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Ground Zero for Overtime Compensation Disputes

By

As Published in Bench & Bar of Minnesota

Wage-and-hour claims constitute a rapidly growing genre of litigation, and this federal jurisdiction is becoming ground zero for it. A pair of recent rulings of the 8th Circuit, as well as another 8th Circuit case to be heard soon by the U.S. Supreme Court, reflect this trend as well as some peculiar aspects of it.

The 8th Circuit late this summer concurrently reversed two huge judgments totaling nearly $25 million (including one for more than $18 million) on behalf of workers at two Nebraska meat-processing plants, for unpaid overtime pay under the Fair Labor Standards Act (FLSA) 29 U.S.C. §201, et seq. This federal law requires compensation of 1-1/2 times the regular rate of pay for work in excess of 40 hours per week. That measure is implemented in most states with lesser overtime laws, such as the mini-FLSA in Minnesota, which is triggered by 48 hours of work per week.

The two overturned 8th Circuit cases both involved uncompensated overtime claims by large groups of employees putting on and taking off required protective garments before and after their work shifts, known as “donning-and-doffing,” which trial juries and judges found they were entitled to be paid for. The appellate court reversed on grounds that the cases, known as “collective actions” under the FLSA, were predominantly defective. Acosta v. Tyson Foods, Inc., 2015 U.S. App. LEXIS 15043 (8th Cir. 8/25/2015); ($8.8 million judgment reversed); Gomez v. Tyson Foods, Inc. 2015 U.S. App. LEXIS 15041 (8th Cir. 8/26/2015) ($4.9 million judgment overturned).

The reversals in both cases turned on a requirement under the FLSA §216(b) that for claims brought as “collective action” (a statutory form of class actions) each claimant must sign a written certification, unlike the typical procedure in conventional class actions in which one or a few named claimants act on behalf of all others. The failure to produce the signed certifications within the two-year statutory time period claimed both cases.

While these two reversals are likely to be subject to further appellate proceedings, by petitioners for en banc review or appeal to the Supreme Court, the High Court will be adjudicating another overtime pay case from the 8th Circuit this term involving the same employer and a facility in Iowa. In Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, the justices will be deciding the fate of $5.8 million judgment as well as the viability of large cases like this in light of its work in 2011 dismantling a massive class action brought by women Wal-Mart employees across the nation who alleged discrimination in promotion and pay. The Court deemed that action too unwieldy to proceed. Wal-Mart, Inc. v. Dukes, 131 S.Ct. 2541 (2011).

It also comes on the heels of a ruling last term in which the High Court rejected an overtime claim in Integrity Staffing Solutions, Inc. v. Busk, 135 S.Ct. 513 (2014) for pre-shift and post-shift security checks of employees that were deemed not “integral or indispensable” to their work.

As these developments unfold, the Obama Administration unveiled new proposed regulations granting eligibility for overtime compensation to some 3 million home health care aides as well as an initiative to raise the ceiling on overtime pay from $23.660 threshold to $50.400, which would double the number of workers eligible for overtime pay.

Employees and their attorneys should make sure they obtain certification of participation from all claimants in FLSA cases or assert lesser claims under state law and focus on the way the activity in question is essential, or at least germane, to the work duties. Employers and their advocates can point out instances when written documentation is lacking, and argue that the activities are not part and parcel of the normal job requirements.

Link to story on Bench & Bar:

http://mnbenchbar.com/2015/11/overtime-compensation/