The Tyson Foods Ruling

To fully understand the impact of Bouaphakeo, it is important to contextualize the decision and situate it within the Court's overall jurisprudence on the use of representative evidence in the class context.

The first instructive case in this regard is Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946). There, plaintiffs alleged violations of the Fair Labor Standards Act (FLSA) resulting from the defendant's purported failure to compensate them for all hours worked. Specifically, the plaintiffs alleged that the defendant's compensation system was inadequate because it rounded the time they worked to the preceding 15-minute marker and because it did not account for the time they spent punching in and out, or walking to their stations. To demonstrate liability and damages on a class-wide basis, the plaintiffs relied on a specific time-keeping scenario that maximized the amount of uncompensated time. The plaintiffs adduced evidence showing their time-keeping scenario had actually occurred, but the evidence was limited to a few class members. For the remaining members, the time-keeping scenario at the heart of the plaintiffs' case remained a plausible but untested hypothetical. Nevertheless, the plaintiffs argued that their time-keeping scenario was equally applicable to each putative class member and accurately provided the average amount of uncompensated time.

Finding that the plaintiffs could rely on such representative evidence, the Supreme Court relied quite heavily on the fact that the defendant had kept very poor time records. For this reason, said the Court, the defendant could not complain that the plaintiffs' estimate of uncompensated work was inaccurate. Giving credence to the defendant's objections, the Court further noted, would essentially reward the defendant for its poor record-keeping and create perverse incentives for employers to keep inadequate records.

The second notable case is Dukes v. Wal-Mart, 564 U.S. 338 (2011). Here, the plaintiffs alleged that Wal-Mart (defendant) had a pattern-or-practice of discriminating on the basis of gender. According to the plaintiffs, Wal-Mart's discriminatory practice affected tens of thousands of employees holding various roles throughout the entire nation, and the plaintiffs moved to certify a class of approximately 9,541 total members. To support their bid for certification, the plaintiffs put forth three types of evidence: 1) statistical evidence about pay and promotion disparities between men and woman; 2) anecdotal reports of discrimination from 120 employees; and 3) the testimony of an expert who conducted a “social framework analysis” of Wal-Mart's work culture. To determine liability and damages, the plaintiffs proposed randomly selecting 137 claims (out of the 9,541), referring those claims to a special master for valuation, and then “extrapolating the validity of the untested claims from the sample set.”

Writing for the five-member majority, Justice Scalia took direct aim at the plaintiffs' proof, finding that it was wholly insufficient to even satisfy the lax commonality standard under Rule 23(a). First, Scalia found that the plaintiffs' expert could not determine with any specificity how Wal-Mart's purportedly discriminatory corporate culture played a meaningful role in any employment decisions.

According to Scalia, this was fatal to the expert's testimony because “whether .5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking is the essential question on which [the plaintiffs'] theory of commonality depends.” Second, Scalia found that the plaintiffs' statistical analyses of employment outcomes were “insufficient to establish that [their] theory can be proved on a class-wide basis” because they could not support the inference that one employee's experience of discrimination was typical of the employer's practices. In particular, he noted that information about disparities at the regional and national level does not establish the existence of disparities at individual stores, let alone raise the inference that a company-wide policy of discrimination is implemented by discretionary decisions at the store and district level, as the plaintiffs claimed. Third, Scalia found that the plaintiffs' anecdotal evidence was insufficient because it consisted of only 120 affidavits reporting incidents of discrimination ' about one for every 12,500 class members. Moreover, those affidavits were concentrated in only six states. Thus, once again, the plaintiffs' evidence could not support the inference that a small group's experience of discrimination was typical of the other employees' experience.

Critically, Scalia then broadened his attack on the use of representative evidence in Rule 23 class cases. Specifically, he explained that courts could not certify a class if doing so required a “trial by formula.” For example, certification would be wholly improper if:

A sample set of class members would be selected, as to whom liability for sex discrimination and the backpay owing as a result would be determined [individually]. The percentage of claims determined to be valid would then be applied to the entire remaining class, and the number of (presumptively) valid claims thus derived would be multiplied by the average backpay award in the sample set to arrive at the entire class recovery ' without further individualized proceedings.

Scalia reasoned that using representative evidence in this manner impermissibly deprived the defendants of their right to present individualized defenses.

Difficult Questions

Since Dukes, employers have rightly seized on Scalia's reasoning, conclusion and broad language to challenge plaintiffs' use of representative evidence. But Anderson, Dukes and the relationship between the two cases raised a number of difficult questions. The most fundamental question was how broadly courts were supposed to apply Scalia's admonition against “trials by formula.” If, as Scalia's reasoning and language both suggest, representative evidence is anathema to class cases, then what is left of Anderson? Should Anderson's holding be applicable only to cases where defendants keep inadequate employment records? On the other hand, if Dukes' skepticism of representative evidence is to be interpreted narrowly, then what test guides courts on when such evidence is proper?

Bouaphakeo Case Analysis

The plaintiffs in this case were Tyson Foods employees working in its kill, cut, and retrim departments, where hogs are slaughtered and prepared for shipment. On each shift, prior to arriving at their workstations, plaintiffs were required to put on personal protective equipment. Similarly, after leaving their workstations at the end of each shift, plaintiffs were required to take off their protective gear. The plaintiffs alleged that Tyson compensated them, as it did the majority of its plant employees, based on the amount of time they spent at their workstations only. A small minority of employees, by contrast, was automatically compensated at the regular rate of pay for a small amount of time beyond that spent at the workstations (typically between four and eight minutes). “At no point did Tyson record the time each employee spent donning and doffing.”

Based on the foregoing, the plaintiffs asserted causes of action under the FLSA and the Iowa Wage Payment Collection Law. In particular, they contended that Tyson's compensation and time-keeping systems impermissibly denied them overtime pay for time worked over 40 hours each week. The plaintiffs brought these claims individually and on behalf of all other similarly situated individuals under Rule 23 and the FLSA (a “hybrid” action).

At the certification stage, the plaintiffs argued that “[a]s a result of Tyson's failure to keep records of donning and doffing time,” they were “forced to rely on” representative evidence. This evidence included employee testimony, video recordings of donning and doffing at the plant, and an expert report. In his report, the plaintiffs' expert concluded that donning and doffing took about 18 minutes per day for employees in the cut and retrim departments and 21.25 minutes each day for those in the kill department. These two averages were based on a total of 744 videotaped donning and doffing observations.

Opposing certification, Tyson made two central arguments. First, it contended that plaintiffs could not rely on their expert's averages because, in reality, the amount of time it takes an employee to don and doff her or his equipment varies too greatly. In other words, Tyson challenged the class-wide applicability of the plaintiffs' representative evidence. Second, it argued that some class members had not worked more than 40 hours in a week inclusive of any applicable donning and doffing time, which meant those class members were not entitled to overtime pay.

Rejecting Tyson's contentions, the trial court certified the class and the case was tried to a jury. The jury rendered its verdict against Tyson and the trial court refused to set it aside. Tyson then appealed to the U.S. Court of Appeals for the Eighth Circuit. Relying in part on Anderson , the Eighth Circuit affirmed the trial court's rulings and found that the plaintiffs' reliance on representative evidence did not contravene the mandate of Rule 23. On a writ of certiorari, Tyson asked the Supreme Court to weigh in on two questions: First, whether the plaintiffs' representative evidence, in particular, their expert's averages, were consistent with Rule 23 standards; and second, whether the plaintiffs were required to identify the uninjured class members prior to judgment and ensure that they cannot contribute to the size of any damage award, or recover such damages.

The Representative Evidence Question

Writing for a six-member majority (and after the death of Justice Scalia), Justice Kennedy rejected Tyson's argument that the Court should adopt an expansive view of Dukes and “announce a broad rule against the use in class actions of ' representative evidence.” He reasoned that such a rule was unnecessary because the permissibility of representative evidence “turns not on the form a proceeding takes ' but on the degree to which the evidence is reliable on proving or disproving the elements of the relevant cause of action.” Otherwise stated, representative evidence may very well serve to prove or disprove the facts involved in an individual case. As such, the plaintiffs' reliance on representative proof did not automatically and without more abridge Tyson's right to raise individualized issues.

Justice Kennedy then articulated a helpful, albeit somewhat vague, standard to determine when representative evidence does not violate the mandate of Rule 23; namely, when plaintiffs show that “each class member could have relied on that sample to establish liability if he or she had brought an individual action.” Applying this standard to the facts before it, Justice Kennedy found that “[i]f the employees had proceeded with 3,344 individual lawsuits, each employee likely would have had to introduce [the same expert report provided by plaintiffs' expert] to prove the hours he or she worked.”

Notably, Justice Kennedy also made much of the logic first articulated in Anderson, repeatedly noting that, without representative evidence, the absence of proper records would essentially foreclose the plaintiffs' ability to prove their case. Just like the Anderson decision, Justice Kennedy concluded that fact militated heavily in favor of allowing the plaintiffs to use representative evidence

The Court's ruling on this question is meaningful primarily because it represents a clear step back from Dukes' broad admonition against using representative evidence in class-action cases. Nevertheless, the ruling is not entirely favorable to plaintiffs, and leaves defendants with several tools available to challenge representative evidence. In particular, the key for defendants going forward will be to show that the representative evidence is inapplicable for at least a meaningful portion of the putative class. This course of action accords with Justice Kennedy's discussion of Dukes and his attempt to reconcile that decision with Anderson. Unlike the plaintiffs in Anderson and Bouaphakeo, the plaintiffs in Dukes “were not similarly situated [and, as such,] none of them could have prevailed in an individual suit by relying” on the representative evidence there presented.

Significantly, though, in situations where defendants have kept poor records or evidence is otherwise absent, they should refrain from attacking the viability of plaintiffs' representative evidence in general. According to Justice Kennedy, this line of argument will simply create a situation where “the concern about the proposed class is not that it exhibits some fatal dissimilarity but, rather, a fatal similarity.” In other words, an attack on representative evidence generally may serve to create a common, class-wide determination about the validity of that evidence.

Uninjured Class Members

The majority declined to consider how the known presence of uninjured class members affects the class-certification process and/or the burdens imposed on plaintiffs at that stage. It did so because the question had “not yet been fairly presented by this case.”

In his concurring opinion, however, Chief Justice Roberts previewed some key arguments in this future battle. Specifically, he noted that “Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not ' Therefore, if there is no way to ensure that the jury's damages award goes only to injured class members, that award cannot stand.”

Conclusion

Defendants would thus do well to raise these arguments when they challenge certification. In particular, it may prove very beneficial to argue that an individualized inquiry is necessary to ensure that uninjured class members are not afforded a windfall. This may prove to be a powerful tool in defeating predominance.

Pablo Orozco is a labor & employment attorney with Nilan Johnson Lewis in Minneapolis. He can be reached at [email protected] or 612-305-7729.