Standards of Proof in Employment Wage and Hour Class Actions Remain a Hot Topic for U.S. Supreme Court

By Lawrence J. del Rossi

Last week the United States Supreme Court heard oral arguments in a donning and doffing class and collective action against Tyson Foods, Inc. (see full transcript of oral argument here) that has the potential to dramatically expand the certification of class and collective wage and hour “off-the-clock” actions.

The Fictional “Average Employee”

One of the primary issues in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, is whether the plaintiffs’ use of statistical averages in a Fair Labor Standards Act (“FLSA”) case was appropriate to certify a federal Rule 23(b)(3) damages class and to prove liability and damages at trial.  The plaintiffs relied on expert testimony to prove that a class of more than 3,000 workers at an Iowa pork processing plant were owed overtime wages for time spent donning and doffing personal protective equipment and walking to and from their workstations.  At trial, the plaintiffs used statistical evidence of the average donning, doffing and walking times for employees, resulting in a jury verdict against Tyson Foods in excess of $5.8 million.  They relied on individual time sheets and average times calculated by their expert from more than 700 videotape observations of employees putting on and taking off protective gear and walking to their workstations.

Relying on the Supreme Court’s recent employer-friendly class action decisions in Wal-Mart Stores v. Dukes, 131 S. Ct. 2541 (2011) and Comcast v. Behrend, 133 S.Ct. 1426 (2013), Tyson Foods appealed the verdict to the Eighth Circuit Court of Appeals.  It argued that the plaintiffs’ reliance on statistical evidence improperly “presume[s] that all class members are identical to a fictional ‘average’ employee,” which is contrary to the so-called “trial by formula” prohibition in Dukes and Behrend for determining classwide liability and damage.

A divided (2-1) panel of the Eighth Circuit disagreed with Tyson Foods’ positions.  Based on a split in the circuits, the Supreme Court granted certification on (1) whether differences among individual class members may be ignored and a class action certified under Rule 23(b)(3), or a collective action certified under the FLSA, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample; and (2) whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the FLSA, when the class contains hundreds of members who were not injured and have no legal right to any damages.

Will Statistical Modeling Be Permitted to Show Classwide Violations Under the FLSA?

Some of the Justices, including the likely swing-vote, Justice Kennedy, appeared skeptical of Tyson Foods’ argument that the plaintiffs could not rely on statistical averages as the mechanism to demonstrate commonality and typicality among workers when there was evidence Tyson Foods did not keep accurate or adequate time records.  Several Justices cited to the burden-shifting framework in off-the-clock cases established after Anderson v. Mount Clemens Pottery Co., 380 U.S. 680 (1946) (where the employer’s records are inaccurate or inadequate and the employee cannot offer convincing substitutes, the burden shifts to the employer to demonstrate the precise amount of work performed or to refute the inference to be drawn from the employee’s evidence).  In addition, Justice Kennedy suggested that Tyson Foods might have waived arguments by not challenging the plaintiffs’ statistical experts at trial, by objecting to bifurcating the liability and damages phases of the trial, and by not seeking a special jury verdict for determination and apportionment of damages among class members.

On the other side, Justices Alito and Roberts questioned whether the use of averaging is appropriate when the job positions and equipment used by workers were undisputedly different among the workers included in the class, and where it was undisputed that some workers did not perform the activities in question and therefore suffered no injury.  Justice Alito asked, “How can you separate the employees who were injured from the employees who were not injured” or “how much time the employees were entitled to” except in “a very slap-dash fashion?”  The Chief Justice echoed this point, stating “once the jury rejects plaintiffs’ “average statistics, . . . there’s no way to tell whether everybody who’s going to get money was injured or not.”


The Tyson Foods case highlights the difficulties employers continue to face when determining whether their workers’ “preliminary” (time spent before the principal work begins) and “postliminary” activities (time spent after the principal work ends) are compensable in the first place under the FLSA. As Justice Alito asked at oral argument, “What do you think an employer should do about recordkeeping when the employer believes that certain activities need not be counted under the FLSA? . . . Is it supposed to keep two sets of records?”  The answer, according to the DOJ’s attorney, is that “Mt. Clemens . . . make[s] clear that the employer is stuck with its mistake . . . .”

Tyson Foods also shows that despite the Court’s decisions in Dukes and Comcast, which many commentators predicted would be the death knell of employment class actions, courts continue to certify classes where the plaintiffs can muster enough evidence (including statistical “averages” through qualified experts) to overcome the presumption of individualized differences among class members.  Further, while the lack of accurate time records is not an insurmountable obstacle to defeating an employee’s claim that he or she (or a group of workers) did not receive overtime for compensable time worked in excess of 40 hours, it could provide an opening under the Mt. Clemens standard for employees to take advantage of “relaxed” standards of proof (“just and reasonable inference”) to show wage violations under the FLSA, which ultimately could allow them to avoid early dismissal and get to a jury.

What Are Your Company’s Wage & Hour Risks?

Wage & Hour class actions are being filed at a pace that dwarfs almost all other types of litigation. With a myriad of federal and state laws and regulation, employers not only need to take steps to minimize the risk of a suit, but also must be prepared to defend themselves. Launch the brief video below to hear how Labor and Employment Group partners Cheryl Orr and Stephanie Gournis are helping employers involved in employment class actions, as well as helping companies to minimize the risk of litigation.




Obligations for Employers Before, During and After a Storm

By: William R. Horwitz

As cleanup from the Nor’easter that pummeled the East Coast last week continues, and the prospect of more snow looms, we hope that you and your families, as well as your businesses and employees, are safe and warm and that the lights are on. As this has been one of the more problematic winters in recent memory, we wanted to remind employers of some of their obligations before, during and after a storm.

Temporary Closings

Unless your agreements or policies provide otherwise, you are generally not required to pay non-exempt employees when they are not working. Therefore, if your business is closed and your employees do not report to work, you are not obligated to pay non-exempt employees. However, make sure that these employees are not checking work e-mails, communicating with supervisors about work-related issues or otherwise working from home, because non-exempt employees are entitled to receive pay for these activities even if they do not physically report to work.

Note that some states require an employer to pay employees for reporting to work, even if the business closes and the employer sends them home. For example, a New Jersey employer must pay employees who report to work at least one hour of pay. A New York employer must pay employees who report to work at least four hours of pay (or the number of hours in the scheduled shift if it is less than four hours). With regard to exempt employees, they are generally entitled to receive their full salaries, even if the business is closed – at least if the shutdown lasts for less than a week. If a business is closed for an entire week and an exempt employee performs absolutely no work during that time, the employer is generally not required to pay the employee for the week.

When a business is temporarily closed, the employer can require exempt employees to use accrued vacation time for the time off, but this requirement should be set forth clearly in the Employee Handbook and any employment contracts.


After a storm passes, employees whose homes remain without power, who are repairing damage to their property or whose children’s schools remain closed, may seek additional time off from work. While an employer that can afford to do so may allow additional flexibility to these employees in order to give them peace of mind and boost their loyalty and morale, these requests may otherwise be handled pursuant to the employer’s contracts and policies.

Other Issues

In addition to the above general points, employers should also be aware of state laws that affect certain employees and certain industries. For instance, in New York and New Jersey, the prohibition against mandatory overtime for health care personnel includes an exception for a declared state of emergency. New Jersey also provides protections for employees who miss work because of their responsibilities as volunteer first responders.


Extreme weather and natural disasters that disrupt business create big headaches for employers and employees. We recommend clear and consistent communication with your employees to avoid confusion about your expectations. Also, maintaining sound employment policies and consulting with counsel when issues arise is critical for avoiding additional headaches resulting from ensuing workplace legal liability.

California Employers: What You Need to Know for 2014 – Wage and Hour Laws and Penalties

A new year means new legislation and regulations for employers with operations in California.  Prepared by Kate Gold, partner in the Los Angeles office, and Alexis Burgess, associate in the Los Angeles office, this four-part series will take a look at some of the new laws and regulation affecting private employers doing business in California.

Wage and Hour Laws and Penalties

Minimum wage increase.  AB 10 raises the state-wide minimum wage from the current $8 per hour to $9 per hour, effective July 1, 2014, and then to $10 per hour, effective January 1, 2016.  Employers should note that employees currently classified as exempt must still meet the salary basis test to qualify for the particular exemption claimed.

Minimum wage penalties.  Under Labor Code section 1194.2, employees who have not been paid minimum wages may recover liquidated damages through civil actions or administrative wage hearings before the Labor Commissioner.  AB 442 extends the authority of the Labor Commissioner to award liquidated damages to affected employees through the labor commissioner citations process.  Thus, affected employees will be able to recover liquidated damages in an amount equal to the wages unlawfully unpaid plus interest thereon through either a civil action, an administrative hearing, or a citation issued by the Labor Commissioner.

Wage claim attorneys’ fees.  Labor Code section 218.5 awards attorneys’ fees and costs to the prevailing party in any action for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, regardless of whether the prevailing party is the employer or employee.  Under SB 462, a prevailing employer may only recover attorneys’ fees and costs if the court determines that the employee filed suit in bad faith.

Domestic worker overtime.  AB 241 enacts the Domestic Worker Bill of Rights, which provides that a “domestic work employee who is a personal attendant” will be eligible for overtime at 1.5 times his or her regular rate of pay if he or she works more than nine hours in any workday or more than 45 hours in the workweek.  Individuals and entities employing in-home help should determine whether they or their employees qualify for an exemption.

Heat illness recovery periods.  Under Cal/OSHA regulations, employees that work outdoors in temperatures exceeding 85 degrees Fahrenheit must be allowed, and encouraged, to take a cool-down rest for at least five minutes when they feel the need to do so in order to avoid overheating.  SB 435 now adds this “heat illness recovery period” to the requirement in Labor Code section 226.7 that employers provide employees with meal and rest breaks.  Thus, an employer’s failure to provide a heat illness recovery period to non-exempt employees will now result in penalties under Labor Code section 226.7 amounting to one additional hour of pay at the employee’s regular rate of compensation for each workday that the recovery period is not provided.

Criminal withholding.  Labor Code section 218.5 makes it a crime for an employer to willfully fail to remit agreed-upon payments to health and welfare funds, pension funds, or other various benefit plans, with failure to remit more than $500 constituting a felony.  SB 390 amends section 218.5 to include an employer’s failure to remit withholdings from an employee’s wages made for state, local, or federal tax purposes.

Prevailing wages.  Employers who provide services or construction work for any public entities must pay current prevailing wages, which are usually significantly higher than the minimum wage.  Prevailing wage laws have been updated for 2014 in the following ways:

  1. AB 1336 and SB 377 amend the process and timeline for assessing prevailing wage violations.  Under these provisions, a notice of completion of a public work filed with a county recorder must also be given to the Labor Commissioner, and the awarding body or political subdivision which accepts a public work must also provide notice of that acceptance to the Labor Commissioner.  The new laws then extend the deadline for the Labor Commissioner to serve a civil wage and penalty assessment alleging a violation of the prevailing wage law from 180 days (roughly six months) to eighteen months after the filing of a valid notice of completion with the applicable county recorder, or after acceptance of the public work, whichever occurs last.  Moreover, if notice is not given in a timely manner to the Labor Commissioner, the deadline to serve an assessment shall be tolled for the length of the delay.
  2. AB 1336 also amends prevailing wage law to allow a court to award liquidated  damages and civil penalties, whereas such relief was previously recoverable only in an administrative action brought by the Labor Commissioner.
  3. Existing  law requires affected contractors to keep detailed payroll records  relating to public works and produce these as necessary, with names and  social security numbers redacted, to a joint labor-management committee.  AB 1336 amends this rule to require redaction of social security numbers only.
  4. SB 377 also establishes specific deadlines for the Director of the Department of Industrial Relations to respond to a request for a determination of whether a specific project or type of work is a public work within the meaning of the prevailing wage law.
  5. SB 7  prohibits a charter city from receiving or using state funding or financial assistance for a construction project if the city has awarded, within the prior 2 years, a public works contract without requiring the contractor to comply with prevailing wage provisions.  Small project exemptions apply.  SB 7 was enacted on the heels of a decision by the California Supreme Court holding that, under the California Constitution, the wage levels of workers employed by charter cities on locally funded public works projects are a municipal affair not subject to state regulation.  Thus, the constitutionality of this new law may be the subject of future litigation.
  6. SB 54  extends prevailing wage requirements to privately financed refinery construction projects.
  7. SB 776 prohibits contractors from counting payments for monitoring and enforcing prevailing wage laws towards their obligation to pay prevailing wages.

Unless otherwise noted the laws and regulations discussed above go into effect on January 1, 2014.  These summaries are not exhaustive, so employers who may be affected by California’s new laws should contact their attorneys to ensure that they are prepared for compliance and to update their employee policies and manuals as appropriate.

Employment Law Seminar Presented by the Federal Bar Association Chicago Chapter

Employment Law Seminar

The Chicago FBA invites you to attend its Employment Law Seminar on Thursday, January 23, 2014.  This program will feature eight judges from the federal and Illinois judiciary, including the Seventh Circuit Court of Appeals, the Northern District of
Illinois and the Circuit Court of Cook County, as well as representatives from the Equal Employment Opportunity Commission, University of Chicago Law School and private practitioners.

Do not miss this opportunity to hear firsthand from these experts about the ever-changing landscape of federal and state laws and regulations. Panel discussions will cover recent developments in employment discrimination law, procedural developments in individual and class litigation, settlement and mediation, and EEOC investigations and litigation, among other topics of utmost
importance to employment law attorneys, employers and employees.

To view the agenda and pricing information, click here.

Thursday, January 23, 2014

1 to 5 p.m.
Cocktails and Hors d’oeuvres to follow

Hosted by Drinker Biddle & Reath LLP
191 North Wacker Drive
Chicago, Illinois

3.75 Illinois MCLE credit hours*

Register online:

* FBA Chicago will be applying for accreditation for 3.75 Illinois MCLE credit hours. Continuing legal education credits for other states must be handled by individual attendees.

Unpaid Interns Deemed Employees Under the FLSA

By: Kate S. Gold and Elena S. Min

A federal district court in New York ruled last week that unpaid interns who worked on the production of films for Fox Searchlight Pictures Inc. and Fox Entertainment Group, Inc. were actually employees who should have been paid in accordance with the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”)Glatt v. Fox Searchlight Pictures Inc., Case No. 11-CV-06784 (S.D.N.Y. 2013).  This decision comes just weeks after another Southern District of New York judge issued a favorable defense ruling by denying class certification for unpaid interns at various Hearst-owned magazines.  See Wang v. The Hearst Corporation, Case No. 12-CV-00793 (S.D.N.Y. 2013).

In Glatt, the court applied the six-factor test set used by the Department of Labor (“DOL”)  and determined that two unpaid interns who worked on production of Black Swan were improperly classified  and did not come within the “trainee” exception to the FLSA’s coverage.  Instead, the interns should have been classified as employees subject to the FLSA and NYLL.  Specifically, in applying the DOL test, the court found that:

  1.  The internship was not similar to training in an educational environment because the interns did not receive any formal training or education, or acquire any new skills aside from those specific to the Black Swan back office during the internship;
  2. The internship had only incidental benefit to the interns – resume value and references– which were not the result of the structure of the internship, and that Fox also benefitted from the unpaid work;
  3. The interns displaced regular employees and performed tasks that would have otherwise been performed by regular employees, such as obtaining documents for personnel files, picking up paychecks for coworkers, tracking and reconciling purchase orders, making copies, and running errands, among other low-level tasks;
  4. Fox received immediate advantages from the activities of the interns, and there is no evidence that the interns impeded work;
  5. The interns were not entitled to a job at the conclusion of the internship; and
  6. The parties understood that the interns were not entitled to wages for time spent in the internship, although the court noted that this factor was not determinative.

While the plaintiffs to whom the court’s ruling applied did not seek class certification, the court granted another plaintiff’s motion for class certification of her NYLL claims and conditional certification of the FLSA claims.  In doing so, the court found that:  (1) the class was sufficiently numerous because it included at least 40 plaintiffs whose information was not easily identifiable by plaintiffs; (2) there are common questions or law and fact relating to the DOL’s six-factor test; (3) the plaintiff’s claims are typical of the class because she participated in the same internship program administered by the same set of recruiters as all class members and was classified as an unpaid intern like all class members; (4) plaintiff’s interest are not antagonistic to those of the class; (5) common issues of liability predominate over any individual damages claims; and (6) class action is a more efficient mechanism than individual claims because of the relatively small recoveries available.

The court’s reference to the evidence presented in the case provides a good lesson for employers.  The court noted an internal memo in which Fox stated that, in light of the DOL test, Fox would only provide paid internships unless a manager could comply with the six criteria provided by the DOL.  The outcome in Glatt demonstrates employers must remain vigilant not only in maintaining proper policies on internships, but also in training and oversight of managers, to ensure compliance with the DOL’s six-factor test and the FLSA.