LEL Flash | Issue: March 2016

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Issue: March 2016

Feature

The Supreme Court Swings the Pendulum Back (A Bit) Towards Class Action Plaintiffs

Robert A. Boonin of Dykema's Detroit office and Immediate Past-Chair of the Wage & Hour Defense Institute

photo of Robert Boonin

On March 22, 2016, the Supreme Court decided by a 6-2 majority that it is possible for plaintiffs to prove damages in an FLSA donning and doffing collective and class action through statistical evidence.

The case, Tyson Foods, Inc. v. Bouaphakeo, involved claims under the FLSA and Iowa law for unpaid overtime arising by Tyson failure to pay its pork processing plant employees for the time spent donning and doffing protective gear before and after shifts and meal periods. At trial, to establish the amount of time spent on these activities by the employees in the class, plaintiff presented an expert who, through 744 video recordings, concluded that the average time employees spent donning and doffing was 18 minutes per day for the cut and trim department, and 21.25 minutes per day by those in the kill department. Another plaintiff's expert then applied these amounts to each employee to determine the weeks employees worked over 40 hours, and if so, how much overtime pay was due. That expert determined that, by applying the averages, all but 212 of the 3,344 employees in the Rule 23 class worked over 40 hours per week and that they were due $6.7 million in unpaid wages. The FLSA Section 16(b) class covered 444 employees.

Although Tyson did not have any records regarding how much time each employee donned and doffed gear, and Tyson did not challenge the experts' methods or produce its own experts, Tyson contended that under the Court's holding in Wal-Mart Stores, Inc. v. Dukes, awarding damages based on averages determined by representative testimony was improper since actual individual injuries varied and some employees could receive compensation who were not even injured. In other words, Tyson argued that the determination of each individual's damages predominated over the common questions in the case, and for that reason, class treatment was inappropriate.

The district court disagreed and allowed the jury to determine whether time spent donning and doffing specific protective equipment was compensable, whether donning and doffing was compensable for meal breaks, and the total amount of time spent on work that should have been compensated. The jury concluded that donning and doffing time was compensable as to the start and end of shifts, but not for meal breaks, and returned a verdict of $2.9 million in unpaid wages. Tyson appealed and the Eighth Circuit affirmed.

Given the Court's ruling in Wal-Mart and that which soon followed in Comcast Corp. v. Behrend (an antitrust case in which the Court held that a class should not be certified if damages cannot be appropriately determined on a class-wide basis), it seemed plausible that the "trial by formula" proscriptions in those cases would be extended to this case. The Court, though, chose a different direction. The Court held that the individual questions of damages in a case must be given "careful scrutiny" and rejected Tyson's argument that representative testimony be categorically barred when determining damages in class actions. The Court held: "Whether and when statistical evidence can be used to establish classwide liability will depend on the purpose for which the evidence is being introduced and on ‘the elements of the underlying cause of action.'" One way a trial court could determine if a statistical sample is permissible, the Court continued, "is by showing that each class member could have relied on that sample to establish liability if he or she had brought an individual action." Applying this standard to the narrow facts of this case, the Court concluded that the use of comparisons to average employees was appropriate since "[i]f the employees had proceeded with 3,344 individual lawsuits, each employee likely would have had to introduce [the expert's] study to prove the hours he or she worked."

The Court also explained its Wal-Mart holding, a class action involving claims of sex discrimination, and why their holding in Tyson was consistent with Wal-Mart. The underlying question in Wal-Mart was "whether the sample at issue could have been used to establish liability in an individual action." Since the employees in Wal-Mart were not similarly situated as to the type of discrimination they allegedly endured, the representative testimony could not shed light on the discrimination question. In contrast, the employees in Tyson were similarly situated as their donning and doffing activities were similar, and the study "could have been sufficient to sustain a jury finding as to hours worked if it were introduced in each employee's individual action."

The second issue before the Court dealt with the fact there was no indication as to why the jury's award so greatly deviated from the amount the plaintiff's expert calculated. For instance, it is not clear the extent to which the jury rejected or accepted the averages provided. Thus, there is no way to determine how many class members suffered no injury. Since it is therefore possible that some employees could be compensated for damages they did not incur, Tyson argued that the verdict should be set aside. On this point, though, Court held that until the trial court determines how the verdict amount is to be distributed, the question was not ripe for the Court to review. In his concurring opinion, Chief Justice Roberts expressed doubts that this defect could be overcome by the trial court.

While the defense bar hoped for--or even expected--a different outcome, in the FLSA context the case may be of limited significance in that it does not provide for the carte blanche use of representative testimony. To the contrary, the use of representative testimony may still be suspect in other FLSA contexts. In Tyson, the Court's holding was premised on its view that the representative testimony could have been admissible to prove damages if the donning and doffing claim were brought on behalf of a single plaintiff. In donning and doffing cases, comparisons to other employees performing the same tasks may help to determine the amount of time the individual spent on those same tasks. In off-the-clock and misclassification cases, the differences in how much time is spent off-the-clock or in what the employees actually do during the workday may vary too much for representative testimony to be admissible. In those cases, the employees may not be similarly situated and the facts may more closely align with those in Wal-Mart than in Tyson.

In sum, the pendulum just swung back towards the favor of the plaintiff's bar, but how far depends on how this case is applied in other contexts.

Contents

Opening Page

Comments from the Chair
On the Midwinter Road, Part II

Special Feature
New York City Employers Should Think Twice Before Reviewing a Current or Potential Employee's Credit History

Feature
The Supreme Court Swings the Pendulum Back (A Bit) Towards Class Action Plaintiffs

Other Feature
Standing Committee on Ethics Considering Rule Change to Ban Discrimination and Harassment in the Practice of Law

Member Spotlight
Margo Hasselman

Flash Co-Chairs:
Elaine Koch, Bryan Cave LLP | John Ho, Bond, Schoeneck and King, Employer Co-Chair | Lisa Gomez, Cohen Weiss and Simon, Union & Employee
Jennifer L. Liu, Liu Law PC, Employee | John Henderson, U.S. EEO Commission

American Bar Association Section of Labor and Employment Law
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