Class-action lawsuits are typically viewed as high-risk, high-reward endeavors. In its recent decision in Tyson Foods, Inc. v. Bouaphakeo, the Supreme Court pointed out both sides of this double-edged sword in the context of a unpaid overtime claim under the Fair Labor Standards Act (FLSA). 577 U.S. ___ (2016).
Federal Rule 23 permits parties to bring lawsuits as a class of people, rather than as individuals, if certain requirements are met. In disputes over unpaid wages, the FLSA permits group lawsuits through the mechanism of collective actions. FLSA collective actions require individuals to affirmatively “opt in” to the lawsuit, whereas class actions typically require individuals to “opt out” if they are not interested in participating. Predictably, class action claims ordinarily involve far more plaintiffs than FLSA collective actions.
In Tyson Foods, over 3,300 employees who worked in the cut, retrim, and kill departments at a Storm Lake, Iowa pork processing plant filed a class action lawsuit claiming that they were not paid overtime for the time spent “donning and doffing” (changing into and out of) their protective gear. Tyson argued, unsuccessfully, that certification of the class was inappropriate because different employees in different departments took different amounts of time donning and doffing.
Tyson admitted that it did not keep records or timesheets of employees’ donning and doffing time, as the FLSA requires. See 29 U.S.C. § 211(c). As a result, the employees attempted to fill this evidentiary gap through the use of “representative evidence” from an expert. Dr. Kenneth Mericle, an industrial relations expert, used videotaped observations of various employees donning and doffing a total of 744 different times and extrapolated the time needed for each department. Mericle concluded that cut and retrim department employees each spent an average of 18 minutes a day donning and doffing, while kill department employees spent an average of 21 ¼ minutes.
Tyson did not challenge the admissibility of Mericle’s evidence, but merely argued that it was too unreliable because of the variations between departments and employees. At the close of trial, the jury awarded the class a total of $2.9 million. While certainly a significant figure, the jury’s award was also far less than the $6.7 million that the employees’ experts had recommended.
In a 6-2 decision, the Court affirmed that the Mericle study could be used, but left the distribution of the jury award open to attack on remand. Writing for the Court, Justice Kennedy explained that the use of a “representative or statistical sample” may often be “the only practical means to collect and present relevant data” to establish liability, and that whether such evidence may be introduced in a given case turns on “the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.” In making this determination, the Court announced that, “[i]f the sample could have sustained a reasonable jury finding . . . in each [] individual action, that sample is a permissible means of establishing the [issue] in a class action.”
In an FLSA dispute where the employer has not maintained sufficient time records, the Court opined, a representative sample may be used to “‘show the amount and extent of [uncompensated] work as a matter of just and reasonable inference.’”(quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)). Therefore, because Tyson had not recorded donning and doffing time for its employees, the Mericle study was a permissible alternative means of calculating the time worked in determining overtime owed.
The Court also clarified that its ruling was consistent with its decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), because “Wal-Mart does not stand for the broad proposition that a representative sample is [always] an impermissible means of establishing class-wide liability.” Id. at 13. In Wal-Mart, the Court concluded that 1.5 million employees at various franchise locations across the country could not maintain a class action gender discrimination claim because they failed to prove a “common policy of discrimination.” In this case, by contrast, the employees in Tyson Foods all “worked in the same facility, did similar work, and [were] paid under the same policy.” Id. at 14.
The Court did not, however, go whole hog in support of the employees’ claims. In a concurring opinion, Chief Justice Roberts strongly suggested that the jury’s award is fatally flawed because it does not identify which employees did not, in fact, work more than 40 hours in a week (and thus cannot receive any damage award). If that ends up being the case, the Chief Justice explained, then the verdict must be reversed and the class decertified. In other words, it appears very likely that the class of employees has won the battle, but lost the war.
Justice Thomas dissented, writing that the class should never have been certified because of the predominance of individualized issues as to the number of hours worked each week.
The case serves as a reminder for employers to record and maintain time worked by their employees as specifically as possible, while emphasizing the many hurdles that employees must clear to prevail in a class action lawsuit.