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Nelson v. Wal-Mart Stores

May 16, 2007


The opinion of the court was delivered by: Wm. R. Wilson, Jr. United States District Judge


Pending is Plaintiffs' Motion for Class Certification,*fn1 to which Defendants have responded.*fn2 A Class Certification Hearing was held May 31, 2006. After the hearing, both parties submitted proposed findings of fact and conclusions of law.*fn3 I submitted additional questions to the parties, and held another hearing, on April 24, 2007, on the motion to certify the class. For the reasons below, Plaintiffs' Motion for Class Certification is GRANTED in part and DENIED in part.


Plaintiffs Tommy Armstrong and Daryal T. Nelson are African American truck drivers who applied for positions as over-the-road truck drivers at transportation offices operated by Defendant Wal-Mart Transportation LLC, a wholly owned subsidiary of Defendant Wal-Mart Stores, Inc. (collectively "Wal-Mart"), but were rejected. This case challenges Wal-Mart's hiring practices for over-the-road truck drivers.

Wal-Mart's Logistics Division is divided into two subdivisions: (1) the Transportation Division in charge of Wal-Mart's truck fleet and its support; and (2) the Distribution Division in charge of the distribution centers that the trucking fleet services.*fn4 Wal-Mart's Transportation Division includes approximately 8,000 drivers, in 47 field transportation offices nationwide, who deliver goods and products to Wal-Mart stores and Sam's Clubs across the country.*fn5 Every transportation office is located on-site at one of the distribution centers it services.*fn6 The transportation offices have their own management structure, including a general transportation manager in charge of each office and a personnel manager who, together with the general transportation manager, is responsible for hiring over-the-road truck drivers.*fn7 The general transportation manager and personnel manager report to regional managers, who in turn report to either the east or west vice president of the Transportation Division.*fn8 Those vice presidents report to the senior vice president of the Transportation Division, who reports directly to the executive vice president of the Logistics Division.*fn9

Each over-the-road truck driver is assigned to a transportation office.*fn10 Every transportation office, with minor exceptions, has the same management positions and internal reporting hierarchy.*fn11 Wal-Mart fosters a uniform corporate culture by the frequent transfer of managers from one transportation office to another as well as by training managers in transportation offices other than those to which they will ultimately be assigned.*fn12

Wal-Mart's field transportation operations are divided into ten regions.*fn13 Each region has an identical management organization, including a regional transportation manager and a regional people manager.*fn14 All regional managers are centrally based at Wal-Mart's headquarters in Bentonville.*fn15 The regional managers travel to the transportation offices in their region from Tuesday through Thursday and are back in Bentonville on Monday and Friday.*fn16

The managers in the transportation offices report directly to the regional managers.*fn17

All hiring and personnel policies for the transportation offices are developed at and disseminated from Wal-Mart's central headquarters in Bentonville. The corporate-level Human Resources Department develops the human resource policies that apply throughout Wal-Mart.*fn18

The corporate-level Diversity Office develops, coordinates, and monitors all of Wal-Mart's diversity initiatives.*fn19 Ed Parrish, the director of people for Wal-Mart's Transportation Division, develops all the hiring and personnel policies specific to the Transportation Division.*fn20 These policies are disseminated nationwide to the regions and individual transportation offices through an online database.*fn21 Neither regional managers nor managers at individual transportation offices have the authority to develop personnel or hiring policies that diverge from the corporate policies developed in Bentonville.*fn22

The primary elements of the hiring process for drivers at every transportation office are identical. First, new drivers are recruited almost exclusively through the "word of mouth" of current Wal-Mart drivers.*fn23 Wal-Mart implements the word-of-mouth recruitment by providing its current drivers with a "1-800 card" to pass out to prospective applicants.*fn24 The card lists the minimum driver qualifications and a 1-800 number drivers can call to request an application.*fn25

Both the minimum qualifications and the application are the same nationwide.*fn26 All 1-800 cards are designed and printed at the Bentonville headquarters.*fn27 Wal-Mart does little, if any, job advertising in addition to their drivers disseminating the 1-800 card.*fn28

All who call the 1-800 number, regardless of which transportation office they wish to apply, are initially processed and screened at Wal-Mart's Bentonville headquarters.*fn29 An application is then sent to the potential applicant.*fn30

The applicant is instructed to return the completed application to the Bentonville headquarters.*fn31 If the application is completed, the minimum requirements are met, and the applicant's preferred transportation office is currently hiring, the application is forwarded to the appropriate transportation office.*fn32 In some cases, an applicant may send the application directly to the transportation office, in which case the clerk at the transportation office conducts the initial screening process.*fn33

After the application is forwarded from the Bentonville headquarters, a screening committee, consisting of current drivers at the transportation office, decides which applicants will be granted an interview.*fn34 The same screening committee of current drivers also interviews those applicants who make the initial screening cut.*fn35 Those applicants who are recommended by the screening committee are then interviewed by a management committee, which must include the general transportation manager and the personnel manager.*fn36 The general transportation manager of the transportation office for which the applicant applied makes the final hiring decision.*fn37

No other position within the Transportation Division utilizes a hiring process involving word-of-mouth recruitment, a centralized 1-800 number, or employee screening committees.*fn38

Beyond the minimum qualifications, Wal-Mart has no written or objective criteria to guide the driver screening committees when analyzing applicants during the hiring process.*fn39

The hiring discretion of the general transportation managers is similarly unfettered by any objective criteria.*fn40 Wal-Mart does not track, evaluate, or analyze what subjective criteria its drivers and managers are utilizing during the recruitment and hiring process.*fn41 While Wal-Mart policy requires each driver screening committee to be 50% diverse,*fn42 a review of all of WalMart's regional personnel manager audits reveals that no screening committee has a majority of African Americans and that a substantial percentage of the screening committees do not have any African American representation whatsoever.*fn43 Plaintiffs have presented evidence of some of the subjective factors employed by the screening committees to determine which applicants make the interview cut,*fn44 as well as anecdotal evidence of overt racism among screening committee members.*fn45

From January 1, 2000, to September 19, 2005, Wal-Mart hired 4,135 over-the-road truck drivers.*fn46 Wal-Mart's workforce of over-the-road truck drivers during that time ranged from approximately 4% to 6% African American and the new hires during that period approximately 7.4% African American.*fn47 During the same time period, a study by the American Trucking Association determined that approximately 15% of the nationwide truck-driver workforce was African American.*fn48 Utilizing census data and EEOC data, Plaintiffs' expert Dr. Martin Shapiro determined that from January 1, 2000, to September 19, 2005, the proportion of newly hired African American drivers was less than the expected proportion of newly hired African American drivers in 34 of the 39 transportation offices.*fn49

In 1999, Kevin Upham, the driver recruitment coordinator, undertook a detailed evaluation of Wal-Mart's current recruiting practices.*fn50 Upham concluded that the exclusive reliance on word-of-mouth hiring practices was greatly limiting publicity of job openings for over-the-road truck drivers.*fn51 He recommended to management that steps be taken to publicize job openings to the general trucking community.*fn52 Wal-Mart did not adopt Upham's proposals,*fn53 and eliminated the driver recruitment position.*fn54

Wal-Mart revived the recruitment position in 2004 and placed Frank Paris in that position.*fn55 Paris investigated Wal-Mart's recruitment practices and, in an August 2004 memo and Powerpoint presentation, reached almost the same conclusions as Upham about the impact of Wal-Mart's reliance on word-of-mouth recruiting.*fn56 Wal-Mart made no changes to its hiring policies in response to Paris's investigation.

Wal-Mart has the ability to generate and retain complex demographic data and other statistical information.*fn57 Yet Wal-Mart rejected two proposals to track the racial demographics of its applicant pool for over-the-road truck drivers.*fn58

In fact, Wal-Mart has never analyzed the causal connection between its reliance on word-of-mouth recruiting and the number of African Americans in its workforce of over-the-road truck drivers, despite the acknowledgment by Ed Parrish -- Wal-Mart's top human resources officer in the Transportation Division and chosen corporate representative in this suit -- that word-of-mouth recruiting leads to a perpetuation of the current demographics in the workforce.*fn59


Plaintiffs seek to certify a class consisting of:

a. African American persons who reside in the continental United States of America who have applied for employment as over-the-road truck drivers at Wal-Mart since September 22, 2001, and who have not been hired; and

b. African American persons who reside in the continental United States of America who were deterred or thwarted from applying for positions as over-the-road truck drivers at Wal-Mart due to Wal-Mart's challenged policies and practices.*fn60

To obtain class certification, Plaintiffs must meet all four requirements of Federal Rule of Civil Procedure 23(a) and the requirements of at least one of the subdivisions of Rule 23(b). A case is "not maintainable as a class action by virtue of its designation as such in the pleadings."*fn61

Instead, "[t]here must be an adequate statement of the basic facts to indicate that each requirement of the rule is fulfilled."*fn62 The party seeking class certification has the burden of establishing that certification is appropriate.*fn63

The decision whether to certify a class action is left to the sound discretion of the district court.*fn64 In determining whether to certify a class action, "the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."*fn65 "Accordingly, while the Court must conduct a 'rigorous analysis,' class certification is a procedural determination and should not include an inquiry into the merits."*fn66 The Court's duty to assure compliance with Rule 23 continues even after the certification.*fn67

A. Implicit Requirement for Class Certification

While not explicitly listed in Rule 23(a), some courts have required that a precisely defined class exist before considering the Rule 23(a) criteria for class certification.*fn68 Wal-Mart argues that including all African Americans who were deterred or thwarted from applying to the ...

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