The Supreme Court is poised to weigh new limits on class action lawsuits, on Monday taking up the appeal of a $5.8 million judgment against Tyson Foods Inc.
Tyson was ordered to pay $5.8 million to employees in a class action lawsuit for violating federal and state labor laws.
{mosads}The case began in 2007, when six employees of Tyson’s meat-processing facility in Storm Lake, Iowa sued the company for failing to pay employees overtime for putting on personal protective equipment and taking it off. The case included more than 3,000 current and former employees.
Tyson calculated paid working hours by what it called “gang time” — when the employee is at their working station and the production line is moving, according to court documents.
Before 2007, court records show that Tyson added four minutes of K-code time per day to the paychecks of employees who worked in a department where knives were used. K-code time was the company’s way to compensate workers for putting on and taking off unique items. But a study showed that it took employees an average of 18 minutes in the fabrication department and 21 minutes in the kill department to not only put on and take off equipment, but walk to their stations.
The employees claimed Tyson was not paying wages due under the Fair Labor Standards Act of 1938 and the Iowa Wage Payment Collection Law.
The U.S. Court of Appeals for the Eight Circuit upheld the lower court’s judgment, siding with the employees and rejecting Tyson’s argument that the plaintiffs presented insufficient evidence to prove damages classwide. Tyson claimed the class should be decertified because evidence showed that some members did not work overtime and had no legal right to damages.
In the case — Tyson Foods, Inc. v. Peg Bouaphakeo, et al. — the high court will decide if all members of a class action lawsuit need to have been injured and have a legal right to damages.
Arguments in the case will be heard in the fall.