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May 11 — A recent U.S. Supreme Court decision holding that representative proof may be used to certify class and collective wage-and-hour claims may have limited applicability, employment attorneys said.
In Tyson Foods, Inc. v. Bouaphakeo, the U.S. Supreme Court affirmed a $5.8 million judgment against Tyson Foods Inc. under the Fair Labor Standards Act and the Iowa Wage Payment and Collection Law (136 S. Ct. 1036, 26 WH Cases2d 297 (2016)); (55 DLR AA-1, 3/22/16).
The high court upheld a decision by the U.S. Court of Appeals for the Eighth Circuit that a district court didn't abuse its discretion by certifying a class of 3,344 former and current employees at Tyson's Storm Lake, Iowa, plant who claimed the company violated wage and hour laws by denying them overtime pay for time spent putting on and taking off safety gear (166 DLR A-5, 8/27/14).
The court went out of its way to restrict the holding to the facts and circumstances of this particular case, said management-side attorney Joel M. Cohn, head of the Akin Gump Strauss Hauer & Feld LLP national wage and hour practice.
Cohn pointed to Justice Anthony Kennedy's language in the majority opinion, stating that the “fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.”
Megan Mechak, a partner at employee-side firm Woodley & McGillivary in Washington, said she'd like to believe the ruling will apply across cases, but at least one court has already concluded that Tyson was a narrow holding.
In Tyson, certain employees at the processing plant were paid “gang time” for the time spent on the production line.
But Tyson didn't record the actual time employees spent donning and doffing protective equipment and walking to the production line. Instead, the company added a set amount of minutes per shift to employees' paychecks for similarly categorized positions.
Current and former employees asserted that the time Tyson automatically added to paychecks was insufficient to cover pre- and post-production line activities.
The employees sought to certify their class and collective claims for overtime wages using representative evidence that was based on a statistical study that produced average times for donning and doffing protective gear.
The Supreme Court said the employees “sought to introduce a representative sample to fill an evidentiary gap created by the employer’s failure to keep adequate records.”
Relying on its decision in Anderson v. Mt. Clemens Pottery Co., 8 U.S. 680, 6 WH Cases 83 (U.S. 1946), the high court said the plaintiffs were permitted to use a statistical sample to establish classwide liability under the FLSA and state law.
The fundamental issue from Mt. Clemens was about the rule that applies when an employer fails to keep adequate records, Laura Moskowitz said during the May 11 webinar. Moskowitz is a senior attorney with the Fair Labor Standards Division of the U.S. Department of Labor’s Office of the Solicitor.
In Mt. Clemens the court said that when employers don't keep adequate time records, employees meet their burden by showing they performed inadequately compensated work and by producing “sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.”
The Tyson court rejected the company's argument that the employees were using a similar “trial by formula” statistical sampling that was rejected in Wal-Mart Stores Inc. v. Dukes, 131 S. Ct. 2541, 112 FEP 769 (U.S. 2011).
In Dukes, a proposed class of female employees alleged that Wal-Mart violated Title VII of the 1964 Civil Rights Act by discriminating against women in pay and promotions nationwide.
The high court said the employees didn't present a common issue of law or fact as required for class certification under Rule 23 of the Federal Rules of Civil Procedure.
There was no nationwide policy in Dukes, Mechak said. There was a proposed class of 1.5 million female employees across 3,400 stores where managers had at least some discretion over promotion and pay practices, she said.
The court in Dukes found that under some circumstances, giving discretion to managers may be evidence of disparate treatment, but not according to the facts presented in that case, Mechak said.
At its core, the court in Dukes concluded that the plaintiffs failed to show there was a common policy that caused the alleged discrimination or disparities, Cohn said. “That was the primary basis for how the Supreme Court distinguished Dukes from Tyson.”
The Supreme Court in Tyson said the “case presents no occasion for adoption of broad and categorical rules governing the use of representative and statistical evidence in class actions.”
It's business as usual from a Labor Department enforcement perspective, but the ruling is an added “plus,” Moskowitz said. The ruling supports the enforcement activities the department already carries out, she said.
“I think the court went out of its way to explain that the holding should be limited to the circumstances presented,” Cohn said.
Mechak said she was hoping to say it’s a game changer, even though it doesn’t change the landscape for plaintiffs’ attorneys on how they litigate these types of matters.
It does provide a road map for employees on how to get back wages that were pocketed by employers, Mechak said. And the court made clear that Dukes is only going to apply in very narrow circumstances moving forward, she added.
The webinar, “The Supreme Court's decision in Tyson Foods: Game Changer or Business as Usual?” was presented May 11 by the Labor and Employment Law Section of the American Bar Association.
To contact the reporter on this story: Lisa Nagele-Piazza in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Susan J. McGolrick at email@example.com
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