In our third installment of articles looking at the employment law cases being heard by the US Supreme Court this fall term, Tyson Foods Inc. v. Bouaphakeo will have importance in both the wage & hour and class action litigation worlds. "Donning and Doffing " – who knew!
Another
Watershed Moment for Class Actions? SCOTUS to
Address Limits on Statistical Proof In Class and Collective
Actions
By Michael Kopp
In a case that is certain to provide an important sequel to the Dukes decision, the Supreme Court will hear argument next week on Tyson Foods Inc. v. Bouaphakeo, to address (1) the use of statistical averaging in class actions to prove liability and damages, and (2) whether courts may certify a class that includes individuals with no injury.
Tyson Foods is important because it will likely set further markers on how far the court's prohibitions against statistical modelling extend, and more significantly, how these concepts apply to collective actions under the Fair Labor Standards Act. For this reason, employers' eyes are on Tyson Foods, as the Supreme Court has not previously addressed how Dukes' analysis applies to collective actions under the FLSA, and whether the FLSA's "similarly situated" standard differs from Rule 23(b).
The road to the Supremes. Tyson Foods reached the Supreme Court by way of a divided Eighth Circuit opinion affirming a $5.8 million verdict on an off-the-clock class wage claim. Plaintiffs claimed that Tyson's Iowa meat processing facility had not paid over 3000 plant workers for the time they spent changing in and out of their work gear and walking to and from the production line. The district court found there was a common question as to whether the challenged time was compensable, and certified the case as a collective action as to the FLSA claim, and as Rule 23 class action as to the state law wage and hour claims.
Tyson unsuccessfully attempted to decertify the class, and argued neither liability nor damages were "capable of classwide resolution ... in one stroke," as required by Dukes. Tyson pointed to variations in the type and amount of equipment worn by employees in the hundreds of classifications at issue, and highlighted the disparities in the routines and amount of time employees spent on these tasks. Unpersuaded, the district court permitted a nine-day jury trial on the class claims, where plaintiffs used a statistical model to calculate the "average" time employees spent on the donning, doffing and walking activities at issue. These average activity times were then extrapolated to the class members. Although plaintiffs' expert conceded that the actual times for these activities varied considerably – and over 200 class members suffered no injury at all – the jury nonetheless awarded a lump sum verdict, to be divided among all class members.
Divided approaches to Dukes. The divided Eighth Circuit panel's majority opinion and dissent highlight the inconsistent approaches lower courts have taken in interpreting Dukes. The panel majority found that there was a common question concerning whether the activities were compensable under the FLSA and state law, and that plaintiffs had "prove[n] liability for the class as a whole, using employee time records to establish individual damages."
The dissent took the majority to task for ignoring the considerable differences in donning and doffing times, employee routes to their work stations, the amount of time Tyson allotted for such activities, shortened time shifts, "and a myriad of other relevant factors." Using statistical models to gloss over those differences violated Dukes' requirement that the action generate "common answers apt to drive the resolution of the litigation." Moreover, the dissent highlighted the critical problem with the majority's distinction between the classwide liability determination and the individual damages analysis. Unlike other class claims, establishing a violation in wage and hour actions generally turns upon and "includes the measure of a class member’s individual damages." In other words, an employer is only liable to an individual if the employee has actually suffered an injury, such as the compensable loss of overtime. For that reason, a verdict that "result[s] in a single-sum, class-wide verdict from which each class member, damaged or not, will receive" compensation, is fundamentally inconsistent with Dukes' prohibition against "trial by formula."
Why This Case Matters. First, the Supreme Court will have the opportunity to clarify the extent of Dukes limitations on the use of statistical techniques to establish damages and liability. Second, the case has particular significance in the wage and hour context, because it provides the opportunity for the Supreme Court to weigh in for the first time as to whether the standards for certifying a Rule 23(b) class action apply to collective FLSA actions, and whether the FLSA's "similarly situated" standard alters the analysis. Third, the case provides the opportunity for the court to address Tyson Food's constitutional argument that an award of monetary damages to uninjured class members is impermissible. This is particularly critical, as it is a common feature for wage and hour actions to include class members with no identifiable actual wage loss or injury.
Stay Tuned ... This case is set for oral argument on Tuesday, November 10, so be on the lookout for a follow up blog post here when a decision is reached.
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