Appeals Court Overrules Decision on Wage Violations

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A federal appeals court ruled that a federal district court was incorrect in saying that a food-processing company was responsible for about $24 million in wage violations.

In separate lawsuits, the district court found that Tyson Food Inc. was liable under the Fair Labor Standards Act and Nebraska labor laws for not adequately compensating production meatpacking employees for time spent changing clothes and walking between the production line, lockers and wash stations.

However, the appeals court said that the employees failed to follow FLSA procedure in filing consent forms used to initiate a collective action lawsuit. Because of the filing issues, the overtime claims under the FLSA should have been dismissed, the appeals court said. Additionally, the employer did not violate state laws, the court said.

Under state labor laws, employees can recover only wages an employer previously agreed to pay, the court said. A union contract specifying work time as spent in the production line and a 2007 settlement agreeing to compensate four minutes of clothes-changing time served as pre-existing agreements, the court said.

Employees could not prove Tyson Food agreed to pay them more, the court said.

The Supreme Court, in its upcoming term, is to hear another clothes-changing case in which Tyson was held liable for $5.8 million in unpaid wages and damages to employees at an Iowa pork-processing plant (Tyson Foods, Inc. v. Bouaphakeo, U.S., No. 14-1146, cert. granted 6/8/15). The employees claimed that the time Tyson automatically added to paychecks for changing into special gear and walking to and from job sites was insufficient compensation for the required activities.