eLABORate: U.S. Supreme Court Upholds Class Certification of Wage Claims in Case Relying on Representative Evidence

March 24, 2016

On March 22, 2016, the U.S. Supreme Court upheld a decision granting class and collective action treatment in a case against Tyson Foods. The decision will be important on how to evaluate the use of representative evidence, such as statistical sampling and averaging, to establish classwide liability.

In Tyson Foods, Inc. v. Bouaphakeo, et al, employees at a Tyson Foods pork processing plant alleged that Tyson’s failure to pay them for time spent putting on and taking off protective gear, or “donning and doffing,” denied them overtime compensation. The plaintiffs sought certification of their claims as a class action under Federal Rule of Civil Procedure 23 and as a collective action under the Fair Labor Standards Act (FLSA). The class action contained more than 3,000 members, and nearly 450 individuals joined the collective action.

To recover in the case, each plaintiff had to show he or she worked more than 40 hours a week, inclusive of time spent donning and doffing. Because Tyson failed to record donning and doffing time, however, the plaintiffs sought to support their claims with representative evidence, which included an expert study that analyzed donning and doffing time from more than 700 videotaped observations and estimated average amounts of time to be applied to the hours worked by individual plaintiffs. Without directly challenging the validity or reliability of the expert study, Tyson argued that the varying amounts of time it took individual employees to don and doff different protective gear, which itself varied depending on the employees’ respective duties at the plant, made the claims too speculative for classwide recovery.

The district court rejected Tyson’s argument. A jury later found that plaintiffs’ donning and doffing time at the beginning and end of the workday was compensable and awarded $2.9 million in unpaid wages, later doubled to $5.8 million upon the assessment of liquidated damages. The Eighth Circuit later affirmed the judgment, and Tyson appealed to the Supreme Court.

On appeal, Tyson maintained that class certification was improper. Tyson argued that plaintiff-specific inquiries into hours worked and the amount of donning and doffing time that would be necessary to determine whether plaintiffs worked unpaid overtime would predominate over any common questions raised by the class. In a 6-2 opinion, the Supreme Court disagreed with Tyson and affirmed the judgment.

The Court cited its 1946 decision in Anderson v. Mt. Clemens for the proposition that where an employer fails to maintain proper records and an employee has no way to establish the time spent performing uncompensated work, the employee may meet his or her burden by producing sufficient evidence to show the amount and extent of the work “as a just and reasonable inference.” The Court found that the plaintiffs’ representative evidence — the expert study that estimated average amounts of donning and doffing time to be applied to all plaintiffs — was a permissible means of meeting the plaintiffs’ burden. The Court reasoned that, “if the sample could have sustained a reasonable jury finding as to hours worked in each employee’s individual action,” then it could establish hours worked on a classwide basis, as well.

Notably, the Court also distinguished its decision from that in Wal-Mart Stores, Inc., v. Dukes, a case that went before the Supreme Court in 2011. In Dukes, the Court rejected the plaintiffs’ “trial by formula” approach, in which liability and damages as to a sample set of class members’ sex discrimination claims would be extrapolated out to determine liability and damages to the class as a whole. The Court explained that the representative evidence in Dukes could not have sustained individual actions, because the plaintiffs in that case were not similarly situated, whereas the plaintiffs in Tyson “worked in the same facility, did similar work, and [were] paid under the same policy.” Under those circumstances, the Court reasoned, “the experiences of a subset of employees can be probative as to the experiences of all of them.”

The Court cautioned, however, that not all inferences drawn from representative evidence will be just and reasonable. For instance, representative evidence may be statistically inadequate or based on implausible assumptions. Rather, the fairness and utility of statistical methods “will depend on facts and circumstances” particular to the case. The Court also declined to address one issue it acknowledged to be “of great importance”— namely, whether plaintiffs who are found to not have worked more than 40 hours even after adding the average donning and doffing time from the expert study may still recover damages.

The Court found this issue was premature, because it remains to be seen whether the district court can successfully weed out uninjured class members when disbursing the damages award. The Court similarly declined to address whether a class containing uninjured plaintiffs can be certified in the first place, deeming the issue to have been abandoned by Tyson. Justice Roberts, who joined the opinion, wrote a separate concurrence explaining why he thought the district court “may not be able to fashion a method for awarding damages only to those class members who suffered an actual injury.” Thus, the practical impact of the decision when trying to apportion any award remains to be seen.

Given the continued high rate of filing of collective and class wage and hour lawsuits, and the potential implications of the Court’s ruling in Tyson, employers should carefully review their current pay practices and treatment of activities that, like donning and doffing, may be compensable under the FLSA or state wage and hour law.