Last week’s Quick Study (see March 23, 2016 publication here) observed that the U.S. Supreme Court in Tyson Foods, Inc. v. Bouaphakeo, 2016 WL 1092414 (Mar. 22, 2016) decided the class-certification issues on fairly narrow grounds. Specifically, “representative evidence” was deemed permissible because such evidence could have been used to establish liability and damages in individual cases. What the Court didn’t decide is equally important for human resources and labor & employment practitioners. The Court expressly declined to create “broad and categorical rules governing the use of representative and statistical evidence in class actions.” Id., *11. Moreover, the Court also declined to consider whether plaintiffs must offer proof that all class members were actually injured, and whether the damages award could be apportioned so that only injured class members recover. Id., *12. The flip side of such a narrow holding means that plaintiffs’ attorneys, in certain larger class actions, now have a significant incentive to argue and litigate longer into a case to try to show that their representative evidence or sampling satisfies the type of methodology found acceptable in Tyson Foods.
The 6-2 majority opinion by Justice Anthony Kennedy affirmed a classwide jury verdict on claims for unpaid overtime related to uncompensated donning and doffing time. During the relevant period, Tyson paid all of its employees for an additional four minutes a day for donning and doffing of their protective gear. In 2007, the Company began compensating some employees for between four and eight minutes for donning and doffing time, but paid others nothing. There were no records of the actual donning and doffing time for any class member so plaintiffs relied on representative evidence in the form of statistical averages of donning and doffing time created by the plaintiffs’ industrial relations expert. Plaintiffs added the averages to the class members’ recorded work time to determine which class members worked more than 40 hours (including don/doff time) without receiving overtime pay and then determined the amount of uncompensated overtime for the class.
Critical to the Supreme Court’s analysis was its conclusion that the statistical evidence would have been admissible in an individual FLSA action. Id., *11. The Court previously has held that if an employer did not meet its duty under the FLSA to keep proper time records, an employee may establish uncompensated time by producing “sufficient evidence to show that the amount and extent of that work as a matter of just and reasonable inference.” Id., *12. The Court found the plaintiffs’ representative evidence met the class members’ burden of proving uncompensated overtime, which shifted the burden to the employer to show that individual employees had lower donning and doffing time. . Id., *9.
The majority distinguished the use of statistical evidence endorsed in Tyson Foods from the sampling rejected in Wal-Mart v. Dukes. In Dukes, the Supreme Court rejected the plaintiffs’ proposal to rely on a sample of class members to determine liability for alleged sex discrimination and to assess the amount of backpay damages under Title VII. The Dukes Court held that such sampling could not be used to establish a common policy of discrimination. In Tyson Foods, the nature and application of the employer’s policy regarding donning and doffing were not disputed. The statistical evidence was offered to demonstrate the amount of time plaintiffs spent donning and doffing. The Tyson Foods Court held that the plaintiffs’ statistical evidence supported the classwide verdict because the evidence supported a finding that “each employee donned and doffed for the same average time.” Id., *8. The majority viewed its holding as consistent with Dukes because the data relied on by the plaintiffs in Tyson Foods was “sufficient to sustain a jury finding as to hours worked if it were introduced in each employee’s individual action.” Id., *11.
Because Tyson Foods did not set broad rules, the case has not opened the door to the use of statistical evidence in all class actions. If Tyson had kept records of the class members’ actual donning and doffing time, there would have been no reason for the plaintiffs to rely on statistical or other representative evidence. The Court further explained that “the fairness and statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.” Id. In many off-the-clock and misclassification cases, there will likely be too much variation in duties and work time to warrant the use of representative evidence. Thus, while statistical evidence may be permitted in some FLSA cases post-Tyson Foods, such evidence must still meet the Daubert evidentiary standard (no such challenge was made in Tyson Foods) and clear the hurdles posed by the other rules of evidence. Id., *11. Finally, the Tyson Foods case does not support class certification where the plaintiffs, as in Dukes, fail to show that they are linked by a common policy or practice of the employer.
The Tyson Foods Court’s decision makes clear that plaintiffs under certain circumstances can use representative evidence in wage and hour class action lawsuits. Tyson Foods certainly underscores the importance of ensuring that compensation policies provide for the proper recording and payment of all compensable time, as required by the FLSA and analogous state or local laws and regulations. Employers would be wise to review such practices with their human resource professionals and labor & employment counsel to see if they would be vulnerable to the use of such representative evidence.