On Tuesday, March 22, 2016, the United States Supreme Court affirmed a $5.8 million dollar judgmentagainst Tyson Foods Inc. in a class and collective action filed by workers claiming uncompensated time donning and doffing time. Contrary to what many predicated given the trend in class action rulings, the Court upheld the workers reliance on statistical analysis that used average time estimates to determine overtime owed for class recovery.
Background
In September 2011, a federal jury in Iowa found that the Tyson employees proved that the time spent donning and doffing equipment was an indispensable part of their work. The workers’ expert averaged the time it took to complete the donning and doffing activities and then used those estimates to prove class liability and damages. Ultimately, the jury awarded the workers $2.9 million in damages, with a liquidated damages award increasing the final judgment to $5.8 million. That judgment was upheld on appeal by a divided Eighth Circuit in August 2014.
Tyson petitioned the Supreme Court for review arguing that the appellate court’s rulings conflicted with other circuits and recent Supreme Court precedent disallowing the use of formulas to establish class liability and damages. Tyson further argued that the varying amounts of time it took these employees’ to don and doff equipment made the reliance on the expert’s estimates improper and would lead to the payment of damages to those who did not actually work more than 40 hours in a week. Tyson’s petition was granted and oral argument was held this past fall.
The Supreme Court’s Ruling
Although the Supreme Court upheld the judgment, writing for the majority, Justice Kennedy cautioned that the Court was not adopting a broad rule governing the use of representative and statistical evidence to establish class-wide liability. Instead, this was a case where reliance on statistical analysis was found to be permissible in order to fill an evidentiary gap created by Tyson’s failure to maintain adequate records. The Court further reasoned that the fact this was a class claim did not make their reliance on the sample estimates improper for establishing class-wide liability, particularly since each employee would likely have used the analysis to prove their individual hours worked if they had brought separate claims. However, future use of statistical methods to establish class-wide liability will depend on the facts and circumstances of those particular cases.
The majority punted on Tyson’s claim that relying on statistical analysis would result in uninjured class members recovering damages, stating the issue was premature since the damages had yet to be allocated to class members and Tyson would have the opportunity to challenge the proposed method of allocation when the case returns to the trial court. That being said, Chief Justice Roberts, in his concurrence, expressed concern as to whether there is a method that would award damages only to those who suffered actual injury. Justice Roberts went on to state that if there is no way to ensure that only injured class members receive an award, the award cannot stand.
Unfortunately, the Court declined to use this opportunity to restrict the use of statistical evidence in employment claims. While this is a bit of departure from the Court’s recent employer-sided opinions, it remains to be seen how broadly this will be interpreted by the lower courts under various individual case scenarios. Certainly, the use of statistical evidence will continue to be an issue going forward in class litigation.
We will continue to follow this case and keep you up-to-date on the how the damages are allocated at the district court.
