A Group of Women Suing Microsoft Have to Beat Supreme Court Precedent

(Bloomberg Businessweek) --  
Moussouris v. Microsoft Corp.
Case #2:15-cv-01483

① The Origin

Katie Moussouris, a Microsoft engineer specializing in security issues, claims she was told during her May 2012 performance review that she’d had an outstanding year, and on a scale of 1 to 5 she’d earned the second-highest rating, a 2—but because of the number of employees who can get top ranks is capped, she got a 3 instead. The same thing happened in 2013. She left in 2014 and sued in 2015, alleging she was passed over for promotion in favor of less qualified men and was paid less than her male peers.

② The Lawsuit

Moussouris and her lawyers sought class-action status on behalf of 8,000 women on the grounds that all were routinely discriminated against at Microsoft. The plaintiffs got a boost when U.S. District Judge James Robart ruled they could seek evidence from Microsoft. What the lawyers found gave them high hopes—for instance, according to one of the plaintiffs’ expert witnesses, women at the company earn a “ statistically significant” 8.6 percent less than men. Microsoft denies discriminating on pay and promotions.

③ The Issue

The plaintiffs had to overcome one important hurdle: a 2011 Supreme Court case, Wal-Mart Stores Inc. v. Dukes. In a 5-4 decision written by the late Antonin Scalia, the court ruled that because thousands of low-level managers were making the pay and promotion decisions, there wasn’t enough “commonality” among the plaintiffs to justify a class. The Microsoft plaintiffs believed that corporate policies such as the forced ranking system were a big part of the problem, making it an issue of corporate culture, not individual decisions.

④ The Result

Robart ruled for Microsoft in July, citing the Dukes precedent. The plaintiffs, he wrote, “have not identified a common mode of exercising discretion that pervades the entire company.” However, in late September, the Ninth Circuit court of appeals agreed to review the decision to deny certification. If the appeals court certifies the class, Microsoft will have to decide whether to take the case to trial—where its alleged discrimination will get a public airing—or settle and move on.

● Then Again …

How long will the reprieve last? With judicial vacancies being rapidly filled by conservative jurists, class actions may soon be a relic. That would be a shame. While there have certainly been frivolous or abusive class actions, the suits are a powerful tool to right real wrongs.

● Class Is In?

In the wake of the Dukes decision, there was talk that the Supreme Court had gutted class actions. But they’ve seen a resurgence, in large part because appeals courts aren’t interpreting Dukes as narrowly as business would like, says Robert Klonoff, a professor at Lewis & Clark Law School. —Nocera is a business columnist for Bloomberg Opinion.

To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net

©2018 Bloomberg L.P.