Statistical proof in FLSA classes

This week, in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, in a 6-2 decision, the United States Supreme Court approved the district court's consideration of statistical averaging of employee donning and doffing time in its FLSA class certification ruling.  In general, employers hoped that the Supreme Court would preclude the use of such representative evidence to establish the employees' claims.  Although the Supreme Court did not establish such a preclusion and, indeed, approved of the use of representative evidence in this case, the decision discusses several limiting factors that defense lawyers will no doubt contend inhibits its applicability to other cases, especially outside the FLSA context.

The facts and District Court judgment after trial

The employees worked in a pork processing plant in Iowa.  The employer required them to wear protective gear, but the gear to be worn depended on work being done.  The employer did not record the "donning and doffing" time for all employees, meaning the time spent putting on and taking off the protective gear.  The employer paid some but not all employees for up to eight minutes of time for donning and doffing; some employees were compensated only for the time spent at their work stations.  The employees brought suit arguing that their donning and doffing time was "integral and indispensable" to their work, requiring that they be compensated for this activity under the Fair Labor Standards Act (FLSA).  See Steiner v. Mitchell, 350 U.S. 247, 255 (1956) (FLSA requires payment for activities "integral and indispensable" to employee's regular work).  Because the employer failed to record each employee's donning and doffing time, the employees introduced "representative evidence" including employee testimony, donning and doffing videos, and a study in which an industrial expert gave a statistical average of the time spent donning and doffing protective gear in two different departments.  Contending a class should not be certified, the employer argued, among other things, that the variance in the protective gear worn made the employees' claims not sufficiently similar for classwide resolution.  The district court rejected the employer's contention, finding that if it limited the class to employees who were only paid for "gang time," meaning time spent at their work stations, "there are more factual similarities than dissimilarities."  564 F. Supp.2d 870, 899-900 (N.D. Iowa 2008).  After certification of such a class, the case ultimately proceeded to trial.

At trial, the employees presented statistical evidence of the average time it took to don and doff protective gear in two different departments, based on the expert's review and analysis of 744 videotaped observations of such activity.  The employer did not rebut this evidence with another expert's testimony, but rather argued the employees' expert overstated the averages and that the varying times it took to don and doff the protective gear made classwide recovery speculative.  The jury found the donning and doffing time to be compensable and awarded damages.  Unsuccessful post-trial motions followed, and the employer appealed.

The Eighth Circuit decision

On appeal, the Eighth Circuit affirmed the district court award and judgment.  The Eighth Circuit's majority opinion held that the jury could draw "a 'reasonable inference' of classwide liability" from the representative proof.  765 F.3d 791, 799 (8th Cir. 2014) (citation omitted).

The Supreme Court decision

The employer petitioned the Supreme Court to review the case, and review was granted.  The Supreme Court (including deceased Justice Scalia) heard oral argument on November 10, 2015.  On March 22, 2016, the Supreme Court issued its affirmance and held that the district court did not err in certifying and maintaining the class.

Justice Kennedy authored the Supreme Court's majority opinion, in which Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan joined.  The majority declined to establish broad, categorical rules governing when representative and statistical evidence may be used to establish classwide liability and firmly stated that "[a] categorical exclusion of [representative evidence] would make little sense."  It noted that "[a] representative or statistical sample, like all evidence, is a means to establish or defend against liability."  As for "whether and when" such evidence is permissible to establish class liability, the majority said that will depend on the underlying claim elements, the purpose for the evidence's introduction, and its reliability.  Rejecting the contention that Supreme Court precedent stands for the premise that a representative sample is never a permissible means to establish classwide liability, the majority stated that "[i]n a case where representative evidence is relevant in proving a plaintiff's individual claim, that evidence cannot be deemed improper merely because the claim is brought on behalf of a class."  The majority also noted that individual evidence was not available to the class members in the case, because the employer had failed to maintain proper records.

Writing for the dissent in which Justice Alito joined, Justice Thomas commented that the Supreme Court's "precedents generally prohibit plaintiffs from maintaining a class action when an important element of liability depends on facts that vary among individual class members."  Noting that the issue in this case is "whether and when" that general rule may be overcome by the use of representative evidence, the dissent stated that, before permitting use of representative evidence, the district court was required but failed to "undertake a rigorous analysis to ensure that such evidence is sufficiently probative of the individual issue to make it susceptible to classwide proof."  The dissent even found that the employees' expert evidence actually "confirmed the inappropriateness of class treatment." 

Implications and future fights

Under the FLSA, the employer must "make, keep, and preserve . . . records of the persons employed . . . and of the wages, hours , and other conditions and practices of employment."  29 U.S.C. § 211(c).  When the employer fails to keep accurate time records, the employer faces liability exposure not just on an individual basis, but potentially on some classwide basis.  With the Supreme Court's decision in Tyson Foods, the evidentiary gap in recordkeeping in FLSA collective actions may ultimately be filled with the employees' representative evidence.  Whether and when the lower courts will permit that to happen remains to be seen. 

The case also emphasizes the necessary connection between acceptable classwide proof and proof of individual claims.  Tyson Foods does not permit class plaintiffs to take a shortcut to establishing liability or damages that would not be permissible for an individual's claim.

The Court's emphasis on the unique facts of the case may ultimately result in the decision having only a limited impact on the outcome of most class certification decisions.  Time will tell.  But, for now, one should anticipate significant future fights about the permissibility of representative evidence to raise many arguments, including the individuality of the issue, the lack of susceptibility to common proof, and the absence of reliability of the statistical sample or other representative evidence.