Supreme Court ruling eases the way for certain class actions

March 22, 2016 - by: Tammy Binford 0 COMMENTS

The U.S. Supreme Court ruled March 22 that the use of statistical evidence to create a class action lawsuit against Tyson Foods was proper, an action that may make it easier for employees in certain situations to band together to sue their employers rather than suing as individuals.

The Court ruled 6-2 in Tyson Foods v. Bouaphakeo that the lower court was correct in allowing employees to use a study performed by an industrial relations expert to establish a class of workers at a Tyson pork processing plant in Storm Lake, Iowa.

The workers claimed they weren’t paid correctly for the time they spent donning and doffing protective equipment required for their hazardous jobs, and that resulted in them being denied overtime wages required by the Fair Labor Standards Act (FLSA) and an Iowa wage law. The ruling upholds a $5.8 million judgment against the company.

Jo Ellen Whitney, a senior shareholder in the Davis Brown Law Firm in Des Moines, Iowa, and editor of Iowa Employment Law Letter, said that in affirming the Iowa court’s original assessment regarding class qualification, the Supreme Court looked at several workplace factors. One issue was Tyson’s use of a “gang time” system to pay employees. “The Court appears to view this payroll protocol as a clear indicator that all employees who were paid based on gang time were essentially doing the same work,” she said.

To establish that the donning and doffing time qualified them for overtime, the employees relied on a study by an industrial relations expert who conducted videotaped observations analyzing the amount of time donning and doffing took. He then averaged the time taken to produce an estimate of the time necessary to put on and take off the protective equipment. Those estimates were used to determine which class members should have received overtime pay.

Instead of tracking the actual time employees spent donning and doffing, Tyson added on some time each day, what the company called K-time, Whitney said.

Tyson argued that the fact that different equipment was donned each day based on where an employee was stationed “resulted in variables that would defeat class certification,” Whitney said, adding that the workers argued that it was all the same work and they “filled in the gap of unrecorded donning and doffing time with representative evidence.”

Whitney said it is important to note that the ruling “is not a blanket acceptance of representative evidence, as the Court notes that the use of such statistical models is dependent on a variety of factors, including why the evidence is being used and the weight of the underlying real factual similarities for each class member.”

“However,” Whitney said, “the use of evidence of this type here gives added weight to its use in future cases.”

The ruling’s syllabus says it is consistent with other rulings related to class and individual actions. “This case presents no occasion for adoption of broad and categorical rules governing the use of representative and statistical evidence in class actions,” the syllabus states. “Rather, the ability to use a representative sample to establish classwide liability will depend on the purpose for which the sample is being introduced and on the underlying cause of action.”

Employer takeaway

The estimation of donning and doffing time is common in many industries, Whitney said, but was of concern in the Tyson case because Tyson could have accurately accounted for the time.

“The Department of Labor always prefers actual time records, not estimates,” Whitney said. She advises employers that estimate time to make sure records back up their estimates. Also, employers should make sure they are estimating actual activities and should revisit their estimates on a regular basis.

About Tammy Binford:
Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications. In addition, she writes for HR Hero Line and Diversity Insight, two of the ezines and blogs found on HRHero.com.
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