Tyson Foods lost a closely watched Supreme Court case on Tuesday as justices upheld a $5.8 million award to workers in Iowa.
Tyson and other business groups, including the U.S. Chamber of Commerce and National Association of Manufacturers, hoped that the Supreme Court would bar the use of statistical evidence to determine damages and liability. If the Supreme Court had sided with Tyson, class action suits for laborers would have become more difficult.
Tuesday's decision means that statistical evidence can continue to be be used as evidence in class action cases.
Tyson argued that workers in this case should not have been able to pursue a class action suit. According to the company's filings with the court, employees took different amounts of time to dress in protective clothing at the start of a shift and remove it at the end of a shift, and that damages awarded to the workers could be improperly distributed to people who did not work unpaid overtime.
"We respect the judgment of the U.S. Supreme Court, and are disappointed with the result," said David Van Bebber, general counsel for Tyson. "However, we are also heartened by the divided Court's consideration and analysis of serious issues affecting the sufficiency of proof required to maintain a class action under the Fair Labor Standards Act. We are studying the opinion and, in particular, the issue of whether damages can be lawfully allocated to ensure that uninjured class members do not recover from the jury's lump sum award."
Justice Anthony Kennedy wrote the lead opinion for the court in its 6-2 decision. The case was one of three class action suits watched closely by labor activists this year. Justice Clarence Thomas and Justice Samuel Alito dissented in the Tyson case.
The workers at Storm Lake, Iowa, alleged that Tyson did not pay them for time spent dressing and removing the protective gear necessary for their work in the slaughterhouse. The case could affect more than 3,000 current and former workers at the plant.
Workers at the meat processing facility sued in 2007. In 2014, the 8th U.S. Circuit Court of Appeals upheld previous judgments on the case in favor of the workers.
Because Tyson did not keep records of the entire time its employees spent getting ready for their shift, the workers' legal representation used 744 videotaped observations to come up with the average time "donning and doffing" protective clothing.
While the Supreme Court declined to restrict the use of statistical evidence in its decision, it said such evidence is not always appropriate.
"The fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases," Kennedy wrote.
Business on 03/23/2016