Supreme Court Decision May Help Employers With Class Actions

The U.S. Supreme Court’s March 27 decision vacating an anti-trust lawsuit against Comcast Corp. has potentially broad applications and may help employers defend against future employment class actions. Comcast Corp. v. Behrend (2013). 

The class action in Comcast was brought under Rule 23(b)(3) of the Federal Rules of Civil Procedure. This allows plaintiffs to be certified to bring a class action if they can show that class members have predominantly common issues and that a class action is the most effective way to resolve the dispute. In Comcast, the Supreme Court interpreted Rule 23(b)(3) to require that “damages have to be provable on a classwide basis.”  Therefore, where damages vary greatly among individuals in a proposed class, as they often do in employment cases, a class may not be certified.  

This continues the trend started by the Supreme Court’s 2011 ruling in Wal-Mart Stores, Inc. v. Dukes making it tougher for plaintiffs to certify class actions. In Wal-Mart, the court held that the plaintiffs could not seek significant monetary relief in their employment discrimination class action by filing under Rule 23(b)(2). This has caused most employment class actions since to be filed under Rule 23(b)(3). Now, the Comcast decision gives employers another argument against class certification under Rule 23(b)(3)—varying damages amounts among class members.  However, it remains to be seen how district courts will apply the Comcast decision and whether some will limit its application to anti-trust cases only.