Seventh Circuit Reverses Denial of Class Certification, Further Limiting Wal-Mart

Seventh Circuit Reverses Denial of Class Certification, Further Limiting Wal-Mart On August 7, 2015, the Seventh Circuit reversed a district court decision that had denied the certification of a class of African-American Chicago teachers. Under Illinois School Code, schools may be subject to a “turnaround” if they have been on probation for at least a year and have failed to make any improvements. Teachers and professionals at these schools are then put in a reassignment pool.

In 2011 the Chicago Board of Education used a process to select ten schools for a turnaround. These schools were exclusively on the south and west sides of Chicago and the total percentage of African-American tenured teachers was approximately 51% while the total tenured population of African-American teachers in the entire school Chicago public school system was only 25%.

Subsequently, the Chicago Teachers Union and three African-American tenured teachers who were part of the turnaround brought a class action lawsuit for racial discrimination against the Chicago Board of Education. The Northern District of Illinois denied class certification, but the Seventh Circuit reversed. In support of its reversal, the Seventh Circuit analyzed the three- step process the Board used to select schools for turnaround (first, identifying schools that had been on probation for a year and had not made adequate progress; second, analyzing standardized test scores and graduation rates; and third, using a qualitative “in-depth investigation process”).

The Seventh Circuit rejected the lower court’s reasoning that the third step in the turnaround process was qualitative and subjective, therefore lacking commonality under Wal-Mart. Instead, the Seventh Circuit held that the court should not skip to the third step of the decision-making process in light of the fact that the first two steps were clearly objective. Moreover, given that the Board was “of one mind, using one process,” the third step was distinguishable from Wal-Mart because rather than a myriad of low-level managers making decisions as in Wal-Mart, here the decisions for turnaround were being made by a few “concentrated top-level managers.”

The Seventh Circuit’s decision is positive news for employees and helps to revive class actions, which have faced significant certification hurdles in light of Wal-Mart. Read the whole decision here.

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