Pork Processing Plant Employees Can Keep the Bacon: Supreme Court Affirms Jury Award and Permits Proof of Wage and Hour Class Claims By Representative Evidence

While the Supreme Court in Tyson Foods, Inc. v. Bouaphakeo dashed employers’ hopes that the Court would broadly preclude statistical evidence and severely limit wage and hour class actions in a fashion similar to its restriction of discrimination class actions in Wal-mart v. Dukes, the Court was also clear that this type of evidence will not be appropriate or probative in all wage and hour claims.  In ruling for the class action claimants, the Court affirmed a $2.9 million jury award for overtime claims related to donning and doffing at an Iowa pork processing plant.  In so ruling, the Supreme Court refused to adopt the position advanced by Tyson Foods and several of its amici that class actions cannot be resolved by reliance upon representative evidence or statistical samples.  It also refused to embrace Tyson Food’s reading of Wal-mart v. Dukes as standing for the proposition that representative sample is an impermissible means of establishing class-wide liability.  But the Court also made clear whether statistical evidence could be used for liability depends on the claims asserted and the particular evidence.  While the decision is not unsurprising after oral arguments, it seems likely that employers will see an uptick in plaintiffs aggressively relying on “representative” statistical evidence in wage and hour collective and class cases.  There are, however, several “lessons learned” based upon the majority’s decision.

The underlying issue in the case was whether Tyson Foods improperly denied overtime compensation to its employees at Tyson’s Storm Lake processing facility for the time that they spent putting on and taking off the required protective gear.  The District Court conditionally certified the class and collective action even though it acknowledged that each individual might have spent a different amount of time dressing prior to the shift, which, in turn, would mean that not all of the employees worked more than 40 hours in a week.  The parties and the courts are in agreement that Tyson Foods only faced potential liability for uncompensated hours beyond 40 hours in a week.  At trial, the employees offered evidence of two experts in support of their claims; neither of whom were subject to a Daubert challenge by Tyson.  First, they offered evidence from an industrial relations expert who conducted videotaped observations and estimated the number of minutes per day that employees spent dressing in their required protective gear.  Second, they offered another expert who took that estimated average donning and doffing time and calculated that the employees were due $6.7 million in uncompensated time.  Based on this evidence, the employees were able to establish liability under state and federal wage and hour laws.  However, the jury awarded a reduced damages verdict of $2.9 million. The Eighth Circuit affirmed the decision and Tyson Foods appealed the verdict to the Supreme Court.

Writing for the majority, Justice Kennedy determined that the representative testimony sufficed to meet the class certification requirements under Federal Rule of Civil Procedure 23 and the requirements of the Fair Labor Standards Act and the Iowa state wage and hour law.  According to the Court, the touchstone of the certification inquiry was whether the representative testimony met the predominance test which asks whether the common issues in the case are “more prevalent or important than the non-common. . .individual issues.”  Answering in the affirmative, the majority opinion determined that the evidence was sufficiently representative because, had the plaintiffs filed individual claims, they would have been able to meet their liability burden to prove that Tyson Foods failed to compensate them for donning and doffing time by relying on the expert’s study in almost every individual case.  Relying in part on Anderson v. Mt. Clemens, the Court found that representative testimony can be most helpful where the employer failed to keep records and, as such, representative evidence may be the only way employees can meet their prima facie burden.  Turning to the Tyson Foods and the amici’s claims that the Court apply the decision in Wal-Mart v. Dukes and find that the employees’ actions were too dissimilar to merge, the Court distinguished the Tyson Food’s facts.  According to the majority, unlike the Tyson Foods employees who could point to a common practice leading to undercompensating them for donning and doffing, the employees in Wal-mart v. Dukes could not point to a common policy leading to the conclusion that company-wide discrimination existed.

The second question presented before the court was whether the jury verdict could survive when it was not clear which employees worked more than 40 hours and which were uninjured by Tyson Foods’ compensation practice.  The majority deemed the issue premature and instructed the District Court to address this issue on remand.  In the concurring opinion, Justice Roberts agreed that the issue was not ripe for consideration but added his concern that the District Court’s would find it difficult to interpret the jury’s reduction of the estimate from $6.7 million to $2.9 million in such a way that would separate the uninjured employees from those that are entitled to share in the award.  According to the Chief Justice, Article III of the Constitution does not give the courts the power to order relief to any uninjured plaintiff and failing to separate out the injured from the uninjured employees within the class would be fatal to the jury award.

Several important themes come out of the majority decision.

  • Statistical evidence is not always going to be appropriate.  The Supreme Court refused to adopt Tyson Food’s argument that representative evidence in class actions is always improper.  Faced with Tyson Foods’ failure to maintain the required records and unrebutted representative evidence from the employees’ expert, the Court approved the use of statistical evidence.  The Court cautioned that the evidence must be reliable in proving or disproving the elements of the relevant cause of action, and left the door open as to whether less reliable evidence would suffice to meet the classwide representative requirements.  Accordingly, employers are not foreclosed from arguing that the evidence in the particular case before them does meet the requirements and should consider making use of Daubert challenges and rebuttal experts.
  • Wal-mart v. Dukes remains intact.  The Court’s decision in Tyson Foods reiterates that the statistical evidence offered in Wal-mart was not probative as to whether any individual was discriminated against by their particular store manager because the employees were not similarly situated.  By contrast, in Tyson Foods, the Court concluded the experiences of other employees would be probative of an individual’s claim because they each worked in the same facility, did similar work and were paid under the same policy that deemed certain donning and doffing to be noncompensable.
  • The Supreme Court’s 1946 decision in Anderson v. Mt. Clemens remains intact.  Despite claims of its demise, stare decisis exists as the Court relied heavily on its seminal decision in Anderson v. Mt. Clemens. In Clemens, the Supreme Court allowed testimony from 7 employees and their union to serve as representative testimony for 400 similarly situated employees where the employer did not keep records of the work time.  Holding that the failure to keep records should not penalize the employees, the Court determined that the remedial nature of the FLSA required a presumption in the employees’ favor.  Drawing on that precedent, the Tyson Foods Court held that it was reasonable to use a representative sample to fill the evidence gap crated by Tyson Food’s failure to keep adequate records of the time the employees spent donning and doffing.  The Mt. Clemens presumption remains applicable in FLSA actions as, attempts to extend Mt. Clemens beyond the wage and hour context have been largely unsuccessful.

Additionally, the Supreme Court specifically left open the question of whether the District Court could devise a reasonable method for determining how to distribute the $2.9 million award to ensure that only those individuals who actually would have worked over 40 hours per week if they were compensated for donning and doffing would partake in the recovery.  As the concurring opinion aptly points out, this is no small task.