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In the most closely watched decision of the year, the top US court ruled that Wal-Mart had no overarching employment policy so the women could not all have suffered discrimination for the same reasons.
A majority of five out of the nine justices concurred there were no grounds for what would have been the largest class action suit in history and that the world's largest retailer should not be held liable for the tens of billions of dollars in back pay and damages sought by the plaintiffs.
"The basic theory of their case is that a strong and uniform 'corporate culture' permits bias against women to infect, perhaps subconsciously, the discretionary decision-making of each one of Wal-Mart's thousands of managers -- thereby making every woman at the company the victim of one common discriminatory practice," the majority said.
But they said the only convincing evidence that the plaintiffs had been able to present was that Wal-Mart's policy was to allow local supervisors discretion over employment matters.
"On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices," it said.
"Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members claims for relief will produce a common answer to the crucial question why was I disfavored."
Reaction to the ruling was swift, with observers noting it created a "road map" for filing class action suits that was more favorable to employers.
David Sanford, who represented employees in a class action against Novartis, called it "yet another example of the court prioritizing the rights of big corporations over the rights of the American worker."
He noted that all three of the court's female justices were in the minority.
The largest private employer in the United States, Wal-Mart is a colossus with tens of millions of customers passing through its 3,400 US stores each week, and reaping more than 400 billion dollars a year in revenues worldwide.
The original case was filed a decade ago by six female Wal-Mart employees who claimed they systematically received lower pay than their male counterparts and were passed over for promotions.
The liberal-leaning Ninth Circuit Court in San Francisco agreed by a 2-1 vote in 2007 and again in a narrow 6-5 decision last April to grant the case the class-action status the women sought.
Lawyers representing the plaintiffs argued before the Supreme Court that women at Wal-Mart made up about two-thirds of the workers but only a fraction became store managers.
They also pointed out that in nearly every job category, women earned less than men, even though most had logged more years with the company.
"We brought the case in this size because we were challenging company-wide practices that discriminate, consistently discriminated against women in every one of the regions in which the company does business in this country," plaintiffs' attorney Joseph Sellers said.
But during the oral arguments, the justices were skeptical.
They questioned whether Wal-Mart's policies were uniform enough to permit between 500,000 and 1.5 million women to be lumped together in one case.
Wal-Mart also zeroed in on the enormity of the class-action, describing it in August as "larger than the active-duty personnel in the army, navy, air force, marines, and coast guard combined."
It maintained it was impossible to assert a case of discrimination based on company employment figures and said there was no pay difference between men and women at most outlets.
But Senator Patrick Leahy reacted angrily, saying that five male justices have "now decided that some corporations are too big to be held accountable."
"Discrimination in the workplace continues, and we need to make sure that all Americans are treated fairly, especially in these challenging economic times."
And Democratic Representative Rosa Delauro said the ruling was "yet another bad decision from the Supreme Court for women," calling it a blow "to the millions of women across the country facing workplace discrimination every day."