Tyson Loses as High Court Upholds $5.8 Million Worker Award

The U.S. Supreme Court dashed business hopes for new limits on class-action lawsuits, upholding a $5.8 million wage award to workers at a Tyson Foods Inc. pork-processing plant in Iowa.

In a 6-2 ruling, the court rejected Tyson’s arguments that it was subjected to an improper “trial by formula” and that the class of workers included some who were fully compensated.

The ruling is a victory for consumer and worker advocates who say class actions are an efficient way to hold companies accountable. Companies were seeking to extend a 2011 ruling that said Wal-Mart Stores Inc. couldn’t be sued by potentially a million female workers.

A jury found that Tyson had underpaid workers at its Storm Lake, Iowa, plant for time spent putting on protective gear and walking to and from work stations.

Tyson, the largest U.S. meat producer, said the suing workers shouldn’t have been allowed to use statistical techniques that presumed everyone in the group of 3,000 workers was identical to fictional average employees.

Writing for the court, Justice Anthony Kennedy rejected that reasoning.

“Wal-Mart does not stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability,” Kennedy wrote.

Fair Labor Law

Kennedy characterized the ruling as a narrow one, and it is likely to have its biggest impact in wage-and-hour suits under the Fair Labor Standards Act. The decision was based in part on a 1946 Supreme Court that said workers may use “just and reasonable inferences” about how much they are owed if employers don’t keep reliable records.

“The fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances peculiar to those cases,” Kennedy wrote.

Tyson also argued that hundreds of workers were paid in full and that the plaintiffs’ lawyers failed to ensure those employees didn’t collect damages.

Trial Phases

Kennedy said Tyson would have a chance to argue at the trial court level that the award should be allocated differently among the workers. Still, he faulted Tyson for opposing the idea of dividing the trial into separate liability and damages phases -- a step that might have provided greater precision about which workers the jury concluded were underpaid.

Tyson “argued against that option and now seeks to profit from the difficulty it caused,” Kennedy wrote.

Justices Clarence Thomas and Samuel Alito dissented. Thomas accused the majority of “redefining class-action requirements and devising an unsound special evidentiary rule” for wage-and-hour suits.

The Obama administration backed the workers in the case.

The case is Tyson Foods v. Bouaphakeo, 14-1146.

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