Co-authored by Richard Alfred, Patrick Bannon, and Daniel Whang
Companies burdened by an avalanche of wage and hour class and collective actions have been hoping that Tyson Foods, Inc. v. Bouaphakeo might be the game-changing decision they have been waiting for. If the oral argument before the Supreme Court this morning is an accurate indication (and it may not be), they may have to wait a little longer.
In thousands of cases over the last ten years, federal courts have struggled to decide when an employee can convert an ordinary wage dispute into a class action under state law or a collective action under the Fair Labor Standards Act. Despite the frequency with which these issues arise, and their importance, Tyson Foods is the Supreme Court’s first opportunity to weigh in on the subject.
As we have described in our earlier posts, [here, here, and here], several named plaintiffs claimed that Tyson Foods failed to pay a class of more than 3,000 employees in a pork processing plant for time spent “donning” and “doffing” various kinds of sanitary and protective gear and for other pre- and post-shift activities. The trial judge allowed the case to proceed as a class action under Iowa law and allowed several hundred employees to opt in to an FLSA collective action. At trial, the plaintiffs presented an expert witness who videotaped employees at the beginning and end of their shifts and calculated the average time they spent on various tasks.
The jury reached a $5.9 million lump-sum verdict in favor of the certified class. Significantly, however, the jury’s verdict was much less than the amount plaintiffs’ experts had calculated by averaging the donning, doffing, and walking time spent by about several hundred of the class members.
In its Supreme Court briefing, Tyson Foods attacked (1) the determination of liability and damages by averaging the experiences of dissimilar class members, and (2) the inclusion in the class of individuals who never suffered any lost pay. Underlying these issues are important questions regarding whether plaintiffs in a class action may satisfy the predominance requirement of Rule 23(b)(3) merely by alleging an unlawful compensation practice or policy, even if the challenged policy affects different proposed class members differently–and some not at all; and whether the “similarly situated” standard of FLSA §216(b) incorporates the requirements of Rule 23.
At oral argument, the Justices, although animated in their questioning of both sides (as well as of the government’s attorney who argued as a friend of the court for the Department of Labor), mostly bypassed these broad questions, focusing instead on more FLSA- and case-specific issues.
Much of the argument focused on whether the case should be decided, not on the application of Rule 23(b)(3) or the “similarly situated” standard for FLSA collective actions, but on the application of a 1947 Supreme Court decision, Andersen v. Mt. Clemens Pottery Co. From nearly the beginning of the argument, first Justice Kagan and later Justices Kennedy, Breyer, and Sotomayor, peppered Tyson Foods’ attorney with questions about that case and whether it, rather than Rule 23, should drive the Court’s decision. Relying on the part of Mt. Clemens Pottery in which the Court decided that evidence of the average time spent on a task could be used to determine FLSA damages if the employer did not keep records of actual time worked, these Justices questioned whether averaging might be proper because Tyson Foods had not kept records of the exact time spent by each class member putting on and taking off each specific article of gear. In response, Tyson Foods’ attorney argued that Mt. Clemens Pottery only applied to the damages phase and should not be extended to a determination of liability. Responding to questions from Justices Alito and Kennedy about whether it would be fair to penalize employers for not having records of time spent on activities that they believed in good faith were non-compensable, the Assistant Solicitor General arguing for the government in support of the plaintiffs, contended that Mt. Clemens required that result.
Several of the Justices seemed interested in whether it would be possible for the district court judge on remand to sort out which employees had and had not been injured and how the damages the jury awarded should be allocated. Justices Kagan and Kennedy seemed to think that task would be easy. Justices Roberts, Sotomayor and Alito pointed out, however, that the jury must have rejected some aspects of the plaintiffs’ evidence because of the large discrepancy between the verdict and the experts’ calculation of damages. Would it be possible, these Justices wondered, for the district court judge to determine damages for specific class members when she could not know the reason for the jury’s damages reduction–whether the jury had concluded that the average times for donning and doffing specific items were inflated or whether some averages were accurate and others way off the mark? And, these Justices worried that, without knowing which tasks were undercompensated, the judge would not know which class members the jury decided had been denied overtime pay.
The Justices also discussed whether Tyson Foods has standing to object to how the district court allocates the judgment among class members. Even if some class members are overcompensated and others undercompensated, the employees’ counsel argued, the mistakes will not increase Tyson Foods’ liability. Tyson Foods responded, however, that the legal peace that is created when an employee is paid all the wages he or she is owed gives the company standing to object if the employee’s share of the judgment is reduced because of payments to employees who were not truly injured.
Finally, several of the Justices devoted significant time to a surprisingly detailed discussion of the extent of variation among class members as to the clothing and protective gear they used and how long it took them to put on or take off specific items. So specific were the Justices’ questions that, at one point, laughter broke out in the courtroom when Justice Ginsberg rehearsed the exact sanitary gear worn by class members (“hard hats, ear plugs or ear muffs, and boots”) and then chided class counsel, along with Chief Justice Roberts and Justice Scalia, for omitting “boots” from his list.
Forecasting a Supreme Court decision based on oral argument is a hazardous proposition. Whether it is a game-changer or not, we will report on this case again when the Supreme Court issues its decision–most likely in Spring 2016.