The Supreme Court put the brakes on a massive job discrimination lawsuit against mega-retailer Wal-Mart Stores Inc., saying the plaintiffs had not shown justification for sweeping class-action status that could have potentially involved hundreds of thousands of current and former female workers.
The 5-4 ruling Monday -- which addressed the claims in the lawsuit only in terms of whether they supported such a huge a class action -- was a big victory for the nation's largest private employer, and the business community at large.
The high-profile case-- perhaps the most closely watched of the high court's term -- is among the most important dealing with corporate versus worker rights that the justices have ever heard, and could eventually affect nearly every private employer, large and small.
"On the facts of the case," wrote Justice Antonin Scalia for the majority, the plaintiffs had to show "significant proof that Wal-Mart operated under a general policy of discrimination. That is entirely absent here."
He added, "In a company of Wal-Mart's size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction."
While this particular class action has effectively ended, the individual plaintiffs could band together and file a series of smaller lawsuits aimed at individual stores or supervisors.
Four more liberal justices agreed this particular class should not proceed to trial, but criticized the majority for not allowing the female workers to move ahead with their claims under a different legal approach.
The company said it was pleased with the court's decision.
At issue was whether as many as 1.6 million current and former female Wal-Mart employees could make a unified claim of systemic discrimination, which they say has occurred over the past decade, at least. The plaintiffs alleged women were paid less than, and were given fewer opportunities for promotion than, their male counterparts. They sought back pay and punitive damages against the world's largest retailer.
A divided 6-5 ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals last year had allowed the combined, multiparty litigation to move ahead to one trial, where a verdict against the company could result in tens of billions of dollars in damages.
The Supreme Court ruled only on whether the original lawsuit should be handled as a class action, instead of lower courts potentially being flooded with thousands of individual discrimination claims against the company. If the justices had ruled against Wal-Mart, permitting class-action status, it could have put severe pressure on the company to settle the claims out of court.
The lawsuit alleged the company's "strong, centralized structure fosters or facilitates gender stereotyping and discrimination." The workers who brought the suit also said women make up more than 70 percent of Wal-Mart's hourly workforce but in the past decade made up less than one-third of its store management.