7th Circuit rules on Rolls-Royce job-bias case

A day after the nation’s highest court heard arguments on the largest female gender-discrimination case in history, the 7th Circuit Court of Appeals has delved into that same territory and upheld a federal judge’s decision denying class certification in a sex discrimination suit in which a group of female Rolls-Royce employees accused the manufacturer of paying women less than men for the same or similar work.

The 18-page decision came late Wednesday afternoon in the case of Sally A. Randall, et al. v. Rolls-Royce Corp., No.10-3446, delving into how far the federal class-certification rules can be stretched when questions exist about the adequacy of certain plaintiffs and potential class members.

U.S. Judge Sarah Evans Barker in the Southern District of Indiana last year denied a class-certification motion by Sally Randall and Rona Pepmeier, who asked the court to certify a class comprised of all women who’d been employed by Rolls-Royce in Indianapolis at certain pay levels since October 2004. The suit alleged the company had paid women less than men for the same or similar work, and perpetuated the pay disparity over time by failing to equitably adjust female workers' salaries. The January 2009 suit alleged both intentional and disparate impact pay discrimination and retaliatory acts, and violations of Title VII and the Equal Pay Act.

They filed the suit under Federal Rule of Civil Procedure 23(b)(2), which offers slightly more relaxed requirements in proving class status than Rule 23(b)(3), which mandates notice for all potential class members. Randall and Pepmeier argued that the commonality requirement of the class-certification rule was met because Rolls-Royce had a company-wide policy of premising pay on prior base salaries carried forward from the past, but Judge Barker was skeptical of whether that so-called policy had any meaning or value in determining whether all the plaintiffs or potential class members shared similar facts.

Judge Barker also questioned whether there was a common element between all the named plaintiffs and potential class members.

The 7th Circuit affirmed Judge Barker’s denial of the plaintiffs' class-certification motion and determined that she had rightly granted summary judgment in the company’s favor. The appellate panel agreed with Judge Barker that the named plaintiffs here appear to be inadequate class representatives because of varying pay issues and even conflicts about their involvement in management decisions applying to those lower employees who could be class members.

Judge Richard Posner wrote for the panel that the proper approach in this case would have been for the plaintiffs to seek class certification under Rule 23(b)(3) — which requires full notice so they can opt out if they want to bring an independent suit for damages or other monetary relief. Plaintiffs should ask for injunctive as well as monetary relief, he wrote. Reversing the denial of class certification would actually jeopardize the ability of unnamed class members to obtain relief in individual suits or in a subsequent class action, according to the ruling.

“The plaintiffs argue that if only equitable relief is sought, a class action suit may be maintained under Rule 23(b)(2) even if the equitable relief is mainly monetary,” Judge Posner wrote. “We disagree. To read ‘injunctive’ in the rule to mean ‘equitable’ is to become mired in sticky questions of differentiating between ‘legal’ and ‘equitable’ actions – and such questions abound.”

In noting how this case illustrates a need to calculate back pay for all class members and that 500 separate hearings would likely be needed for that, Judge Posner also said, “The monetary tail would be wagging the injunction dog” and that it wouldn’t provide final injunctive relief as the plaintiffs are contending.

While this appellate ruling affirms the District judge, it may not end there as larger questions still exist about the scope of Rule 23(b)(2) as the 7th Circuit interpreted it here. That is the same question being explored by the Supreme Court of the United States, which on Tuesday heard arguments in the giant gender-discrimination suit of Walmart v. Dukes, No. 10-277. The case involves a nationwide class-action suit potentially encompassing hundreds of thousands of female Wal-Mart employees alleging gender discrimination, and the legal question is whether claims of monetary relief can be certified under 23(b)(2) and if so, under what circumstances.

In writing this Rolls-Royce ruling on the Indiana suit, Judge Posner pointed out that “the present case is not as big a stretch, but it is big enough” as it relates to how far Rule 23(b)(2) can be stretched.

No timeline stands for the nine justices to decide the Wal-Mart case, but they’ll likely issue a ruling by the time their current term concludes at the end of June.