A NEW METHOD OF PROVING CLASS ACTION LIABILITY AND DAMAGES?
On 22 March 2016, the Supreme Court issued a decision that is likely to have a significant effect on class action litigation and particularly the impact such litigation has on companies’ bottom lines. In Tyson Foods, Inc. vs. Bouaphakeo et al., the Supreme Court affirmed a $5.8m judgment against the food processing giant in a class action relating to uncompensated time spent donning and doffing required gear.
While dealing with a rather discrete factual issue, the Court’s ruling allowing statistical evidence as a proxy for damages is likely to have far-reaching effects. This article: (i) reviews the facts of Tyson Foods, Inc. vs. Bouaphakeo et al. and the Supreme Court’s holding; and (ii) discusses the implications of Tyson Foods while providing guidance on the lessons all companies can learn from the case.
The facts giving rise to the 2007 lawsuit are interesting. The putative class was comprised of Tyson Foods employees who worked in the kill, cut and retrim departments of a pork processing plant in Iowa. The employees’ particular work activities required them to wear protective gear, but depending on an employee’s task for any given day, the exact composition of the gear would vary. Tyson Foods compensated some, but not all, employees for the donning and doffing of the required gear. The company, however, did not record the time each employee spent on those activities.
The employees filed suit against Tyson Foods alleging Tyson Foods’ policy of not paying employees for the time spent putting on and removing required gear ran afoul of Iowa wage and compensation law and the Fair Labor Standards Act’s requirements relating to overtime compensation. The employees sought certification of their state claims as a class action under Federal Rule of Civil Procedure 23 and certification of their FLSA claims as a “collective action”.
Jul-Sep 2016 issue
Alston & Bird LLP