Jun 09

Supreme Court Will Hear Case Where Defendant Says Lax Class Certification Standards Allowed the Use of Averages and an Improper “Trial by Formula”

The Supreme Court granted cert. yesterday in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146 (U.S. June 8, 2015), a case that raises important issues on how class and collective actions are certified and adjudicated—and may allow the Court to provide further guidance on questions it addressed in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).

The case involves claims of undercompensated overtime pay under the federal Fair Labor Standards Act (“FLSA”) and Iowa state wage law by current and former employees of Tyson Foods, Inc. at a meat-processing plant in Storm Lake, Iowa.  The six named plaintiffs allege that Tyson failed to compensate them fully for time spent “donning” and “doffing” personal protective gear and walking to and from their work stations.  Tyson’s policy added a fixed amount of additional compensated time each day to account for these activities, but plaintiffs say it was inadequate.  The district court certified a collective action for the FLSA claims and a Rule 23(b)(3) class for the Iowa state wage law claims and allowed both sets of claims to be tried together.  After a nine-day trial, the jury returned a verdict for the class of $2,892,378.70—which, with liquidated damages, became a final judgment totaling $5,785,757.40.  The Eighth Circuit affirmed over the dissent of one circuit judge.  Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791 (8th Cir. 2014).  Rehearing en banc was denied by a vote of 6-5.

Tyson’s petition for cert.—which the Court granted and will hear next term—raises important class certification issues.  First, Tyson argues the district court should have decertified the class because the evidence showed that employees wore different types of protective gear depending on their jobs and took different amounts of time putting that equipment on and taking it off.  Second, Tyson argues the district court abused its discretion in permitting the classwide claims to go to the jury based on (a) an expert’s time study that purported to calculate the average time employees spent on donning/doffing-related activities by observing and timing a sample of them, and (b) another expert’s use of employee time records to calculate the uncompensated overtime for each employee based on the assumed average amount of donning/doffing-related time.  Tyson objects to this proof as the type of “trial by formula” the Supreme Court rejected in Wal-Mart.  Third, Tyson argues that even including the expert’s average uncompensated time, the evidence showed that over 200 employees in the class of 3,334 worked no more than 40 hours in any single week—meaning they would be entitled to no additional compensation under the FLSA or the Iowa state wage law. And because the jury award was less than half the classwide damages the plaintiffs’ experts calculated, Tyson asserts that the aggregate damage award will improperly pay overtime to hundreds of employees who would not be able to prove an individual claim. Tyson argues that permitting a class or collective action to proceed when so many members were not injured was improper.

Tyson Foods presents important and recurring issues about what kind of “common” proof will suffice to get a class or collective action initially certified and then submitted to a jury—and whether certified classes may include members who could not (or did not) suffer any injury.  Of course, the Court may not see the need to decide all these issues, but like Wal-Mart and Comcast, this will be a closely watched decision from a Supreme Court that seems very interested in class certification.


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