Court Tosses Class Suing Costco for Discrimination

(CN) - The 9th Circuit on Friday rejected a class action for gender discrimination against Costco warehouse-store chain, finding that a lower court had not examined the plaintiffs' commonality rigorously enough in light of the recent landmark U.S. Supreme Court ruling favoring Wal-Mart.

The federal appeals court's unanimous ruling does not entirely doom the claims of current and former Costco employees, who say they were passed over for promotion because of their gender. The San Francisco-based court vacated a lower court's certification of the proposed class and remanded the case for a harder look at the plaintiffs' commonality.

In doing so, a three-judge panel of 9th Circuit judges cited the Supreme Court's June ruling in Wal-Mart Stores. v. Dukes, which sharpened the class-action certification game significantly by prohibiting more than a million Wal-Mart employees from suing the retail giant as one class. Last year, the 9th Circuit had ruled to send the massive class on to trial.

"Given this new precedent altering existing case law, we must remand to the District Court," Judge N. Randy Smith wrote for the panel.

"The District Court failed to conduct the required 'rigorous analysis' to determine whether there were common questions of law or fact among the class members' claims," he added. "Instead it relied on the admissibility of plaintiffs' evidence to reach its conclusion on commonality."

In a small silver lining for the plaintiffs, the panel agreed that Elaine Sasaki can represent the proposed class of female Costco employees who were passed over for promotion because of their gender.

Currently an assistant general manager with Costco in Visalia, Calif, Sasaki filed a discrimination complaint with the Equal Employment Opportunity Commission in 2005 after being passed over for promotion several times. She joined the proposed class action in 2006 with two other named plaintiffs, but she's the only one of them still working for the company. This gives Sasaki some incentive to seek change within at Costco, rather than just money, the court found.

"As a current employee who continues to be denied promotion, Sasaki has incentive to vigorously pursue injunctive relief as well as monetary damages on behalf of all the class members," the ruling states.

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