Tyson Foods Ruling Opens the Door for Use of Statistical Averaging in Wage and Hour Class Actions – March 29, 2016
Drinker Biddle & Reath
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time records. Using this methodology, plaintiffs’ expert estimated that 212 employees did not meet the 40hour threshold
and could not recover damages for unpaid overtime; the remaining class members, however, had potentially been
uncompensated to some degree.
Crucially, Tyson failed to challenge the validity of the statistical sampling and analyses prepared by plaintiffs’ experts in a
hearing under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and made no effort to rebut the
evidence with an expert of its own. Instead, echoing its arguments in opposition to class certification, Tyson argued to the
jury that the variable amount of time that it took employees to don and doff different varieties of protective equipment
made the lawsuit “too speculative for classwide recovery.” Ultimately, although the calculations of plaintiffs’ experts
supported an aggregate award of $6.7 million dollars, the jury returned a verdict of only $2.9 million in damages for unpaid
wages.
A subsequent ruling on liquidated damages upped the total award to $5.8 million. Relying on Wal-Mart v. Dukes and other authority, on appeal, Tyson strenuously argued that the amount of time spent donning and doffing protective gear varied from person to person and required individualized inquiries, thus rendering class treatment improper. Rejecting this argument, the Court ruled that Wal-Mart did not stand for the broad proposition that a representative sample is an impermissible means of establishing class-wide liability.
Wal-Mart involved, in part, a claim that supervisors misused their discretion in hiring and promoting female employees. The employees could not point to a common policy and instead proposed using a “sample set of selected class members” to determine both liability and damages for the entire class. The Court rejected the Wal-Mart plaintiffs’ proposed methodology as “trial by formula.” By contrast, the Tyson Court noted there was a common policy with respect to liability, and the time study could be introduced in each individual claim to determine that employee’s overall hours for the week. The Court further noted that, unlike Wal-Mart, the Tyson employees all worked in the same facility, did similar work, and were paid under the same policy. The Court also was influenced by the principle that Tyson’s failure to keep records should not be used against the employees.
In this respect, the Court relied heavily on its opinion in Anderson v. Mt. Clemens Pottery Co., 328 U.S.
680, 686688 (1946), to hold that so long as “each class member could have relied on the sample to establish liability if he or she had brought an individual class action, . . .
that sample [could serve] as a permissible means of establishing the employees’ hours” on a classwide basis. Tyson, slip op. at 11. Takeaways Tyson does not necessarily erode the holding of Wal-Mart because, as the Court was careful to note, the two cases are so factually and legally different. However, in Title VII employment discrimination class actions, the courts may be open to smaller class actions involving employees who work in the same facility, perform similar tasks, or are supervised by common management. Tyson’s ramifications for wage and hour class actions are far greater.
The Tyson method of proving damages could be applied to other “off the clock” wage and hour class actions, such as preshift and postshift administrative or maintenance work, missed lunch and meal breaks, security checks, or travel between job sites. Finally, the Court assumed, without deciding, that the standards for certifying an FLSA collective action and a Rule 23 class action are the same. This may be significant because the relative sizes of the classes are different, with the FLSA collective action usually being much smaller. Several federal circuit courts of appeal have held that the standards for certifying an FLSA collective action and a Rule 23 class action are not the same.
The Court may be forecasting that it will have to decide this issue in the future. .
A subsequent ruling on liquidated damages upped the total award to $5.8 million. Relying on Wal-Mart v. Dukes and other authority, on appeal, Tyson strenuously argued that the amount of time spent donning and doffing protective gear varied from person to person and required individualized inquiries, thus rendering class treatment improper. Rejecting this argument, the Court ruled that Wal-Mart did not stand for the broad proposition that a representative sample is an impermissible means of establishing class-wide liability.
Wal-Mart involved, in part, a claim that supervisors misused their discretion in hiring and promoting female employees. The employees could not point to a common policy and instead proposed using a “sample set of selected class members” to determine both liability and damages for the entire class. The Court rejected the Wal-Mart plaintiffs’ proposed methodology as “trial by formula.” By contrast, the Tyson Court noted there was a common policy with respect to liability, and the time study could be introduced in each individual claim to determine that employee’s overall hours for the week. The Court further noted that, unlike Wal-Mart, the Tyson employees all worked in the same facility, did similar work, and were paid under the same policy. The Court also was influenced by the principle that Tyson’s failure to keep records should not be used against the employees.
In this respect, the Court relied heavily on its opinion in Anderson v. Mt. Clemens Pottery Co., 328 U.S.
680, 686688 (1946), to hold that so long as “each class member could have relied on the sample to establish liability if he or she had brought an individual class action, . . .
that sample [could serve] as a permissible means of establishing the employees’ hours” on a classwide basis. Tyson, slip op. at 11. Takeaways Tyson does not necessarily erode the holding of Wal-Mart because, as the Court was careful to note, the two cases are so factually and legally different. However, in Title VII employment discrimination class actions, the courts may be open to smaller class actions involving employees who work in the same facility, perform similar tasks, or are supervised by common management. Tyson’s ramifications for wage and hour class actions are far greater.
The Tyson method of proving damages could be applied to other “off the clock” wage and hour class actions, such as preshift and postshift administrative or maintenance work, missed lunch and meal breaks, security checks, or travel between job sites. Finally, the Court assumed, without deciding, that the standards for certifying an FLSA collective action and a Rule 23 class action are the same. This may be significant because the relative sizes of the classes are different, with the FLSA collective action usually being much smaller. Several federal circuit courts of appeal have held that the standards for certifying an FLSA collective action and a Rule 23 class action are not the same.
The Court may be forecasting that it will have to decide this issue in the future. .
