Tuesday, March 22, 2016
Today, the US Supreme Court decided Tyson Foods v. Bouaphakeo, an appeal from a jury verdict for plaintiffs seeking overtime pay via a Fair Labor Standards Act (FLSA) collective action and a Rule 23 class action under Iowa’s wage payment statute—which the parties assumed required the same proof as for the FLSA claim. The defendant: their employer, Tyson Foods, who hadn’t paid them for time they spent donning and doffing safety gear at a pork processing plant.
There’s a lot going on in this Court opinion—both on the page and in between the lines. I’ll focus here just on how the Tyson Court treated a decades-old FLSA precedent: Anderson v. Mt. Clemens Pottery Co, 328 U.S. 680 (1946).
In Mt. Clemens, the Court had declared this: In FLSA cases, if plaintiff-employees can’t prove how much time they spent doing under-compensated work because their defendant-employer failed to keep FLSA-required records, so long as the employee has produced enough evidence that he did the under-compensated work and the “amount or extent” of that work “as a matter of just and reasonable inference,” the employer must produce evidence of “the precise amount of work performed” or evidence to “negative the reasonableness of the inference to be drawn from the employee’s evidence.”
Fast forward decades later to Tyson Foods. The plaintiffs there faced this problem: For FLSA overtime claims, a plaintiff-employee has to prove that he or she had worked for over 40 hours in a work week. But, because Tyson hadn’t kept proper records of employee donning and doffing time, the plaintiffs had no individualized work time records to prove their total hours worked. So, at trial, the plaintiffs submitted “representative evidence”—key among which was study in which an expert observed a sample of 744 employees, counted donning and doffing times for each, and calculated averages by the sampled employees’ departments (cut and retrim departments: 18 minutes; kill department: 21.25 minutes). With these averages, along with individual work time records that Tyson had kept, another expert concluded that all but 212 employees in the Rule 23 certified class worked more than 40 hours, and thus might be owed overtime pay. Tyson argued against this evidence to the jury, but the jury awarded about $2.9 million in unpaid wages.
In a post-verdict motion, and later on appeal, Tyson argued for decertifying the Rule 23 class and for dismantling the FLSA collective action: Given the inadequacy of plaintiffs’ “representative evidence,” some class or collective action members would be eligible for overtime pay even though they hadn’t worked over 40 hours in a work week---or as Tyson put it, even though they hadn’t been actually injured.
On this point, the plaintiffs pressed Mt. Clemens, and the Court agreed that, given Mt. Clemens, the plaintiff’s use of its sample of donning-and-doffing times was “a permissible method of proving classwide liability.” Had each Rule 23 class member sued individually, he or she could have relied on that sample, provided that it “could have sustained a reasonable jury finding as to hours worked in each employee’s individual action.” Here, as in Mt. Clemens, the plaintiffs submitted their donning-and-doffing sample
to fill an evidentiary gap created by the employer’s failure to keep adequate records. If the employees had proceeded with 3,344 individual lawsuits, each employee likely would have had to introduce [that sample] to prove the hours he or she worked. Rather than absolving the employees from proving individual injury, the representative evidence here was a permissible means of making that very showing. . . . [I]n 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.
In so reasoning, the Court added that representative evidence can’t support “just and reasonable” inferences under Mt. Clemens if that evidence is “statistically inadequate or based on implausible assumptions could not lead to a fair or accurate estimate of the uncompensated hours an employee has worked.” (Tyson hadn’t challenged the admissibility of plaintiffs’ expert opinions under Daubert.)
In dissent (and joined by Justice Alito), Justice Thomas describes Mt. Clemens as a precedent on “shaky foundations” that the Court fundamentally misread and has now effectively expanded. Although Mt. Clemens applies only if the defendant-employer fails to keep FLSA-required records of compensable work time, for Justice Thomas,
that limitation is illusory. FLSA cases often involve allegations that a particular activity is uncompensated work . . . The majority thus puts employers to an untenable choice. 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.
Justice Thomas’ reading of Mt. Clemens is worth reading in full—as arguments implicitly rejected by the Court majority or just as the path not taken.