Robbing a Barren Vault: The Implications of Dukes v. Wal-Mart for Cases Challenging Subjective Employment Practices

Abstract

This article examines federal opinions from 2005-2011 challenging subjective employment practices under a 'disparate impact' or 'pattern or practice' theory to assess the likely impact of Dukes v. Wal-Mart on such cases. Although the Wal-Mart ruling favors employers, results suggest that the ruling’s effect on employer selection practices will be muted by the low prevalence of such claims. An average employer’s litigation risk in connection with such claims is so vanishingly small that I surmise they rarely examine or alter their subjective selection practices in response. However, the risk of a lawsuit challenging subjective employment practices was not homogenous across all employers. Fortune 100 companies faced a substantial risk – about 15% – of being subject to such a suit between 2005 and 2011 These mega-class actions are unlikely to withstand the more stringent certification standard articulated in Wal-Mart. I discuss the potential policy implications of a litigation landscape in which the very largest disparate impact and pattern or practice class actions are no longer viable. I observe that the public value of these mega-class actions is difficult to assess because the plaintiffs were never forced to prove the availability of a less discriminatory selection procedure. I then offer potential regulatory options to address the overall dearth of cases challenging subjective employment practices and the problematic employer incentives generated by Wal-Mart.