Industry Market Trends

Employment Discrimination Cases Reach Record Levels

Jul 19, 2011

The U.S. Supreme Court recently threw out a massive class-action sex-discrimination lawsuit against Wal-Mart. The decision came a few months after job-bias claims were reported to have hit a record high in 2010.

The number of job-bias claims has risen steadily over the past few years, with an unprecedented 99,922 claims filed in fiscal year 2010, according to recent data from the United States Equal Employment Opportunity Commission (EEOC). While some observers attribute the higher numbers to the recession and other economic pressures faced by workers, others note that workers are becoming more aware of their rights and more confident in standing up for them.

Last year's rise, representing a 7.1 percent gain over 2009 claims, comprises job-bias claims regarding race, sex, age, disability and national origin discrimination, as well as claims filed under "retaliation" and the Equal Pay Act. Retaliation, wherein an employer punishes an employee who seeks assistance internally or with the EEOC about possible discrimination, led as the main cause for suits, with 36,258 cases filed.

Retaliation was followed by racial (35,890 cases), sex (29,029 cases) and disability (25,165 cases) discrimination. The EEOC also reported 23,264 age-discrimination claims filed and 3,790 allegations based on religion. Because some cases are filed citing multiple instances of various types of discrimination, the number of total cases filed is less than the sum of the different case types listed.

With nearly 100,000 private-sector workplace discrimination charges in 2010, observers disagree on the cause of the rise in complaints.

Michael Burkhardt, a lawyer who works for employers, does not think discrimination is running rampant. "I think it's an overstatement to assume there has been in increase in discrimination in the workplace," Burkhardt told the Wall Street Journal, noting that a portion of discrimination cases found to have reasonable cause has remained at about 5 percent for several years.

Joe Trauger, vice president of HR policy for the National Association of Manufacturers (NAM), links the high number of claims to economic problems, telling the Journal, "Anytime we go into a recession or the economy gets a little shaky, the numbers seem to spike a bit."

The EEOC itself has also undergone changes that might have contributed to the higher number of claims. The agency has a bigger budget and more staff, and has overhauled its website, helping workers better understand their rights.

"People are better informed of their rights these days," employment attorney Audrey Mross said in a Dallas Business Journal report. "Information is more readily available, and the EEOC website and its counterparts are extremely user-friendly."

Additionally, the 2008 alterations to the Americans with Disabilities Act have helped discrimination victims bring suits against employers alleged to have exercised bias against them. "The EEOC has identified disability as being a protected category that they want to put new emphasis on," Mross explained.

The most high-profile employee discrimination case of the year was recently decided by the U.S. Supreme Court. Called "one of the most important class action cases in generations," Wal-Mart Stores Inc. v. Dukes was the largest class action suit in U.S. history, claiming that the retail giant's policies and practices had led to countless discriminatory decisions over pay and promotions, and seeking billions of dollars on behalf of more than 1.5 million female workers.

Late last month, the Court sided with Wal-Mart, ruling in a 5-4 decision that the case could not continue as a class action suit based on the plaintiffs' varied circumstances and Wal-Mart's lack of uniform policy.

Justice Antonin Scalia observed that Wal-Mart had a policy against having uniform employment practices, delegating many hiring and promotion policies to local managers, the New York Times explains. Due to this variance, the case for a class action suit was dismissed.

On the other hand, Justice Ruth Bader Ginsburg stated, "The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects," and this lack of uniformity added to the bias experienced by the plaintiffs.

Unhappy with the ruling, some of the plaintiffs are trying to pursue other routes to hold Wal-Mart accountable to what they consider discrimination. "We may try to formulate one or more smaller classes consistent with the ruling, where we have substantial evidence of a policy of discrimination," plaintiff attorney Joe Sellers told MarketWatch.

While the ruling disappoints employee rights activists, its technical implications primarily affect the way class action lawsuits may be filed in the future.

Lawyer Gerald Maatman, Jr. told MarketWatch that in class action lawsuits in the future, "a representative class can get on the stand and tell their story, and it's the same story for everyone," or the class action will be barred.


Enforcement and Litigation Statistics

U.S. Equal Employment Opportunity Commission

...Job Bias Charges Hit Record High of Nearly 100,000 in Fiscal Year 2010

U.S. Equal Employment Opportunity Commission, Jan. 11, 2011

Enforcement & Litigation Statistics: Charge Statistics FY1997 through FY2010

U.S. Equal Employment Opportunity Commission

Employee Discrimination Suits Jump 7.1%

by Kerry Panchuk

Dallas Business Journal, Jan. 11, 2011

Charges of Bias at Work Hit Record

by Melanie Trottman

The Wall Street Journal, Jan. 12, 2011

Wal-Mart v. Dukes: Supreme Court Is Pro Rule Of Law

by Helgi C. Walker

Huffington Post, June 30, 2011

Supreme Court Blocks Bias Suit Against Wal-Mart

by Adam Liptak

The New York Times, June 20, 2011

Wal-Mart Wins Supreme Court Sex-Bias Case

by Ruth Mantell

MarketWatch, June 20, 2011