Supreme Court Decision 'Huge David v. Goliath Victory'

The U.S. Supreme Court gave the green light on March 22 for the use of representative and statistical evidence in class actions, rejecting the argument that its seminal ruling in Wal-Mart Stores v. Dukes prohibited the use of representative evidence across the board.

“This was a huge David v. Goliath victory for over 3,000 low-income workers who took on the second largest meat packer on the planet, Tyson Foods,” said Carl Mayer, an attorney with Mayer Law Group in New York City. “Their claim was simple: The federal Fair Labor Standards Act [FLSA] requires workers to get all of their wages they are entitled to, including the time they spend putting on protective gear before slaughtering animals.” 

The company allegedly did not pay its employees all the overtime they were owed for donning and doffing protective gear before and after their work. A jury awarded the class of 3,344 employees at Tyson’s meat-processing facility in Storm Lake, Iowa, $2.9 million. The Supreme Court affirmed the award for the plaintiffs and the use of statistical evidence (Tyson Foods v. Bouaphakeo, No. 14-1146). But it sent the case back to the lower courts for a determination of whether the jury award can be divvied up in such a way that no uninjured party benefits from it.

“It is potentially a very important decision for employers because it lowers the standard for class certification and is seemingly inconsistent” with the high court’s prior decision in Wal-Mart, said Robert Cooper, an attorney with Buchalter Nemer in Los Angeles.

Representative Evidence

Tyson did not record the time each employee spent donning and doffing protective gear. So, the employees relied on representative evidence.

This evidence included employee testimony, video recordings of donning and doffing at the plant, and a study performed by an industrial relations expert, Dr. Kenneth Mericle. Mericle conducted 744 videotaped observations and analyzed how long 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 cut and retrim departments and 21.25 minutes a day for the kill department.

Using this data, the employees’ other expert, Dr. Liesl Fox, estimated the amount of uncompensated work time for each employee by adding Mericle’s estimated average donning and doffing time to the recorded time each employee worked and then subtracting any “K-code time,” an additional four minutes a day paid to all employees from 1998 to 2007 to account for donning and doffing in response to a Department of Labor lawsuit. Those employees who worked more than 40 hours after this calculation were due overtime, the plaintiffs alleged.

Tyson argued to the jury that the variance in time it took employees to don and doff differing protective equipment made the lawsuit too speculative for classwide recovery. It also argued that Mericle’s study overstated the average donning and doffing time.

Fox’s calculations called for an award of $6.7 million. The jury returned a verdict finding that time spent in donning and doffing protective gear at the beginning and end of the day was compensable work, but that time during meal breaks was not—which was its reason for halving the damage amount recommended by Fox.

“When employers violate their statutory duty to keep proper records, and employees thereby have no way to establish the time spent doing uncompensated work, the remedial nature of the FLSA and the great public policy which it embodies [dictate] against making the burden of proving uncompensated work an impossible hurdle for the employee,” the Supreme Court stated, affirming the lower court rulings for the employees.

Closely Watched Case

“The case took on additional import as it follows the Supreme Court’s recent ruling in a case involving Wal-Mart, where the court rejected the use of statistical evidence to provide a pattern of discrimination,” said Seth Rafkin, an attorney with Cooley in New York City and San Diego. 

The court upheld the use of statistical evidence in this case.  The court explained that it has long been established that there is no per se bar against use of statistical evidence, provided certain thresholds are met.

Rafkin said that the key threshold at issue in Tyson and Wal-Mart was whether the positions and work experiences of class members were sufficiently similar such that the statistical evidence based on a sample of class members could reasonably be relied on as representative of the experience of other class members. 

In Wal-Mart, the court found that the positions and experience of class members, who numbered 1.6 million workers, was so diverse that the statistical evidence could not be relied on as representative of the class’ experience. 

By contrast, the class in Tyson all worked at the same facility, performed similar work and were subject to the same policy. “Further, the nature of the factual issues arising in an FLSA claim violation are narrower in scope than those presented in a claim of widespread discrimination, and that fact also seems to have motivated the result in Tyson,” Rafkin said.

Patrick Bannon, an attorney with Seyfarth Shaw in Boston, expressed disappointment that the court did not define what is “similarly situated” in an FLSA collective action more completely. Also, he noted that lower courts often will conditionally grant certification at the outset of a case, then after the time and effort of discovery during the litigation, the court will decertify the class. The Supreme Court still hasn’t weighed in on whether that’s a sensible way to proceed, he noted.

Remaining Damages Issues

While the plaintiffs won on the question of whether statistical evidence may be used, the Supreme Court sent the case back to the district court for it to decide whether there is any way to ensure that the jury’s damages award goes only to injured class members.

Chief Justice John Roberts Jr. suggested in his concurrence to the decision that it will be impossible to tell who worked more than 40 hours and who didn’t, based on the jury’s reaction to the statistical evidence.

“The jury might have determined that Dr. Mericle’s average was correct for the kill department, but overstated for the fabrication departments. Or vice versa. Or the jury might have found that Dr. Mericle’s averages overstated the donning and doffing time in all departments, by varying degrees,” Roberts said.

As a result, Tyson “is likely to have a viable challenge to any attempt to allocate damages only to class members who were entitled to overtime based on plaintiffs’ statistical sampling methodology,” said Kevin McGinty, an attorney with Mintz Levin in Boston.

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.