as digital tender, then subsequently divide up and disburse the tip monies through their payroll systems.

Darden is also reportedly looking to reduce the number of full-time employees in its restaurants, replacing them instead with less expensive part-time associates.

Some in the industry have speculated that such cost cutting is shortsighted, since it reduces the financial incentive that otherwise encourages wait staff to deliver top quality service.

Muslim Woman Sues Abercrombie & Fitch Over Hijab

SAN FRANCISCO (AP) — A former stockroom worker for Abercrombie & Fitch Co. sued the clothing retailer in federal court Monday, saying she was illegally fired after refusing to remove her Muslim headscarf while on the job.

Hani Khan said a manager at the company's Hollister Co. store at the Hillsdale Mall in San Mateo hired her while she was wearing her hijab. The manager said it was OK to wear it as long as it was in company colors, Khan said.

Four months later, the 20-year-old says a district manager and human resources manager asked if she could remove the hijab while working, and she was suspended and then fired for refusing to do so.
It's the latest employment discrimination charge against the company's so-called "look policy," which critics say means images of mostly white, young, athletic-looking people. The New Albany, Ohio-based company has said it does not tolerate discrimination.

Still, Abercrombie has been the target of numerous discrimination lawsuits, including a federal class action brought by black, Hispanic and Asian employees and job applicants that was settled for $40 million in 2004. The company admitted no wrongdoing, though it was forced to implement new programs and policies to increase diversity.

"Growing up in this country where the Bill of Rights guarantees freedom of religion, I felt let down," Khan, now a college student studying political science, said at a news conference. "This case is about principles, the right to be able to express your religion freely and be able to work in this country."

Abercrombie defended its record in a comment provided to The Associated Press, saying diversity in its stores "far exceeds the diversity in the population of the United States."

"We comply with the law regarding reasonable religious accommodation, and we will continue to do so," said Rocky Robbins, the company's general counsel. "We are confident that when this matter is tried, a jury will find that we have fully complied with the law."

The lawsuit filed in U.S. District Court in San Francisco comes after the Equal Employment Opportunity Commission ruled in September that Khan was fired illegally. Khan's lawsuit was filed in conjunction with the EEOC's lawsuit.

It is not the first time the company has been charged with discriminating against Muslim women over the wearing of a hijab.

In 2009, Samantha Elauf, who was 17 at the time, filed a federal lawsuit in Tulsa, Okla., alleging the company rejected her for a job because she was wearing a hijab. That case is still ongoing.

The EEOC filed another lawsuit for the same reason, saying the company denied work to a hijab-wearing woman who applied for a stocking position in 2008 at an Abercrombie Kids store at the Great Mall in Milpitas, Calif.

Khan's attorney said her client is looking to get Abercrombie to change its "look policy" to allow religious headscarves to be worn by employees, and for unspecified damages. The lawsuit alleges violations of federal and state civil rights and employment laws.

"Abercrombie prides itself on requiring what it calls a natural classic American style. But there's nothing American about discriminating against someone because of their religion," said Araceli Martinez-Olguin, an attorney with the Legal Aid Society-Employment Law Center.

"Such a look policy cannot be squared with our shared values. No worker should have to choose between their religion and their job."

Florida's New Minimum Wage June 1, 2011

Florida's new minimum wage is $7.31 an hour, up from $7.25, takes effect on Wednesday. That's the minimum amount employers must pay employees, including domestic workers.

The state's minimum wage was increased after a successful Constitutional challenge by the National Employment Law Project and Florida Legal Services. The worker advocacy groups sought to correct an error in the method used by the state work force agency in calculating an adjustment in the minimum wage for inflation.

For tipped workers, the increase is from $4.23 an hour to $4.29 an hour, with the remaining $3.02 to made up by tips.

If your employer is not paying you properly, contact my office at 305.358.6800.