In March, the Supreme Court, in a 6-2 decision, held in Tyson Foods, Inc. v. Bouaphekeo that the district court did not err in certifying and maintaining a class of employees who alleged violations of the Fair Labor Standards Act, notwithstanding the employees’ reliance on “representative evidence” to determine the number of additional hours that each employee worked, when the employer had failed to keep adequate records.
Until 1998, employees at the plant were paid under a system called “gang-time.” This compensated them only for time spent at their workstations, not for the time required to put on and take off their protective gear. In response to a federal court injunction and a Department of Labor suit to enforce that injunction, Tyson in 1998 began to pay all its employees for an additional four minutes a day for what it called “K-code time.” The four-minute period was the amount of time Tyson estimated employees needed to don and doff their gear. In 2007, Tyson stopped paying K-code time uniformly to all employees. Instead, it compensated some employees for between four and eight minutes, but paid others nothing beyond their gang-time wages. At no point did Tyson record the time each employee spent donning and doffing.
Plaintiffs alleged that donning and doffing protective gear were integral and indispensable to their hazardous work and that petitioner’s policy not to pay for those activities denied them overtime compensation required by the Fair Labor Standards Act. Respondents also raised a claim under the Iowa Wage Payment Collection Law.
Tyson argued that, because of variations in the protective gear each employee wore, the employees’ claims were not sufficiently similar to be resolved on a classwide basis. The District Court rejected that position. It concluded there were common questions susceptible to classwide resolution, such as “whether the donning and doffing of [protective gear] is considered work under the FLSA, whether such work is integral and [in]dispensable, and whether any compensable work is de minim[i]s.” The District Court acknowledged that the workers did not all wear the same protective gear, but found that “when the putative plaintiffs are limited to those that are paid via a gang time system, there are far more factual similarities than dissimilarities.”
Although it had not kept records for time spent donning and doffing, Tyson had information regarding each employee’s gang-time and K-code time. Using this data, the employees’ expert, Dr. Liesl Fox, was able to estimate the amount of uncompensated work each employee did by adding Mericle’s estimated average donning and doffing time to the gang-time each employee worked and then subtracting any K-code time. For example, if an employee had worked 39.125 hours of gang-time in a 6-day work week and had been paid an hour of K-code time, the estimated number of compensable hours the employee worked would be: 39.125 (individual number of gang-time hours worked) + 2.125 (the average donning and doffing hours for a 6-day week, based on Mericle’s estimated average of 21.25 minutes a day) – 1 (K-code hours) = 40.25. That would mean the employee was being undercompensated by a quarter of an hour of overtime a week, in violation of the FLSA. On the other hand, if the employee’s records showed only 38 hours of gang-time and an hour of K-code time, the calculation would be: 38 + 2.125 – 1 = 39.125. Having worked less than 40 hours, that employee would not be entitled to overtime pay and would not have proved an FLSA violation. Using that methodology, Fox stated that 212 employees did not meet the 40-hour threshold and could not recover. The remaining class members, Fox maintained, had potentially been undercompensated to some degree.
The Supreme Court affirmed this methodology 6-2. In permitting the evidence, the Court held that a representative sample is often “the only practicable means to collect and present relevant data” establishing a defendant’s liability. It also held that “in a case where representative evidence is relevant in proving a plaintiff’s individual claim, that evidence cannot be deemed improper merely because the claim is brought on behalf of a class. One way for respondents to show, then, that the sample relied upon here is a permissible method of proving classwide liability 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. If the sample could have sustained a reasonable jury finding as to hours worked in each employee’s individual action, that sample is a permissible means of establishing the employees’ hours worked in a class action.”
For these reasons, the court concluded that “the study here could have been sufficient to sustain a jury finding as to hours worked if it were introduced in each employee’s individual action. While the experiences of the employees in Wal-Mart [v. Dukes] bore little relationship to one another, in this case each employee worked in the same facility, did similar work, and was paid under the same policy. This is not to say that all inferences drawn from representative evidence in an FLSA case are ‘just and reasonable.’ Representative evidence that is statistically inadequate or based on implausible assumptions could not lead to a fair or accurate estimate of the uncompensated hours an employee has worked. Petitioner, however, did not raise a challenge to respondents’ experts’ methodology under Daubert; and, as a result, there is no basis in the record to conclude it was legal error to admit that evidence.”
The Court ended the opinion by limiting it to its facts: “The fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.”
Relevant Impact on Future Proceedings
The Supreme Court’s decision could be seen as a willingness to permit representative evidence in the Rule 23 context. However, the Court’s decision was largely limited to its facts. Moreover, the Court’s analysis was in the FLSA context, which has a much more liberal standard for certification, requiring only that class members be “similarly situated,” as opposed to the more rigorous standards of Rule 23. Therefore, it is unclear what broader impact, if any, the decision will have on pending class actions.
Troutman Sanders LLP has extensive experience in representing clients in class action litigation. It will continue to monitor the interpretation of this decision by lower courts.