Wal-Mart decision signals end of cult of litigation?


The Supreme Court’s recent ruling that Wal-Mart should be free and clear of a discrimination lawsuit filed by women is a clear indication that companies have less to fear going forward from the threat of lawsuit or other legal action.

Lawsuits in corporate America are a contentious issue in our culture. You can tell that by the razor-thin margin of the 5-4 vote in the Wal-Mart case.

Big companies have long had a cultural fear that any move they make will lead to liability. Now, I’m not saying there aren’t wrongs that occur in corporate America. Sometimes people should be allowed to “go after” a company, for lack of a better word.

But we have had a tentativeness from fear in business, and I believe our country has reaped less rewards as a result. Simply put, we have been too litigious as a country.

There’s a real problem in America with the bad late night TV ads you see for lawyers. Or if you live in a metro area, you probably see the city buses and billboards advertising personal injury lawyers. We think the law is a big lottery ticket and that’s wrong.

I may disagree with the outcome and tone of some Supreme Court decisions (some of them are downright anti-consumer to me), but the fact remains that the 5 vote majority is saying, “OK, enough, people.” We’re being put in timeout. Enough with all the litigation. There’s real value for that in capitalism.

If a business repeatedly does a lousy job, the marketplace takes over and drives out that company (unless they’re a monopoly.)

Look at the example of Sears. Now here’s a company that hadn’t done anything wrong, but they have been run poorly. For decades, Sears was the largest retailer in the world, but they’ve been through a lot of mismanagement. As a result, they have suffered declining sales, less market share and demoralized employees. It’s the marketplace at work.

Capitalism forces you to be efficient or else. We’ve gotten away from survival of the fittest in capitalism, but again, there’s real value in that too.

Whether you feel Wal-Mart is a good or bad company, ultimately the marketplace should and will deal with it. Not the courts.


  • Show Comments Hide Comments