WASHINGTON (MarketWatch) — A massive sex-discrimination class-action lawsuit cannot move forward against Wal-Mart Stores Inc., the Supreme Court said in a Monday decision that legal observers expect to have wide-ranging ramifications.

In its decision for Wal-Mart Stores Inc. v. Betty Dukes et al., the court found that within the class — which could have included more than 1 million women workers — there was an absence of “glue holding together the alleged reasons” for millions of employment decisions. Also, the court said there wasn’t “significant proof” that the company “operated under a general policy of discrimination.”

“Wal-Mart’s announced policy forbids sex discrimination, and the company has penalties for denials of equal opportunity,” according to the court’s decision.

“Respondents’ only evidence of a general discrimination policy was a sociologist’s analysis asserting that Wal-Mart’s corporate culture made it vulnerable to gender bias. But because he could not estimate what percent of Wal-Mart employment decisions might be determined by stereotypical thinking, his testimony was worlds away from ‘significant proof’ that Wal-Mart ‘operated under a general policy of discrimination.’”

Monday’s decision is a major win for Wal-Mart WMT, +2.02% , the Bentonville, Ark.-based discounter that could have faced a payout of more than $1 billion if the large class suit went forward. Wal-Mart’s shares, part of the Dow Jones Industrial Average, rose fractionally in midday action.

“Walmart has a long history of providing advancement opportunities for our female associates and will continue its efforts to build a robust pipeline of future female leaders,” according to a company statement. “By reversing the Ninth Circuit Court of Appeals decision, the majority effectively ends this class-action lawsuit.”

Joe Sellers, attorney for the plaintiffs in the Wal-Mart case, wrote in an email to MarketWatch that there are thousands of claims of individual women, and “we are still exploring whether some reconfiguration of the class claims is possible.” Plans will be discussed in the summer or early fall, he wrote.

“We may try to formulate one or more smaller classes consistent with the ruling, where we have substantial evidence of a policy of discrimination,” Sellers wrote.

Parameters set

The Supreme Court’s decision, which was unanimous in some parts with dissents on others, sets forth parameters for the way that class actions can be structured and litigated, said Gerald Maatman Jr., an attorney at Seyfarth Shaw, which represents management in employment cases.

“The decision tightens up the parameters for certification and provides guidelines on the types of theories that can be certified,” Maatman said.

“In essence, unless a representative class can get on the stand and tell their story, and it’s the same story for everyone, class certification is not allowed. This implies that the size of a class must be limited to track a general policy of discrimination, as the ‘glue’ holding the case together is much smaller than as theorized by plaintiffs in the Dukes case.”

Plaintiffs claim that Wal-Mart managers favored men when it came to pay and promotions. In 2001, six current and former employees filed a class action lawsuit. In 2004, a national class was certified that included all women who worked at Wal-Mart retail stores since Dec. 26, 1998, leading to the largest class-action suit in U.S. history.