Toward the end of the U.S. Supreme Court's 2011 majority
decision in Wal-Mart v. Dukes, Justice Antonin Scalia, who wrote
the opinion, spent a little time chastising the reasoning of the
en banc 9th Circuit, whose class certification ruling the
Supreme Court overturned. The circuit court had acknowledged
that former employees do not have standing to bring classwide
injunction or declaratory claims, Scalia wrote, so it held that
employees who'd left Wal-Mart as of the time the complaint was
filed couldn't be in the class. That didn't make sense, Scalia
said, because women who left Wal-Mart's employ after the
complaint was filed were similarly "ineligible for classwide
injunctive or declaratory relief."
Does that language constitute binding Supreme Court
precedent on the standing of former workers to demand reforms,
via injunctions or declaratory rulings, from their onetime
employers? The class standing of former workers didn't determine
the ultimate resolution in Dukes, in which the court shut a back
door to money damages by ruling that Wal-Mart women could not
obtain back pay via class certification under the looser
standard for an injunctive class. Scalia's opinion focused on
the individualized issues inherent in claims for back pay.
Nevertheless, in July 2012, when U.S. District Judge Leonard
Sand was considering the certification of an injunctive class in
a now famous gender discrimination case against Goldman Sachs,
he found that under Dukes, former employees can't request companywide reforms on behalf of all current workers. Sand
expressed "significant reservations" about his holding, which he
said addressed an issue of first impression in the 2nd Circuit.
But he said he was bound by Dukes.
"The Supreme Court's analysis of this issue, and its blanket
denial of standing to ex-employees, is not dictum: It was
necessary to the resolution of this case insofar as it
undergirded the invalidation of the 9th Circuit's 'predominance
test' and foreclosed certification," Sand wrote, noting that
even the dissenters in Dukes didn't contest the majority's
passing reference to the standing of former employees. "We are
therefore obligated to follow the rule, notwithstanding
misgivings about its wisdom."
Sand's ruling is not, however, the last word on this
question. Last week U.S. District Judge Jesse Furman looked
again at whether Dukes precludes standing for former employees
to bring classwide injunctive claims - and said that it does
not. Furman's very thoughtful 38-page decision, denying KPMG's
motion to dismiss a gender discrimination class action, says
that Dukes does not compel a blanket finding that former
employees don't have standing, as long as those former employees
want to be reinstated in their old jobs.
"This court respectfully disagrees with Judge Sand," Furman
wrote. "In fact, there are several reasons that the language
from Dukes ... should not be read to hold categorically that a
former employee seeking reinstatement can never seek injunctive
or declaratory relief against his or her former employer - a
holding that would apply not only in the class action context,
but also to individual Title VII claims."
Furman said that because the Supreme Court's Dukes ruling
did not depend on the standing of former employees, "there is a
strong argument that the passage quoted above is indeed dictum."
He said he was choosing instead to follow the reasoning of
courts that have said former employees with reinstatement claims
also have standing to sue for classwide injunctions and
That means, according to class counsel Katherine Kimpel of
Sanford Heisler, that the two name plaintiffs in the class
action against KPMG who claim they were wrongfully terminated
can ask for things like companywide changes in compensation and
human resources policies. "We're particularly pleased with this
decision," Kimpel said. "It's very thorough, comprehensive and
KPMG's counsel, Diane Saunders of Ogletree, Deakins, Nash,
Smoak & Stewart, referred me to a representative for the
auditor, who sent an email statement saying, "We continue to
believe this lawsuit is entirely without merit, and we intend to
vigorously defend ourselves."
(Reporting by Alison Frankel)
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