Supreme Court hears class action dispute

Supreme Court hears class action dispute
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The Supreme Court seemed skeptical Tuesday of setting new limits on class action lawsuits in a labor case involving Tyson Foods Inc. 

 

The case centers on a $5.8 million judgment Tyson Foods was ordered to pay in a class-action lawsuit that began in 2007 when six employees of its pork-processing facility in Storm Lake, Iowa, accused the company of violating federal and state labor laws.

 

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In asking the court to decide if a class can be certified if it includes hundreds of members who were not injured and have no legal right to any damages, Tyson’s attorney argued that not all employees in the class suffered the same.

 

Justice Anthony Kennedy said he couldn’t understand the company's argument. 

 

Kennedy reminded Tyson's attorney Carter Phillips that the company had the opportunity to divide the trial into two parts: liability and damages. “You were the one who objected to a bifurcated trial,” he said. 

 

Over 3,000 current and former employees were named in the suit brought against the company for failing to pay employees overtime for putting on personal protective equipment and taking it off.

 

Tyson calculated paid working hours by what it called “gang time,” when the employees are at their working station and the production line is moving, but added four to eight minutes of K-code time, or hours worked per day to employees who worked with knives as a way to compensate those workers for putting on and taking off the protective gear they were required to wear.

 

Because Tyson Foods failed to keep record of how long it took employees to put on and take off equipment, the employees had a study done that showed it took employees an average of 18 to 21 minutes, depending on the department, to dress, undress and walk to their workstations.

Justice Sonia Sotomayor pointed out that to calculate K-code time, Tyson Foods used the same methodology the employee’s experts had used to calculate overtime.

"Mr. Phillips, I am completely at a loss as to what you are complaining about,” she said. “I mean, as far as I could tell, between your expert that you used to calculate ‘gang time’ and ‘K-time’ did exactly the same thing this expert did. You came out with a lower number, but you used fewer people.”

But Phillips said not all employees named in the class action suit had worked over the 40 hours that entitles them to overtime under the Fair Standards Labor Act, a burden he argued they needed to prove in order to use the statistical data.

The justices questioned if there is another opportunity for Tyson Foods to argue that not all employees are entitled to the same amount. 

“Aren’t there further proceedings in this case?” Kennedy asked.

Though Phillips said Tyson Foods was ordered pay a lump sum, Justice Elena Kagan said that lump sum still has to be distributed.

“It’s far from clear if the trial court has any intention to do anything with this other than to accept the check,” Phillips said.

 

The justices, went on to question why the jury awarded the employees less than half of the damages they had asked for at trial.

"The fact that the jury did not give you the damages sought seems to me to call into question the significance of the statistics," Chief Justice John Roberts said.

That line of questioning seemed to be a positive for Tyson Foods, which argued that the data used to determine overtime pay could only be determined on an individualized basis because different employees wear different gear.

“They saw the donning and doffing of the sanitary gear and the protective gear,” Roberts said. “Couldn't they have made judgments based on those actual differences to reject some of the representative statistics?

Arguing on behalf of the government in favor of the employees, Elizabeth Prelogar explained that the jury was instructed at the request of Tyson Foods to look at the evidence as a whole in determining if the class it entitled to relief.

“I think that there was an ample evidentiary basis here for the jury to conclude that there weren't substantial — substantial dissimilarity among the tasks that were being performed in these donning and doffing activities,” she said.