Tyson Foods, Inc. v. Bouaphakeo

• Citation: 136 S.Ct. 1036,577 U.S. 442,194 L.Ed.2d 124
• Decision Date: 22 March 2016
• Docket Number: No. 14–1146.,14–1146.
• Parties: TYSON FOODS, INC., Petitioner v. Peg BOUAPHAKEO, et al., individually and on behalf of all others similarly situated.
• Court: United States Supreme Court

577 U.S. 442

136 S.Ct. 1036

194 L.Ed.2d 124

TYSON FOODS, INC., Petitioner

v.Peg BOUAPHAKEO, et al., individually and on behalf of all others similarly situated.

No. 14–1146.

Supreme Court of the United States

Argued Nov. 10, 2015.

Decided March 22, 2016.

Carter G. Phillips, Washington, DC, for Petitioner.

David C. Frederick, Washington, DC, for Respondents.

Elizabeth B. Prelogar, for the United States as amicus curiae, by special leave of the Court, supporting the respondents.

Robert L. Wiggins, Jr., Wiggins, Childs, Quinn, & Pantazis, LLC, Birmingham, AL, Scott Michelman, Counsel of Record, Scott L. Nelson, Public Citizen, Litigation Group, Washington, DC, for Respondents.

Michael J. Mueller, Emily Burkhardt, Vicente, Evangeline C. Paschal, Hunton & Williams, Washington, DC, Carter G. Phillips, Joseph R. Guerra, C. Frederick Beckner III, Kathleen Moriarty, Mueller, Christopher A. Eiswerth, Sidley Austin LLP, Washington, DC, for Petitioner.

David C. Frederick, Derek T. Ho, Matthew A. Seligman, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, Robert L. Wiggins, Jr., Wiggins, Childs, Pantazis, Fisher & Goldfarb, LLC, Birmingham, AL, Scott Michelman, Scott L. Nelson, Allison M. Zieve, Public Citizen, Litigation Group, Washington, DC, Eric Schnapper, Univ. of Washington, School of Law, Seattle, WA, for Respondents.

Justice KENNEDY delivered the opinion of the Court.

Following a jury trial, a class of employees recovered $2.9 million in compensatory damages from their employer for a violation of the Fair Labor Standards Act of 1938 (FLSA), 52 Stat. 1060, as amended, 29 U.S.C. § 201 et seq . The employees' primary grievance was that they did not receive statutorily mandated overtime pay for time spent donning and doffing protective equipment.

The employer seeks to reverse the judgment. It makes two arguments. Both relate to whether it was proper to permit the employees to pursue their claims as a class. First, the employer argues the class should not have been certified because the primary method of proving injury assumed each employee spent the same time donning and doffing protective gear, even though differences in the composition of that gear may have meant that, in fact, employees took different amounts of time to don and doff. Second, the employer argues certification was improper because the damages awarded to the class may be distributed to some persons who did not work any uncompensated overtime.

The Court of Appeals for the Eighth Circuit concluded there was no error in the District Court's decision to certify and maintain the class. This Court granted certiorari. 576 U.S. ––––, 135 S.Ct. 2806, 192 L.Ed.2d 846 (2015).

I

Respondents are employees at petitioner Tyson Foods' pork processing plant in Storm Lake, Iowa. They work in the plant's kill, cut, and retrim departments, where hogs are slaughtered, trimmed, and prepared for shipment. Grueling and dangerous, the work requires employees to wear certain protective gear. The exact composition of the gear depends on the tasks a worker performs on a given day.

Until 1998, employees at the plant were paid under a system called "gang-time." This compensated them only for time spent at their workstations, not for the time required to put on and take off their protective gear. In response to a federal-court injunction, and a Department of Labor suit to enforce that injunction, Tyson in 1998 began to pay all its employees for an additional four minutes a day for what it called "K-code time." The 4–minute period was the amount of time Tyson estimated employees needed to don and doff their gear. In 2007, Tyson stopped paying K-code time uniformly to all employees. Instead, it compensated some employees for between four and eight minutes but paid others nothing beyond their gang-time wages. At no point did Tyson record the time each employee spent donning and doffing.

Unsatisfied by these changes, respondents filed suit in the United States District Court for the Northern District of Iowa, alleging violations of the FLSA. The FLSA requires that a covered employee who works more than 40 hours a week receive compensation for excess time worked "at a rate not less than one and one-half times the regular rate at which he is employed." 29 U.S.C. § 207(a). In 1947, nine years after the FLSA was first enacted, Congress passed the Portal–to–Portal Act, which clarified that compensable work does not include time spent walking to and from the employee's workstation or other "preliminary or postliminary activities." § 254(d). The FLSA, however, still requires employers to pay employees for activities "integral and indispensable" to their regular work, even if those activities do not occur at the employee's workstation. Steiner v. Mitchell, 350 U.S. 247, 249, 255, 76 S.Ct. 330, 100 L.Ed. 267 (1956). The FLSA also requires an employer to "make, keep, and preserve ... records of the persons employed by him and of the wages, hours, and other conditions and practices of employment." § 211(c).

In their complaint, respondents alleged that donning and doffing protective gear were integral and indispensable to their hazardous work and that petitioner's policy not to pay for those activities denied them overtime compensation required by the FLSA. Respondents also raised a claim under the Iowa Wage Payment Collection Law. This statute provides for recovery under state law when an employer fails to pay its employees "all wages due," which includes FLSA-mandated overtime. Iowa Code § 91A.3 (2013); cf. Anthony v. State, 632 N.W.2d 897, 901–902 (Iowa 2001).

Respondents sought certification of their Iowa law claims as a class action under Rule 23 of the Federal Rules of Civil Procedure. Rule 23 permits one or more individuals to sue as "representative parties on behalf of all members" of a class if certain preconditions are met. Fed. Rule Civ. Proc. 23(a). Respondents also sought certification of their federal claims as a "collective action" under 29 U.S.C. § 216. Section 216 is a provision of the FLSA that permits employees to sue on behalf of "themselves and other employees similarly situated." § 216(b).

Tyson objected to the certification of both classes on the same ground. It contended that, because of the variance in protective gear each employee wore, the employees' claims were not sufficiently similar to be resolved on a classwide basis. The District Court rejected that position. It concluded there were common questions susceptible to classwide resolution, such as "whether the donning and doffing of [protective gear] is considered work under the FLSA, whether such work is integral and [in]dispensable, and whether any compensable work is de minim[i]s ."

564 F.Supp.2d 870, 899 (N.D.Iowa 2008). The District Court acknowledged that the workers did not all wear the same protective gear, but found that "when the putative plaintiffs are limited to those that are paid via a gang time system, there are far more factual similarities than dissimilarities." Id., at 899–900. As a result, the District Court certified the following classes:

"All current and former employees of Tyson's Storm Lake, Iowa, processing facility who have been employed at any time from February 7, 2004 [in the case of the FLSA collective action and February 7, 2005, in the case of the state-law class action], to the present, and who are or were paid under a ‘gang time’ compensation system in the Kill, Cut, or Retrim departments." Id ., at 901.

The only difference in definition between the classes was the date at which the class period began. The size of the class certified under Rule 23, however, was larger than that certified under § 216. This is because, while a class under Rule 23 includes all unnamed members who fall within the class definition, the "sole consequence of conditional certification [under § 216 ] is the sending of court-approved written notice to employees ... who in turn become parties to a collective action only by filing written consent with the court." Genesis Healthcare Corp. v. Symczyk, 569 U.S. ––––, ––––, 133 S.Ct. 1523, 1530, 185 L.Ed.2d 636 (2013). A total of 444 employees joined the collective action, while the Rule 23 class contained 3,344 members.

The case proceeded to trial before a jury. The parties stipulated that the employees were entitled to be paid for donning and doffing of certain equipment worn to protect from knife cuts. The jury was left to determine whether the time spent donning and doffing other protective equipment was compensable; whether Tyson was required to pay for donning and doffing during meal breaks; and the total amount of time spent on work that was not compensated under Tyson's gang-time system.

Since the employees' claims relate only to overtime, each employee had to show he or she worked more than 40 hours a week, inclusive of time spent donning and doffing, in order to recover. As a result of Tyson's failure to keep records of donning and doffing time, however, the employees were forced to rely on what the parties describe as "representative evidence." This evidence included employee testimony, video recordings of donning and doffing at the plant, and, most important, a study performed by an industrial relations expert, Dr. Kenneth Mericle. Mericle conducted 744 videotaped observations and analyzed how long various donning and doffing activities took. He then averaged the time taken in the observations to produce an estimate of 18 minutes a day for the cut and retrim departments and 21.25 minutes for the kill department.

Although it had not kept records for time spent donning and doffing, Tyson had information regarding each employee's gang-time and K-code time. Using this data, the employees' other expert, Dr. Liesl Fox, was able to estimate the amount of uncompensated work each employee did by adding Mericle's estimated average donning and doffing time to the gang-time each employee worked and then subtracting any K-code time. For example, if an employee in the...