Why it matters
In a closely watched case, the U.S. Supreme Court has ruled that the use of representative statistical evidence for purposes of class certification in a wage and hour suit was acceptable. Employees at a Tyson Foods pork processing plant claimed they did not receive overtime pay owed for the donning and doffing of protective equipment. Because records were not kept about how much time it took for each worker to change, the class relied on representative statistical evidence at trial to establish the extra time it took to put on and take off protective gear. A federal jury awarded $2.9 million in compensatory damages. Tyson appealed, arguing that the class was incorrectly certified because the plaintiffs should not have been allowed to rely on the statistical evidence when differences in gear and among employees meant it took different amounts of time for each worker. The Eighth Circuit Court of Appeals affirmed the verdict and the Supreme Court granted certiorari. In a 6-to-2 decision, Justice Anthony Kennedy upheld the certification order. Declining to adopt a categorical rule regarding such evidence, the majority said it was appropriate in the case against Tyson because the workers used the representative sample "to fill an evidentiary gap created by the employer's failure to keep adequate records." However, Chief Justice John Roberts filed a concurring opinion expressing concern about whether the jury verdict can stand given the possibility that some class members are not entitled to damages, while Justices Clarence Thomas and Samuel Alito dissented, predicting an increase in FLSA litigation for employers.
Peg Bouaphakeo and a handful of other employees at a Tyson Foods meat processing facility in Iowa filed suit against their employer. The workers alleged they were not being paid the correct wages under both state law as well as the Fair Labor Standards Act (FLSA).
The plaintiffs were "gang-time" employees at the facility, meaning Tyson measured their compensable working time when the workers were at their stations and the production line was moving. The workers sought compensation for donning and doffing their protective equipment and clothing before and after lunch. Importantly, the protective gear and equipment worn and used by the plaintiffs varied depending on their position, ranging from hard hats to work boots to aprons and gloves, with some workers needing time to clean their knives.
In addition to "gang-time," Tyson added "K-code" time to each employee's paycheck: four additional minutes for employees using knives and several more minutes for workers for pre- and post-shift walking time intended to cover the required donning and doffing of protective gear and materials. Tyson did not record the actual time that employees performed these tasks.
The K-code time was insufficient to cover compensable pre- and post-production line activities, Bouaphakeo and the other workers alleged. After a class was certified, a nine-day trial was held. The plaintiffs presented their evidence in the form of individual timesheets and the average donning, doffing, and walking times calculated from 744 employee observations conducted by an expert.
A jury returned a $2.9 million verdict in favor of the plaintiffs. Tyson appealed, arguing that the trial court erred in certifying the class because the primary method proving injury assumed each employee spent the same time donning and doffing protective gear—even though employees took different amounts of time—and the damages awarded to the class had the potential to be distributed to some workers who did not work any uncompensated overtime.
But the Eighth Circuit Court of Appeals affirmed the court's certification order, the jury's verdict, and the damages award, and Tyson filed a writ of certiorari.
In an opinion authored by Justice Anthony Kennedy, the U.S. Supreme Court also affirmed class certification. The majority first refused to issue a categorical exclusion of representative statistical evidence, which it said "would make little sense." The permissibility of such evidence "turns not on the form a proceeding takes—be it a class or individual action—but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action."
In many cases, a representative sample may be the only practicable means to collect and present relevant data to establish a defendant's liability, the justices added, and instead of punishing the employee by denying recovery on the ground that he is unable to prove the precise extent of uncompensated work, the evidence is acceptable if it is sufficient "to show the amount and extent of that work as a matter of just and reasonable inference."
The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference drawn from the employee's evidence, the Court said, relying on a prior decision in Anderson v. Mt. Clemens.
In the suit against Tyson Foods, the workers used the representative sample "to fill an evidentiary gap created by the employer's failure to keep adequate records," Justice Kennedy—joined by Chief Justice John Roberts and Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan—wrote. "Rather than absolving the employees from proving individual injury, the representative evidence here was a permissible means of making that very showing."
Further, reliance on the statistical evidence "did not deprive [the employer] of its ability to litigate individual defenses," the majority said. "Since there were no alternative means for the employees to establish their hours worked, [Tyson's] primary defense was to show that [the statistical evidence] was unrepresentative or inaccurate." The employer also declined to request a hearing to challenge the statistical validity of the expert report under Daubert v. Merrell Dow Pharmaceuticals, Inc., the Court noted, and did not present evidence from its own expert to counter the plaintiffs' expert.
The Court distinguished Wal-Mart Stores, Inc. v. Dukes by noting that the experiences of the plaintiffs in that class action bore little relationship to one another, while "in this case each employee worked in the same facility, did similar work, and was paid under the same policy. As Mt. Clemens confirms, under these circumstances the experiences of a subset of employees can be probative as to the experiences of all of them."
Not all representative statistical evidence will pass muster, the justices explained, and evidence that is statistically inadequate or based on implausible assumptions will not be permitted in a courtroom. Once a district court finds evidence to be admissible, its persuasiveness is, "in general, a matter for the jury."
"Whether a representative sample may be used to establish classwide liability will depend on the purpose for which the sample is being introduced and on the underlying cause of action," the Court wrote. "In FLSA actions, inferring the hours an employee has worked from a study such as [the expert's] has been permitted by the Court so long as the study is otherwise admissible. The fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases."
The justices also addressed the employer's concern that division of the damages award among the class would be problematic, as some members may not have been injured and have no legal right to any damages. Based on the calculations of the plaintiffs' expert, the class requested almost $6.7 million in damages, but the jury awarded less than half of that, Tyson pointed out, without any explanation as to which workers should be paid and how much.
The record does not indicate how the damages award will be disbursed, the Court said, leaving the issue for the district court to address in the first instance. But the majority expressed its belief that ways of distributing the award to only those individuals who worked more than 40 hours were available—working backwards from the damages award and assuming each employee donned and doffed for an identical amount of time, for example.
In a separate concurrence joined by Justice Samuel Alito, the Chief Justice articulated "concern that the District Court may not be able to fashion a method for awarding damages only to those class members who suffered an actual injury," because "we do not know how much donning and doffing time the jury found to have occurred in each department, we have no way of knowing which plaintiffs failed to cross that 40-hour threshold."
"Given this difficulty, it remains to be seen whether the jury verdict can stand," the Chief Justice wrote.
Justice Clarence Thomas (also joined by Justice Alito) authored a dissenting opinion that found the district court failed to "give proper consideration to the significance of variable donning and doffing times" and that the majority "redefine[ed] the predominance standard of Rule 23(b)(3)."
"The majority thus puts employers to an untenable choice," Justice Thomas wrote. "They must either track any time that might be the subject of an innovative lawsuit, or they must defend class actions against representative evidence that unfairly homogenizes an individual issue. Either way, the majority's misinterpretation of Mt. Clemens will profoundly affect future FLSA-based class actions—which have already increased dramatically in recent years."
To read the opinion in Tyson Foods, Inc. v. Bouaphakeo, click here.