Supreme Court Observations: Tyson Foods, Inc. v. Bouaphakeo

Cruz-Alvarez_FFeatured Expert Contributor – Civil Justice/Class Actions

By Frank Cruz-Alvarez, Shook, Hardy & Bacon L.L.P. (co-authored with Rachel A. Canfield, an associate with the firm)

The U.S. Supreme Court recently deviated from its historically stringent view on class certification and affirmed an Eight Circuit decision to uphold certification of a class of Tyson Foods, Inc. employees who brought suit against Tyson for a violation of the Fair Labor Standards Act of 1938 (FLSA).  Justice Anthony M. Kennedy authored the six-member majority opinion.  Tyson Foods, Inc. v. Bouaphakeo

The class-action lawsuit arose after Tyson, in 1998, began paying all employees at its pork processing plant for an additional four minutes per day, the estimated amount of time needed to “don and doff” certain protective gear.  In 2007, Tyson adjusted this policy to pay some employees for an additional four to eight minutes of donning and doffing protective gear per day, while other employees did not receive any additional pay for the same activity.  Plaintiffs alleged Tyson’s failure to compensate them for time spent performing this “integral and indispensable” work activity violated the FLSA by lengthening their workweek beyond forty hours without providing them with overtime pay.  The District Court certified a class of 3,334 pursuant to Federal Rule of Civil Procedure 23 and, of those members, 444 were also certified as FLSA collective action members.

Because Tyson did not keep records of donning and doffing time, the employees relied on representative evidence which included employee testimony, video recordings, and a study performed by an industrial-relations expert that calculated an average amount of time each group of employees spent donning and doffing.  The jury returned a special verdict of approximately $2.9 million in compensatory damages and the verdict reached approximately $5.8 million after liquidated damages were added.  The Eight Circuit affirmed the District Court’s ruling on class certification and the Supreme Court granted certiorari.

On review, Tyson first challenged whether certification based on representative evidence was sufficient to satisfy Rule 23(b)(3)’s requirement that “questions of law or fact common to class members predominate over any questions affecting only individual members.”  Second, Tyson challenged whether certification was proper of a class that contained hundreds of members who were not injured and had no right to damages.

With respect to whether the class satisfied Rule 23(b)(b)’s predominance standard, Tyson relied heavily on the Court’s 2011 decision in Wal-Mart Stores, Inc. v. Dukes, which rejected the use of representative evidence and decertified one of the most expansive class actions to date.  Tyson urged the Court to interpret Wal-Mart’s holding as a wholesale bar to such evidence in all class action cases.  The Court, however, declined to adopt such an expansive reading and concluded that it “would reach too far were it to establish general rules governing the use of statistical evidence … in all class-action cases.”  Instead, the Court explained that such evidence is permissible depending on the “degree to which the evidence is reliable in proving or disproving the elements.”  Justice Kennedy further noted that “[i]n many cases, a representative sample is ‘the only practicable means to collect and present relevant data’ ” to establish liability.

The Tyson analysis distinguishes Wal-Mart on the facts, noting that Tyson is in accord with Wal-Mart.  The company policy in Wal-Mart afforded local supervisors discretion over employment decisions.  There, the employees relied on representative or statistical evidence of pay and promotion disparities, anecdotal reports of discrimination, and the testimony of a sociologist who concluded the company was susceptible to gender discrimination.  As the Tyson Court recognized, in Wal-Mart, the employees were not “similarly situated” because “none of them could have prevailed in an individual suit by relying on depositions detailing the ways in which other employees were discriminated against by their particular store managers.”  Absent common “glue holding the alleged reasons for all those decisions together” the Court held that the evidence did not establish significant proof of a common discriminatory policy and, without such proof, class certification was improper.

One critical distinction in Tyson was that the employees “worked in the same facility, did similar work, and were paid under the same policy” and would have had to introduce the representative evidence to prove individual hours worked had the employees proceeded with individual lawsuits.  The other is that Tyson failed to keep records of the employees’ donning and doffing.  As a result, the Court found that its 1946 decision in Anderson v. Mt. Clemens Pottery Co.—which sanctions the use of representative evidence as a remedial measure “to fill an evidentiary gap created by the employer’s failure to keep adequate records”—controlled.  The Court, however, indicated that there may have been other reasons to exclude the evidence, remarking that Tyson’s failure to challenge the expert study at trial under Daubert v. Merrell Dow Pharmaceuticals, Inc., left the record devoid of any basis to conclude that its admission was legally erroneous.

While the Court declined to impose a categorical bar to representative evidence, it concluded that whether such evidence could be used was a case-by-case decision, acknowledging that the “fairness and utility of statistical methods” in other cases “will depend on the facts and circumstances particular to those cases.”

The Court did not address the second issue posed by Tyson—whether certification was proper of a class that contained members who were not injured—because disbursement of the award has not yet been addressed and is thus an issue for the District Court on remand.  The majority did indicate that, had it reached the issue, it may have found any alleged error to have been invited by Tyson because Tyson opposed Plaintiffs’ proposal to bifurcate the proceedings to remove uninjured individuals from the class before an award was rendered.

Whether Tyson foreshadows an overall shift in the Court’s attitude toward class-action certification remains to be seen.  Tyson’s language indicates the decision is limited.  The decision itself articulates a more clearly defined predominance analysis and highlights important factors to consider in the future, such as whether a business should maintain adequate records of statutorily required information or whether to implement uniform policies.  It also alerts litigators to the importance of raising a Daubert challenge or considering whether challenging a plaintiff’s proposal to restructure the proceedings is favorable in the long term.

*Note:  Shook, Hardy & Bacon filed an amicus curiae brief in support of Tyson on behalf of the National Association of Manufacturers, Alliance of Automobile Manufacturers, Association of Home Appliance Manufacturers, American Tort Reform Association, American Petroleum Institute, and Metals Service Center Institute.

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