The Supreme Court’s recent decision in Tyson Foods v. Bouahapeko affirms the use, in some circumstances, of “representative” statistical evidence that produced average times for donning and doffing personal protective gear, to certify a class or collective action under state law and the FLSA. However, the Court’s holding was narrow, and broke little new ground. Here’s the full story.
What the case was about
The plaintiffs were hourly employees at a pork processing plant in Iowa. Some worked on the slaughter floor, and others worked on the processing floor. They each held one of the more than 420 production jobs, which all required the job-holder to wear sanitary items and personal protective equipment. The amount and type of equipment varied depending on the particular job. All employees wore hard hats, hairnets, and ear protection while on the production floor, but persons in the knife-wielding areas donned and doffed plastic belly guards, mesh sleeves, plexiglass arm guards, polar gloves, and sleeves and scabbards for their knives. Until the U.S. Department of Labor filed a lawsuit against Tyson in the late 1990s, the time employees spent donning and doffing these items was unpaid.
In 1998, Tyson began to pay all its employees for an additional four minutes a day, the time that Tyson estimated they needed to don and doff their gear. In 2007, Tyson stopped paying the four minutes uniformly to all employees. Instead, it compensated some employees (those using knives) for 4-8 minutes of donning and doffing time, but paid nothing to others. At no time did Tyson record the actual time spent by each employee on donning and doffing, or related activities.
“At no time did Tyson record the actual time spent by each employee on donning and doffing, or related activities. |
The plaintiffs sued in federal court in Iowa, seeking overtime under the Fair Labor Standards Act and the Iowa Wage Payment Collection Law. Tyson objected to the plaintiffs’ motion for certification under 29 U.S.C. Section 216(b) (governing collective actions under the FLSA) and Rule 23(b)(3) of the Federal Rules of Civil Procedure (governing the state-law claims), arguing that, because of the differences in required protective gear, employees’ claims for overtime were not similar enough for class treatment. The district court disagreed and certified the class, finding that when looking at the group of plaintiffs who were not paid anything for donning and doffing activities there were far more similarities than dissimilarities.
Tyson tried to defeat the class again after the U.S. Supreme Court took a restrictive view of class certifications in its 2011 decision in Wal-Mart Stores, Inc. v. Dukes, this time by moving to decertify the Rule 23 class. Quoting from Wal-Mart, Tyson argued that decertification was necessary because the plaintiffs had failed to show that questions of liability or damages were “capable of class-wide resolution...in one stroke.” The district court denied Tyson’s motion, finding that whether “donning and doffing and/or sanitizing constitutes ‘work’” was a common question susceptible to common proof.
At trial, a jury had to decide (1) whether the donning and doffing time was compensable, and (2) if so, the total amount of time spent in that activity. As already noted, Tyson was not tracking the donning and doffing time, so it had no time records to introduce into evidence. Class members testified that they donned and doffed their equipment in different order and in different places, and that each piece required a distinct amount of time. The plaintiffs retained an expert witness, an industrial relations expert who conducted videotaped observations and analyzed how long the various donning and doffing activities took. He then averaged the time taken in the observations to produce an estimate of 18 minutes a day for the “processing” department and 21.25 minutes for the “slaughter” department.
“The jury awarded less than half of the unpaid wages calculated by the plaintiffs’ expert, but the award was still $2.9 million. |
Tyson did not request a hearing on the statistical validity of the expert’s study under Daubert v. Merrell Dow Pharmaceuticals, nor did it retain its own expert to discredit the plaintiffs’ evidence. Instead, Tyson argued to the jury that the varying amounts of time required for employees to don and doff different protective equipment made the lawsuit too speculative for classwide recovery. Tyson also argued that the plaintiffs' expert overstated the average donning and doffing time.
According to the calculations of the plaintiffs’ experts, Tyson owed its employees approximately $6.7 million in unpaid wages. The jury awarded approximately $2.9 million.
Tyson moved to set aside the verdict, maintaining that the classes should not have been certified under state or federal law. The court denied Tyson’s motion, and the U.S. Court of Appeals for the Eighth Circuit affirmed. Tyson then asked for, and obtained, review by the U.S. Supreme Court of two issues. According to Tyson,
(1) The class should not have been certified because the primary method of proving injury assumed that each employee spent the same time donning and doffing protective gear, even though differences in the composition of that gear may have meant that, in fact, employees took different amounts of time to don and doff; and
(2) Certification was improper because the damages awarded to the class could be distributed to individuals who did not work any uncompensated overtime.
The Supreme Court last week affirmed 6-2, in an opinion written by Justice Anthony Kennedy and joined by Chief Justice John Roberts (who also wrote a separate concurrence), and Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor. Justices Clarence Thomas and Samuel Alito dissented.
The Supreme Court decision
Use of “average times” to prove liability. The parties agreed that the most significant question common to the class was whether donning and doffing protective gear was compensable under the FLSA. To be entitled to recovery, however, each employee had to prove that at least some donning and doffing time, when added to his or her regular hours, amounted to more than 40 hours in a given week. Tyson argued that these person-specific inquiries into individual work time predominated over the common questions raised by Plaintiffs, making class certification improper. The plaintiffs, on the other hand, countered that individual inquiries were unnecessary because one could assume that each employee spent the same average time donning and doffing, based on the study conducted by the plaintiffs’ expert.
“A representative sample can be used to fill an evidentiary gap created by the employer’s failure to keep adequate time records. |
The Court, in agreeing with the plaintiffs, relied on a 1940s decision, Anderson v. Mt. Clemens Pottery. In that case, the employer did not keep records of the time worked by employees at the beginning and end of the work day. The Supreme Court held that the employees could recover if they could prove that they in fact “performed work for which they were improperly compensated and...produce sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.” Applying that principle to the Tyson Foods case, the majority found that the expert’s average times could be used to establish individual hours worked because it was a representative sample to fill an evidentiary gap created by Tyson’s failure to keep adequate time records. “Since there were no alternative means for the employees to establish their hours worked, Tyson’s primary defense was to show that [the expert’s study] was unrepresentative or inaccurate.”
The expert’s “representative evidence” could establish classwide liability if each class member could have relied on that sample to establish liability in an individual action, the Court ruled.
The Court further found that the Wal-Mart v. Dukes decision didn’t mandate a ruling that favored Tyson. Wal-Mart was a sex discrimination case under Title VII, and the plaintiffs tried to establish liability on a classwide basis by use of a “sampling” of evidence of store managers who had allegedly discriminated against particular employees. If the cases had been brought on an individual basis, an individual plaintiff would not have been able to use evidence of a manager’s discrimination against another employee to prove that a Wal-Mart manager had discriminated against her. By contrast, the employees at Tyson’s plant did similar work, were paid under the same policy, and could have introduced the expert’s study in a series of individual suits.
The Tyson Court said that it was not adopting broad and categorical rules governing the use of representative and statistical evidence in class actions. “Rather the ability to use a representative sample to establish classwide liability will depend on the purpose for which the sample is being introduced and on the underlying cause of action.” In an FLSA action, the Supreme Court in Mt. Clemens Pottery held that it is acceptable to infer the hours that an employee has worked from an expert’s study like the one in this case as long as the study is otherwise admissible. However, the Tyson Court said, “the fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.”
Uninjured Class Members. As already noted, Tyson had argued in opposing class certification that a number of class members were owed no overtime at all because their hours for the week totaled 40 or less, even when the “average” donning and doffing time was added. The Court recognized the importance of dealing with these uninjured class members but said that the issue was not properly before the Court “because the damages award has not yet been disbursed, nor does the record show how it will be disbursed.” Tyson will be able to challenge the proposed method of allocation when the case returns to the district court in Iowa for disbursal of the award, the majority opinion said.
“If there is no way to ensure that the jury’s damages award goes only to injured class members, that award cannot stand. – Chief Justice John Roberts |
Although Chief Justice Roberts joined in the majority opinion, he filed a concurring opinion “to express my concern that the District Court may not be able to fashion a method for awarding damages only to those class members who suffered an actual injury.... [I]f there is no way to ensure that the jury’s damages award goes only to injured class members, that award cannot stand.” However, Roberts agreed with the majority that the district court should consider the issue first.
Justice Thomas wrote a dissenting opinion, which Justice Alito joined. Justice Thomas criticized the majority for “redefin[ing] class-action requirements and devis[ing] an unsound special evidentiary rule for FLSA cases.... [E]ven though the study showed wide variation among class members on an important individual issue, the district court still declined to consider whether [the expert’s analysis] was appropriate common proof.” He said that these errors prejudiced Tyson and warranted reversal.
Analysis
The court’s holding in Tyson is narrow, and broke little new ground. The Court declined to adopt general principles for the use of representative evidence to establish class-wide facts that are required for class certification. Rather, the Court endorsed a case-specific approach, noting that because Tyson had not kept records of the time that employees spent donning and doffing, those employees could rely on statistical evidence to prove the elements of their claims.
The Tyson scenario may, as a practical matter, be limited to donning and doffing cases. In misclassification cases, for example, the differences in duties and time spent may vary too much for representative testimony. The same may be true with off-clock-work cases.
Tyson’s failure to challenge the admissibility of the expert’s study allowed the Court to assume that it would be admissible as evidence of each individual’s time worked, even though the variability in the study’s conclusions left it vulnerable to a Daubert attack.
“Always keep accurate records of time spent in pre- and post-work activities, even if you believe the time is non-compensable or de minimis. |
Regarding the class members who were not owed overtime at all, the majority punted on the Article III “case or controversy” issue, failing to directly address when it is proper to certify a class that includes uninjured class members. However, Chief Justice Roberts made it clear that the jury award cannot stand if the district court is unable to eliminate those uninjured persons from the class receiving the damages.
Wal-Mart v. Dukes can indeed apply in the wage-hour arena. Many plaintiffs’ attorneys have taken the position that Wal-Mart applied only to class actions arising under Title VII based on the requirements of Title VII. Although the outcome of Wal-Mart was different, the majority opinion in Tyson makes it clear that the same principle applies to Title VII class actions and wage-hour class and collective actions: “The underlying question in Wal-Mart, as here, was whether the sample at issue could have been used to establish liability in an individual action.” So, if an employer can show that, based on the representative sample, no extrapolation can be made to any individual class member, then arguably that is a basis to reject its use to support a class action. The Tyson decision is likely to lead to hotly contested litigation as plaintiffs attempt to argue that their sampling studies satisfy the Tyson standard.
Finally, the Tyson decision contains an important lesson for employers: always keep accurate records of time spent in pre- and post-work activities. Even if you believe that the time spent in these activities is non-compensable or de minimis, you should keep track of the time in case there is a dispute at some point over unpaid wages. Without accurate time records, you can expect your employees to be using representative evidence to establish their claims, and although you can attack such evidence under Daubert, it is an expensive proposition.
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