Hunton Employment & Labor Perspectives

The U.S. District Court for the Eastern District of Pennsylvania recently decertified a wage and hour collective action against Pennsylvania poultry processor Farmers Pride, ruling that a collective action is not an appropriate mechanism for resolving claims that the employer failed to fully compensate employees for time spent engaged in donning- and doffing-related activities.  The Court’s 47-page opinion reflects a thorough analysis that will serve as guidance to employers and courts around the country faced with similar collective action claims.

The lawsuit was filed in 2007 under the Fair Labor Standards Act on behalf of approximately 3,000 current and former employees.  The Court conditionally certified the class, and approximately 330 employees opted in to the class.  After the close of discovery, Farmers Pride sought decertification of the class, arguing that the variations in compensation practices and pre- and post-shift activities during the limitations period, in addition to the inconsistencies in class member testimony on those issues, made collective action treatment unworkable and unfair to Farmers Pride.  Specifically, under the compensation system applicable to most class members, the amount of additional time that Farmers Pride paid employees for donning- and doffing-related activities varied widely by employees’ shift and department and over time.

Notwithstanding the substantial briefing offered by the parties, the Court decided to take a closer look at the evidence and held a two-day evidentiary hearing where each side was given a full day to present witnesses and exhibits focused on the decertification issue.  The Court’s opinion granting Farmers Pride’s decertification motion relied on both the evidentiary hearing testimony and the other evidence submitted by the parties during the briefing process.

In ordering decertification, the Court found that there was no uniform, class-wide method for Plaintiffs to prove that Farmers Pride’s compensation system was uniformly inadequate:

“The evidence submitted indicated that there may be some hourly production workers who have legitimate claims of undercompensation for time spent donning and doffing, and some who may not; the evidence does not demonstrate, however, that the question of undercompensation can be answered in [a] manner common to all plaintiffs.”

The Court thus found that the absence of common proof made proceeding collectively unfair because, if tried on a collective basis, a verdict for the plaintiffs would make the company liable to the entire class even though it may have fully paid many members of the class.

The Court also gave serious weight to the fact that the class members offered discovery responses and deposition testimony that were “plagued with inconsistencies,” which in turn showed “the importance of cross-examination of each plaintiff” as opposed to allowing the Plaintiffs to prove their claim through supposedly “representative” testimony.

In decertifying the class, the Court noted that, in light of the remedial purposes of the FLSA, it would give Plaintiffs two weeks to propose an alternative class consisting of a “more precisely defined and smaller group,” but only “if plaintiffs can establish that the record warrants a collective action as to that group.”  However, the Court was clear that any such proposal must take into account the Court’s findings on the evidence before it and must credit the evidence and testimony presented by defendant, which the Court considered credible and reliable.

Hunton & Williams attorneys Michael Mueller and Ryan Glasgow, along with Jill Welch from Barley Snyder, represent Farmers Pride in the federal action, as well as a companion case pending in Pennsylvania state court.