posted on Friday, April 13, 2007 11:39 AM
by
Lou Michels
Class Action Trend -- Demotion / Promotion / Hirings / Internal Practices
The recent settlement of Federal Express's 9th Circuit race discrimination case, for more than $53 million, points to an increasing trend in the class action arena -- suits based on claims that discriminatory internal practices permeate the entire employment decision making structure of a company and are reflected in disparate hiring, promotion, demotion or discipline actions.
This particular case, filed in 2003 in Northern California (what a surprise), alleged a pattern of race discrimination against blacks and Hispanics through a disproportionate assignment of minorities to part-time or so-called "casual" positions, versus full-time jobs. The suit also alleged that minorities were provided with fewer promotions than non-minority employees, disciplined more frequently for petty offenses, and paid less over all.
Although the settlement is gigantic, it is probably miniscule compared to the cost of defending a certified class of tens of thousands of employees in different jobs, across different stores and management teams. In fact, once a court certifies such a class, it becomes almost cost prohibitive for an employer to backtrack through the myriad of employment decisions related to just the class representatives to try to prepare a defense.
So the lesson to all of us now is to beware of employment practices that might impose some kind of a statistical glass ceiling on certain groups. Some federal, and many state, judges seem more than willing to certify classes comprised of wildly disparate individual cases, as long as an over-all trend is alleged and can be supported with relatively limited evidence. These kinds of suits also effectively discourage the kind of decentralized decision-making used by many companies given current improvements in communication. The existence of a corporate human resources department with arguable responsibility for company policies and their implementation can be used as evidence to defeat a claim that individual store managers were responsible for the employment decisions at issue. The message is clear -- monitor your activities companywide or face a substantial risk of multi-plaintiff or class action litigation.