The Supreme Court will hear arguments in a case today that could set new limits on class-action lawsuits.
The case centers on a $5.8 million judgment Tyson Foods Inc. was ordered to pay employees in a class-actions lawsuit that began in 2007 when six employees of it’s meat-processing facility in Storm Lake, Iowa, accused the company of violating federal and state labor laws.
The workers filed a class-action suit, in which 3,000 current and former employees were named, 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 employee is at their working station and the production line is moving, but added four 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. A study, however, showed it took employees an average of 18 to 21 minutes depending on the department to dress, undress and walk to their workstations.
The U.S. Court of Appeals for the Eight Circuit upheld the lower court’s judgment in a 2-1 decision despite Tyson’s argument that the plaintiffs presented insufficient evidence to prove damages class-wide. Judge Duane Benton dissented saying the employees were not technically eligible to be certified as a class in the lawsuit to begin with.
Now the high court is being asked if a class can be certified if it includes hundreds of members who were not injured and have no legal right to any damages. The court is also being asked if statistical data can be used to create a formula for determining damages.
If the court rules in favor of Tyson Foods, Richard Alfred, chair of Seyfarth Shaw LLP’s National Wage & Hour Litigation practice, said it could make it harder to bring a class-action suits seeking monetary damages.