Wal-Mart Wins in Sex Bias Case

NEW YORK (TheStreet) -- Wal-Mart's (WMT) gender bias suit will not proceed as a class-action suit.

The Supreme Court ruled in favor Monday of Wal-Mart regarding decade-long complaints from more than 1 million former female employees who claim that managers at the discount giant made sexist decisions about promotions and pay.

Justice Antonin Scalia said for the court majority that the certification of the class was not consistent with a federal rule, and the back-pay claims were also improperly certified.

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The case would have been the largest class-action suit in history and could have cost Wal-Mart billions of dollars in back pay and potential damages.

Shares of Wal-Mart closed on Monday up 0.4% to $53.04, but were up as much as 1.5% following the ruling.

"We are pleased with today's ruling and believe the court made the right decision. Wal-Mart has had strong policies against discrimination for many years," Wal-Mart said in a statement. "The court today unanimously rejected class certification and, as the majority made clear, the plaintiffs' claims were worlds away from showing a companywide discriminatory pay and promotion policy."

The hearing focused on whether or not the lawsuit should advance, not if the allegations of the class action were legitimate.

In order for these women to proceed with their case they'd now have to file claims individually rather than en masse.

"Today's decision is deeply disturbing. The highest court in our nation has turned its back on collective remedy for workers facing widespread injustices," said Joe Hansen, international president of the United Food and Commercial Workers Union. "The UFCW will continue to demand accountability from Walmart to its workers who deserve fair treatment, fair pay and respect on the job."

The No. 1 retailer denies the allegations and said the women involved have worked at thousands of stores and make claims involving many different issues.

Allowing the lawsuit, according to Wal-Mart, would also prevent the company from denying claims made by each individual woman.

The Supreme Court's decision should make big businesses happy, as companies like Bank of America (BAC), Microsoft (MSFT) and General Electric (GE) threw their support behind Wal-Mart. These companies contest that allowing the lawsuit to move forward will open the floodgates to employment, antitrust and product-liability suits.

The U.S. Chambers of Commerce also sided with Wal-Mart, saying in a filing: "Employment cases are just the tip of the iceberg." If the suit is allowed to move forward, according to the chamber, it "would bury American businesses in abusive class-action lawsuits to the detriment of consumers, the U.S. economy and the judicial system itself."

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