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Microsoft victory in gender bias lawsuit may not apply to similar cases

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By Karen Kidd | Jan 21, 2020

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Adler-Paindiris | Photo courtesy of Jackson Lewis

SAN FRANCISCO (Legal Newsline) –  A federal appeals court's decision to uphold denial of class certification in a gender bias case against Microsoft Corp. wasn't striking in its outcome and may not impact similar cases against other tech companies, a Florida-based employers' attorney said.

"I think it would have been striking had it been reversed," Stephanie Adler-Paindiris, a principal and co-leader in the class actions and complex litigation practice group at Jackson Lewis' Orlando, Florida, office, said. "However we believe the district court got it right and the Ninth Circuit agrees that they did as well."

Last month, the U.S. Court of Appeals for the Ninth Circuit rejected class certification in gender bias claims against Microsoft, affirming an earlier denial by a U.S. district court judge in Washington's Western District to certify a class.

The case is one of a number alleging gender discrimination in the tech industry. Last spring, Blind, an anonymous workplace social network used by many large tech companies, issued a report that found 37 percent of employees in the tech industry encounter sexism and sexual harassment in the workplace.

Other tech industry companies that have come under scrutiny gender discrimination, bias and other similar lawsuits include Google, Oracle, Twitter and Uber.

Cases against those companies may not go the same way as the Microsoft case did last month.

"While it's tempting to lump all these cases together because they are in the same industry and involve similar claims, I think it's important to remember that, especially in these cases, there are so many individualized circumstances that need to be considered, which is one of the critical lessons from Dukes," she said. "Dukes raised the bar on what is expected from plaintiffs when alleging violations of Rule 23, and it's more than simply showing that all class members were affected by a violation of the same statute."

The Washington Legal Foundation had filed an amicus curiae brief Dec. 24 in support of the denial of the motion.

"The Ninth Circuit opinion focused heavily on the seminal Walmart v. Dukes case and used the Dukes legal analysis as a road map for explaining why the district court was correct," Adler-Paindiris said. "For example, regarding the disparate impact claims, the Ninth Circuit held the district court correctly recognized that in order to satisfy the commonality requirement, the proposed class must raise a common question that will connect many individual promotional decisions to their claim for class relief and produce a common answer as to the crucial question - 'why was I disfavored?'"

The case involves the amended complaint filed in October 2015 by thousands of former and current Microsoft employees who filed a putative class action against Microsoft. The lawsuit alleged a Microsoft corporate culture of "intentional, company-wide discrimination against female technical employees."

The Ninth Circuit's memorandum struck down hopes for class certification in the case.

"The panel noted the putative class included thousands of members who acted as a manager once, were a lead or a manager, or were 'managers of managers,'" Adler-Paindiris said. "Even Katherine Moussouris, a named plaintiff of the proposed class, was a manager who had three of the putative class members report to her. Accordingly, the panel held that Moussouris has a conflict of interest with other putative class members."

In its five-page memorandum issued the day before Christmas, the appeals court found that the district court had not abused its discretion in ruling the putative class members failed to did not meet commonality requirements in their disparate claims.

Denial of class status in the case had hinged upon the U.S. Supreme Court's 2011 decision, written by the late Justice Antonin Scalia, in the employment discrimination case Walmart Stores Inc. v. Dukes. In that decision, the nation's highest court unanimously ruled that about 1.5 million women alleging employment discrimination against the large retailer could not receive class certification under Federal Rule of Civil Procedure, Rule 23.

"The allegedly discriminatory pay and promotion decisions in the instant case do not present common questions because the proposed class consists of more than 8,600 women, who held more than 8,000 different positions in facilities throughout the United States," the appeals court's memorandum said. 

"Further, appellants failed to identify a common mode of discretion throughout Microsoft because the individual managers had broad discretion over how to conduct the calibration meetings/people discussions, as well as over the decisions that they made at those meetings."

The memorandum was issued "not for publication," which means it is not to be cited or used as precedent in future cases.

Ninth Circuit judges Richard Anthony Paez and Johnnie Blakeney Rawlinson and U.S. District Court Judge Leslie E. Kobayashi concurred in the memorandum. Kobayashi, who sits the bench in U.S. District Court in Hawaii, had been designated to sit in the case.

The impact of the #MeToo movement also should not be underestimated as it "allows for the opportunity to further examine the critical issues relating to equal pay," Adler-Paindiris said.

"However, plaintiffs must still comply with the rigors of Rule 23," Adler-Paindiris continued. "The Nin Circuit's recent opinion is a good reminder that we need to look closely at the standard required to be met in such cases and recognize that sometimes the class action procedure may not be the right method to remedy the alleged wrong."

However, the class action against Microsoft probably is over.

"I do not think this case will be appealed," Adler-Paindiris said. "The Ninth Circuit relied on Justice Scalia's very sound opinion in Dukes in considering the issues at stake and found the plaintiffs to have not met the rigorous Rule 23 standard."

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