It's Walmart's World, Pt. 2

The Supreme Court's Dukes vs. Walmart, raising the bar for plaintiffs in class action suits, means workers who already have it bad in this economy probably won't have it any better, and won't be able to do much about it.

Can't Win. Don't Try.

The lesson Betty Dukes and other workers will learn after Dukes v. Walmart was best summed up by Bart Simspon [1], in the Simpsons episode "Homer at the Bat."

[2]

Marge: What makes you think this Darryl Strawberry character is better than you?

Homer: Marge, forget it. He's bigger than me, smarter than me, faster than me, stronger than me, and he already has more friends around the plant than I do.

Bart: You make me sick, Homer! You're the one who told me I could be the best at anything if I just put my mind to it!

Homer: Well, now that you're a little bit older, I can tell you that's a crock! No matter how good you are at something, there's always about a million people better than you.

Bart: Gotcha. Can't win, don't try.

It's the same lesson learned by the Alaskan fishermen whose livelihoods were devastated by the Exxon Valdez Oil spill

The most effective way to seek justice against corporations like Walmart is for individual workers (and consumers) to unite in defense of their common interests. Hence, Walmart, wants cases such as Dukes' handled on an individual basis. But the individual has no leverage with large corporate entities. Instead, the individual stands alone against the deep pockets of the corporation.

Even the ability to bring class action suits against large companies is no guarantee of success for the plaintiffs. The case of Alaskan fishermen whose livelihoods were devastated by the 1988 Exxon Valdez oil spill [3], illustrates this. Brian O'Neill, the attorney who handled the case, pro bono, on behalf of 2,600 hundred fishermen said the case took two decades to wind through the courts because Exxon used its considerable resources to drag the case out.

CNN: Did anything surprise you once you started representing the fishermen and taking on Exxon after the Valdez spill?

O'Neill: I thought that -- like a lot of people think now with regard to BP -- that Exxon would want to settle the case relatively early and move on and I was surprised a number of times with the fact that this was World War III to them, and they dealt with it that way ...

They spent over $400 million on lawyers, essentially defending [against] our claims. They took every appeal they could take and they took every delay they could take and filed every motion they could take.

Don't kid yourself: the oil companies have the best lawyers money can buy.

...

CNN: You mentioned the legal system would be one of their biggest problems: can you elaborate on that?

O'Neill: Well if a company is rich enough and powerful enough to hire hundreds of lawyers they can essentially bring the legal system to a halt. They can.

Most of these fishermen no longer believe that the court system of the United States provides equal justice. They've come to a conclusion that is the same as the conclusion that I've come to, and that is that our governmental institutions will always bail out big oil, and they did here.

Even standing together was no guarantee of justice. Exxon used its vast resources to keep the lawsuit in court for more than 20 years, by employing its army of lawyers against the single lawyer for the 2,600 fishermen. The company slowed the legal process to a near halt with countless delays and motions. They could afford to do it, and it cost them less in legal fees than they might have lost otherwise. In the end, the Supreme Court cut severely the damages Exxon would pay to the fishermen

Proponents of the ruling are already praising the court for "taking a stand for the individual," [4] pointing out that the 1.5 million plaintiffs are free to pursue individual claims and file individual lawsuits against Walmart. Even as plaintiffs in much small suits, I can't imagine that the individual women in question would have any better luck bringing cases against the individual managers or the management of individual stores either. After all, wouldn't they still have Walmart's monetary might behind them?

Remember, Ms. Dukes earns so little that she still lives with her mother, and sometimes can't afford lunch. Now, there's little incentive for most lawyers — who, like the rest of us, have to earn a living somehow — to represent plaintiff's like Ms. Dukes, no matter how just her grievance against Walmart might be: She can't afford a lawyer or match the deep pockets of Walmart in court. If she could, she wouldn't need to file suit in the first place.

The majority of the court may see the cass as a matter of "1.5 million disputes about potential discrimination" [5], but Walmart is unlikely to face 1.5 million lawsuits for one simple reason. Individually, most the women probably can't afford the legal fees to bring a lawsuit, even if they can prove discrimination.

Plus, without class action, lawyers have little incentive to represent them. The only law firms with an incentive to take on these individual cases are likely to be those that can afford to do so on a contingency basis, and then work several years (nine, in Dukes' case) for a percentage of the reward — if they win — that amounts to far less than they'd have gotten from paying clients. According to the New York Times article, the average wages lost per year by the women in the rejected Walmart class are around $1,100. Truth and justice aside, even lawyers have to earn enough to pay the rent and keep the lights on.

So, even, with a winnable case, the reward is too small for most law firms to take these cases on contingency. In that case, why bother?

Living in a "No-Quit" Economy

The implications of the court's ruling are even more troubling when you consider that the women who joined Ms. Dukes' case are, like millions of Americans who (for the moment) still have jobs, living and working in what Matt Yglesias called the "no-quit economy" [6] that this recession has created.

[7]

Matt Cameron wrote a good post yesterday about the toll of high unemployment on the employed majority [8]. When the economys at or near full employment, then quitting your job is a very credible threat. You, as a worker, have some real leverage over your employer that lets you bargain for better wages or working conditions or find them elsewhere. When unemployments at 9.1 percent, its a very different world. Unless youre Dwight Howard, you need your job more than your boss needs you.

Cameron's post, which Yglesias references, stems from a BusinessWeek article noting that 1 million fewer Americans per month have quit their jobs than in recent years [9].

From the factory floor to the boardroom, few Americans these days are willing to tell the boss to shove it. Many of those who have weathered the recession with their jobs intact are now sheltering in place, either fearful of risking a change or simply lacking the opportunity. Since January 2009, an average 1 million fewer Americans per month have quit their jobs than in previous years. Through April, the most recent data available, that adds up to 28 million Americans stuck in jobs they would have left in ordinary times.

That's a lot of careers slowed and dreams deferred.

...The willingness of employees to quit their jobs "is probably the best single indicator of how confident workers are," says Lawrence Katz, a Harvard University labor economics professor. "When people are unwilling to quit, they don't have the leverage to press for wage increases."

Right now, the buying power of paychecks is slipping. After inflation, average hourly earnings for U.S. workers fell 1.6 percent over the past year through May. For the first year and a half of the Obama Administration, real hourly wages had been flat.

You don't need a Mensa membership to figure out most people who are fortunate enough to still have a job, aren't likely to quit even if work gets harder and the boss gets tougher. We know that unemployment, perhaps even long-term unemployment, would be tougher. So, we tough it out, put up with more, and even take fewer vacation days. In fact, we gave up about $67 million in those earned benefits we call vacation days in 2010 [10]. (And 72% check in with work when we do take vacations.)

What worker's know about the state of the job market, employers surely know, as the Dilbert cartoon above illustrates. Mike Konczal [11] explained it earlier this month, after reflecting on the latest jobs numbers:

One doesnt have to be a strict proponent of game theory to understand that if your boss understands you can quit and find another job easily, he or she is more likely to create a respectful job atmosphere. And if your boss understands you are locked, they are much more likely to create an environment where domination is the norm. And what makes it easier to quit your job? Full employment.

So, it's hardly a surprise that the recession brought with it a rise in workplace bullying [12], as an increase in verbal abuse, disciclinary discharge, attendance crackdowns, surveillance, forced overtime and greater productivity demands [13] as employers gain by squeezing more out of fewer employees for less [14] than they might in a better economy.

The treatment of workers by American corporations has been worse far more treacherous than most of the population realizes. There was no need for so many men and women to be forced out of their jobs in the downturn known as the great recession.

Many of those workers were cashiered for no reason other than outright greed by corporate managers. And that cruel, irresponsible, shortsighted policy has resulted in widespread human suffering and is doing great harm to the economy.

The recession officially started in December 2007. From the fourth quarter of 2007 to the fourth quarter of 2009, real aggregate output in the U.S., as measured by the gross domestic product, fell by about 2.5 percent. But employers cut their payrolls by 6 percent.

In many cases, bosses told panicked workers who were still on the job that they had to take pay cuts or cuts in hours, or both. And raises were out of the question. The staggering job losses and stagnant wages are central reasons why any real recovery has been so difficult.

They threw out far more workers and hours than they lost output, said Professor Sum. Heres what happened: At the end of the fourth quarter in 2008, you see corporate profits begin to really take off, and they grow by the time you get to the first quarter of 2010 by $572 billion. And over that same time period, wage and salary payments go down by $122 billion.

If you're a worker whose already been dealt a demotion and a pay cut, and the boss adds abuse to that list? What are you gonna do?

Sue 'em?

In a Walmart World and a "no-quit" economy? Good luck with that. Especially if your case makes it to this Supreme Court.

The days of "Take this job and shove it" are over, and workers seem to have few options for handling workplace abuse and injustice. Besides just enduring it.