US Supreme Court Affirms Class Certification and Award of Overtime Pay in Tyson Case

I said last week that we would say goodbye to the FLSA re-visit some NLRB issues–and we will. But when I wrote that post the US Supreme Court had not published its decision in Tyson v. Bouaphakeo 577 US ____ (2016). That’s the class action lawsuit brought by workers not compensated for time spent donning and doffing protective gear. Wait. Hasn’t the Supreme Court already ruled that time spent donning and doffing is compensable? And didn’t it also decide a makes it harder for employees to sue as a class in Wal-Mart Inc v Dukes? Arguably yes.  So what makes this case so important? We’ll find out after the jump…

(image from slate.com)

To really understand this case, we need to look at three prior SCOTUS cases.  In IBP, Inc v Alvarez 546 US 21 (2005), the court ruled that time donning and doffing required safety gear that is integral and indispensable to  principal activities of one’s job is compensable. The Court reached the opposite conclusion in Sandifer v US Steel 134 S. Ct. 870, 187 L. Ed. 2d 729, 21 WH cases 1477, 82 U.S.L.W. 4071 (2014) [2014 BL 20038] . How? Section 203(o) of the FLSA allows unions to collectively bargain over whether time spent changing clothes will be compensable. The Court found that a provision in the parties’ collective bargaining agreement determined that such time would not be compensable. This ruling was actually a very narrow one, confined to specific facts and one specific provision under the FLSA.

The third case?  That would be Wal-Mart, Inc v Dukes et al 564 US 338, which appeared to significantly limit class action lawsuits by employees. Wait.  Tyson was a class action lawsuit. So what gives? Dukes was a Title VII sex discrimination case by employees in different positions in different locations. The Dukes plaintiffs could not identify a single policy under which each employee presumably suffered discrimination or enough other common issues to justify class certification. Class actions can only proceed if there is sufficient commonality among the entire class.  For those reasons, the SCOTUS had no trouble finding Dukes inapplicable to this case.

Now SCOTUS previously ruled that donning and doffing time is compensable.  Why wouldn’t the employees in this case have a slam-dunk, then? Donning and doffing time may be compensable if the clothing or gear in question is essential to the performance of one’s job functions and the time spent has to be more than de minimus, i.e. it can’t be negligible.

Let’s look at Tyson’s specific facts: The employees were hourly workers in the kill, cut and retrim departments of Tyson’s pork processing plant in Iowa. Their work required wearing protective gear, the exact composition of which depends on the tasks performed, and donning and doffing time varied slightly depending on the specific gear required for the task at hand.  Tyson compensated some, but not all, employees for the donning and doffing time, and discontinued one of its policies that compensated for some of that time.  The employee sued under the federal FLSA and under Iowa wage law for the uncompensated donning and doffing time, which would have entitled many of them to overtime pay. The employees sought certification of their state claims as a class action and certification of their federal claim as a collective action (since the Court did not feel it necessary to discuss the subtle differences between class and collective actions I won’t bore you with that here.) Since Tyson failed to keep records of these employees’ donning and doffing time, the employees introduced a study by an industrial relations expert that included a videotape and analysis of how long the donning and doffing took and averaged the time, resulting in an  average of 18 minutes a day for the cut and retrim departments and 21.25 for the kill department. The employees added these estimates to their time sheets to determine who worked more than 40 hours in a given week (and therefore was entitled to overtime) and to determine the value of classwide recovery.

Tyson opposed class certification. Without class certification, the plaintiffs would each have to sue individually. Tyson argued that the variances in gear and the donning and doffing time rendered factual questions so dissimilar as to preclude efficient litigation as a class, and to render reliance on the study and its averages was improper. Tyson further argued that using the study might lead employees who did not actually work overtime to recover. The District Court  and the jury were not persuaded. (The jury awarded the employees $2.9 million.) Neither was the Circuit Court of Appeals. Neither was the Supreme Court.

Not only did this case raise the question of whether certifying an maintaining the class was proper under these circumstances, but also whether relying on the statistical evidence presented was proper. The Supreme Court answered “yes” to both. The court reasoned that if each employee in an individual lawsuit could have used the representative sample offered to recover overtime pay, then this class of employees could also do so.

So what are the takeaway’s for employers? First, re-visit your compensation, and overtime policies. If any of your employees spend time in pre and postliminary activities, such as donning and doffing, consult with employment counsel or some other type of expert to determine if those or other activities are integral to the principal activities of the job. If yes, track and keep good records of the time those employees spend in those activities and pay them for that time. If that time results in overtime in any given week, pay them the overtime. Yes, that may sound and feel perfectly painful, but it can’t be as painful as what Tyson just experienced. Remember, when employees can show entitlement to even one penny of overtime, their attorneys will be entitled to fees based on the time they spent on the case. That’s in addition to the time and a half for overtime. You also will be on the hook for liquidated damages in the same amount as the overtime. In other words, employees are effectively entitled to double the amount of overtime if they sue and win. Oh and then there’s your legal fees. You see how that could be more costly than just paying the overtime, right?

So, as I was writing this post, the Supreme Court handed down another decision. We’ll save that discussion for next week.

Disclaimer: Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.

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