JOAN B. GOTTSCHALL, District Judge.
On November 29, 2011, in response to defendant's motion to decertify the class based on the Supreme Court's decision in Wal-Mart, Inc. v. Dukes, 131 S.Ct. 2541 (2011), the court agreed to reconsider whether the class should be decertified in this case. Wal-Mart required the party seeking class certification to demonstrate with proof, at the class certification stage, that the requirements of Rule 23 are satisfied. One of those requirements, the focus of the decision in Wal-Mart, was the commonality requirement of Rule 23(a)(2): that the plaintiff be permitted to represent only those who suffered an injury like his. The parties have submitted briefs and other materials pursuant to the November 29 order.
In Wal-Mart, the named plaintiffs sought to represent a class of women injured by the subjective pay and promotion decisions of their local managers; they claimed that Wal-Mart, by refusing to cabin its managers' discretion, was condoning-and was therefore responsible for—the discriminatory treatment they claim resulted. (In addition, they claimed that a strong and uniform corporate culture permitted bias to infect the discretionary decisionmaking of thousands of Wal-Mart managers.) Plaintiffs sought to represent a class of all women employed at a Wal-Mart domestic retail store at any time since December 1998 "who have been or may be subjected to Wal-Mart's challenged pay and management track promotions policies and practices." Wal-Mart, 131 S.Ct. at 2549. As is relevant to the case at bar, the class was defined so that the only people who would recover were those injured by the challenged subjective pay and promotion decisions of their local managers. Nevertheless, to figure out who those people were, the suit would require an examination of millions of employment decisions, and it was impossible to say in advance that the examination of each would yield the same answer to the question of why a given employee was disfavored. (Presumably, while large numbers of decisions might be based on the managers' uncabined and biased discretion, large numbers would be based on other factors altogether.) While recognizing that under some circumstances a company's giving of discretion to lower-level supervisors can be a basis for Title VII liability, this "does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common."Id. at 2554. "In such a company," the Court stated, "demonstrating the invalidity of one manager's use of discretion will do nothing to demonstrate the invalidity of another's." Id.
Wal-Mart makes plain that it is not sufficient to define the class in a way that conditions relief on sharing the named plaintiff's injury unless the plaintiff can show, at the certification stage, that the named plaintiff and the members of the putative class shared a common injury. At the certification stage, along with satisfying the other requirements of Rule 23, plaintiff must demonstrate that he and the members of the putative class share the same injury. In the instant case as in Wal-Mart, no class member can recover unless, at the merits stage, it is demonstrated that that class member was terminated (or constructively discharged) as a result of the reorganization. But Wal-Mart makes plain that it is not sufficient to wait until the merits stage to determine whether the plaintiff's injury, and the class members' injury, is the same. Rather, at the certification stage, the named plaintiff must show that the class satisfies Rule 23, including the requirement the members of the class share a common injury.
The Seventh Circuit's recent treatment of Wal-Mart in McReynolds v. Merrill Lynch, Inc., is helpful. In McReynolds, plaintiffs claimed that Merrill's practice of delegating discretion over broker compensation to "Complex Directors" (branch office supervisors) through their implementation of the company's teaming policy (by which the directors had discretion to approve the formation of employee teams to solicit and service clients) and account distribution policy (by which customers' accounts were transferred when a broker left Merrill Lynch based upon competing brokers' records of revenue) had a disparate impact on African-Americans. Plaintiffs claimed that the teams operated like fraternities with brokers choosing teammates most like themselves, to the disadvantage of minorities, and that if minority employees failed to generate as much revenue as white employees on teams did, they would suffer similarly in account distributions. The plaintiffs did not contend that the company (or even the directors) acted with discriminatory intent. Rather, by maintaining a policy of director discretion whereby directors "permitt[ed] brokers to form their own teams and prescrib[ed] criteria for account distributions that favor the already successful-those who may owe their success to having been invited to join a successful or promising team," McReynolds, 2012 WL 592745, at *7, the company was maintaining policies that had a disparate impact on racial minorities.
The Seventh Circuit held that the existence vel non of company-authorized policies that authorized broker-initiated teaming and based account distributions on past success was a common question that could most efficiently be determined on a class-wide basis. The resolution of this issue on a class-wide basis might result in an injunction, however, but could not resolve individual class members' claims. Rather, "[e]ach class member would have to prove that his compensation had been adversely affected by the corporate policies, and by how much." Id. at *8. At the pecuniary relief stage as opposed to the injunction stage, there might be no common issues. In that case, individual trials would be necessary. Those trials would be less rather than more complex, however, if the common issue of the existence and legality of the challenged company policy had been already determined.
Having reviewed the parties submissions in light of Wal-Mart and McReynolds, this court concludes as follows:
Plaintiff has one week to provide its evidence as to the number of persons who should be included in its class, based on the above criteria. The court will hear brief oral argument on Monday, March 26, 2012, at 9:00 AM.