CHICAGO—Citing the U.S. Supreme Court’s Wal-Mart vs. Dukes ruling, a federal appellate court denied class action status to plaintiffs in a case filed against a construction company charged in discriminating against black employees.

According to Wednesday's ruling in Wallace Bolden et al. vs. Walsh Construction Co. by the 7th U.S. Circuit Court of Appeals in Chicago, 12 plaintiffs had filed a race discrimination lawsuit seeking class action status against Portland Ore.-based Walsh Construction Co., which is one of the nation's largest builders.

The plaintiffs in the case, none of whom has worked for the firm since 2002, claimed Walsh's superintendents practiced racial discrimination in assigning overtime work and in working conditions.

“Plaintiffs submitted a statistical analysis to the effect that white and Hispanic workers were more likely to work overtime hours than black workers did,” said the ruling. They said also some superintendents and foremen used demeaning words to refer to black workers, or failed to prevent journeymen from doing so.

In response to the plaintiffs' request for class certification that covered all of Walsh's 262 projects in the Chicago area since mid-2001, a district court judge certified two classes—a “hostile work environment class” and an overtime class.

“Different sites had materially different working conditions, as most of the plaintiffs conceded in their depositions,” said the ruling. “They acknowledged that most superintendents they had worked with did not discriminate; their objections concerned a handful of superintendents and foremen,” the ruling said.

The ruling referred to the Supreme Court's < a href="/article/20110626/ISSUE01/306269964" target="_blank">Wal-Mart ruling, in which the court held that to be granted class action certification, plaintiffs must demonstrate commonality.

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The court in Wal-Mart explained that a multistore or multisite class could meet the qualification for a class action “if the employer used a procedure or policy that spanned all sites,” said the appellate ruling.

“In Wal-Mart, as here, the plaintiffs conceded that the employer has a policy forbidding discrimination but contended that reposing discretion in local managers permitted that policy to be undermined.”

The Wal-Mart decision states, however, that “allowing discretion by local supervisors over employment matters...is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices,” said the appellate court, in overturning the two class actions.

“It's a pretty remarkable decision,” said Gerald L. Maatman Jr., a partner with Seyfarth Shaw L.L.P. in Chicago. It clarifies the holding in Dukes for employers “and takes it one step further and in essence demonstrates a willingness to place Dukes outside the four corners of its factual situation, which was a megacase involving millions of people.”

The Walsh case involved many fewer people, but in concluding commonality is involved, “the 7th Circuit decision takes Dukes to the next level,” Mr. Maatman said.

“I think you're going to see the case cited far and wide by employers in their defense of class actions,” he said.