Gomez et al v Tyson Foods

Filing 434

MEMORANDUM AND ORDER - The plaintiffs are awarded compensatory damages in the amount of $1,653,595.60. The plaintiffs are awarded additional liquidated damages under the Fair Labor Standards Act in the amount of $1,653,595.60, for a t otal award of $3,307,191.20. The defendant shall remit $1,653,595.60 to the State Treasurer of the State of Nebraska for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska for willful nonpayment of wages under Neb. Rev. Stat. § 48-1231(2). A judgment in accordance with this Memorandum and Order will issue this date. Ordered by Judge Joseph F. Bataillon. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
JOSE A. GOMEZ, JULIANA REYES,
JUAN M. CRUZ, TED MCDONALD,
CECILIA ORTIZ, and MARIO CRUZ, on
behalf of themselves and all other similarly
situated individuals,

8:08CV21
MEMORANDUM AND ORDER

Plaintiffs,
v.
TYSON FOODS, INC.,
Defendant.

This matter is before the court on the parties’ damages calculations and
objections thereto. Filing Nos. 416 and 424.
I. FACTS
This action was tried to a jury on March 18-21, 26-31, and April 2, 2013. Before
the trial, the court granted the plaintiffs’ motion for summary judgment on liability. Filing
No. 224, Memorandum and Order (“Mem. & Order”) at 38-40. Further, the court found
that Tyson was not entitled to a defense of good faith. Id. at 38-40. The court also
found that Tyson’s conduct was both objectively unreasonable and its actions were
taken in reckless disregard of the law. Filing No. 306, Mem. & Order at 10.
The only issue for resolution by the jury was the amount of time it took, as a
reasonable approximation of average time, for Tyson’s Dakota City employees to
perform the donning and doffing activities and walking to and from the production line
that the court had found compensable as a matter of law. See Filing No. 224, Mem. &
Order at 38. The jury was instructed:
Wages must be paid for the time spent performing donning and
doffing activities that occur before and after shifts and on unpaid meal

breaks to employees who use some combination of the following
equipment working on the production lines at the Dakota City facility: ear
plugs, hard hat, hairnet, beard net (if they have facial hair), boots, mesh
glove, mesh sleeves, mesh apron, polar gloves, polar sleeves, arm guard,
belly guard, frock, white pants and shirt, safety glasses and scabbard and
knives. Wages must be paid for other activities that occur between the
first donning activity before the start of the shift and the last doffing activity
after the end of the shift including: (1) donning and doffing equipment; (2)
walking from the lockers where equipment is obtained or donned to the
production line before the start of the shift; (3) washing or sanitizing
equipment or an employee’s hands; (4) waiting for production to start on
the production line; (5) walking from the production line to the areas where
equipment is hung up, stored or deposited at the start of unpaid meal
breaks; (6) donning, doffing or washing equipment on unpaid meal breaks;
(7) walking back to the production line during unpaid meal breaks after
gathering, donning and washing equipment; (8) walking and transporting
equipment from the production line at the end of the shift to the wash
station; (9) doffing, washing or sanitizing equipment after the end of the
shift; and walking and transporting equipment from the wash stations to
the lockers where equipment is hung, stored or deposited at the end of the
shift.
You must determine the amount of time employees spend
performing these activities that the court has found compensable. This is
the only issue for you to decide.
Filing No. 399, Initial Jury Instructions at 15, Instruction No. 12, “Compensable
Activities.”
The jury determined that on average, per day, employees in the Kill Department
at Tyson Foods’ Dakota City plant spent 5.79 minutes performing the compensable
activities at issue and employees in the Processing Department spent 4.56 minutes.
Filing No. 394, Answers to Special Interrogatories (Jury Verdict).
The court ruled prior to trial that the amount of backpay due each class member
was not a disputed issue of fact to be decided by the jury because it would involve only
simple arithmetic once the jury had determined the number of minutes the work at issue
takes to perform. Filing No. 224, Mem. & Oder at 38; Filing No. 306, Mem. & Order at

2

1-2; Filing No. 307, Mem. & Order at 3. The parties were ordered to submit respective
damage calculations. Filing No. 274. Both parties have done so. See Filing Nos. 416
and 424.
The plaintiffs have submitted the Expert Report and Calculations of Dr. Liesl Fox,
Ph.D. Filing No. 416, Dr. Liesl Fox, Ph.D., Expert Report (“Dr. Fox Rpt.”). Dr. Fox is a
Senior Consultant at Quantitative Research Associates, a firm that provides statistical
and computing consulting services. See id., Dr. Fox Rpt. at 1. She has been employed
in that capacity since 1997. Id. She has been a statistical consultant for over eighteen
years, and has conducted analyses in the fields of litigation and medical research and
testified as an expert witness. Id. She specializes in data analysis and the application
of statistical methodology to various fields of study, and has worked with data related to
different areas of employment, including damages calculations. Id. Her responsibilities
also include database preparation and management and she is the author of several
research articles. Id.; see Appendix C, Curriculum Vitae.
Dr. Fox’s calculations are based on Tyson’s pay data. Id., Dr. Fox Rpt. at 3-4;
see Appendix B, Exs. A-D, Damages for Each Class Member. The class consists of
8,877 employees who were included in the Pay Detail Data and who worked in a
production department for at least one day beginning January 17, 2004. Id., Dr. Fox
Rpt. at 3. Dr. Fox presented several alternative compensation scenarios. Id. at 8-9,
Tables 1-4; Appendix B, Exs. A-D.
Dr. Fox computed damages based on the jury’s determination that class
members working in the kill areas of Tyson Foods spent 5.79 minutes on the contested
activities at issue in this case, and that class members working in the processing areas

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of Tyson Foods spent 4.56 minutes on the contested activities at issue in this case. Id.
at 4. The amount of time spent on the contested activities at issue in this case was
added for each day that an employee worked in a production department between
January 17, 2004, and April 3, 2013. Id. The added time was summed over all days
worked during the week, and was understood to be the amount of uncompensated time
for the week.

Id.

Dr. Fox computed the damages by multiplying the amount of

uncompensated time worked under 40 hours by the regular hourly rate of pay, and
multiplying the amount of uncompensated time worked over 40 hours by the overtime
(time-and-a-half) rate of pay.1 Id. at 4-5. Under that scenario, the total amount of
compensatory damages for the class for all uncompensated time, without mitigating for
K-code time, is $7,513,125.03. Id.
Dr. Fox also calculated the amount of previously compensated K-code time.2 Id.
at 5.

She reduced the amount of uncompensated time worked each week by the

amount of compensated K-code time shown in the Pay Detail Data for the week. Id.
She computed damages by multiplying the amount of remaining uncompensated time
worked under 40 hours by the regular hourly rate of pay, and multiplying the amount of
remaining uncompensated time worked over 40 hours by the overtime (time-and-a-half)
rate of pay. Id. The resultant amount of compensatory damages under that scenario is
$1,653,595.60. Id.

1

She also performed the same calculation for overtime alone. Id., Fox Rpt. at 5 and 8, Table 1.
The total compensatory damages for the class for uncompensated overtime, without mitigating for K-code
time, amount to $4,649,848.40. Id. After K-code mitigation, that amount is $1,036,252.59.
2

The evidence at trial showed the class members received 4 minutes of “K-code” pay. Filing No.
409, T. Tr. (Vol. VIII) at 1742. The court previously ruled that the jury was not to consider the K-code pay
and that the court would deduct or “offset” the K-code payments from the jury determination. See Filing
No. 224, Mem. & Order at 38.
4

Adjusted for liquidated damages of two times the amount of the award, the
plaintiff class’s total damages are $3,307,191.20.

Id.

The plaintiff class’s total

liquidated damages computed at treble the amount of compensatory damages,
mitigating for previously compensated K-code time, is $4,960,786.80. Id.
Tyson submits damages calculations prepared by Tyson’s proffered “Rule 1006”3
witness, Dr. Peter Nickerson. Filing No. 425, Ex. 1, Declaration of Peter H. Nickerson,
Ph.D. (“Dr. Nickerson Decl.”).

Dr. Nickerson states he has reviewed Dr. Fox’s

calculations, compared them to her earlier report, and estimated the damages owed to
the plaintiffs based on the relevant work duties.4 Id. at 3. At trial, Tyson attempted to
present Dr. Nickerson as a Rule 1006 witness with respect to evidence related to punch
times, but the court found he was in fact an expert witness and had not provided an
expert report to the plaintiffs either by the expert-report deadline or before trial, so he
was not permitted to testify.5 Whether Dr. Nickerson is an expert or summary witness
3

Rule 1006 provides:

The proponent may use a summary, chart, or calculation to prove the content of
voluminous writings, recordings, or photographs that cannot be conveniently examined in
court. The proponent must make the originals or duplicates available for examination or
copying, or both, by other parties at a reasonable time and place. And the court may
order the proponent to produce them in court.
Fed. R. Evid. 1006.
4

Shortly before trial, the magistrate judge granted the plaintiffs’ motion to compel updated time
and payroll records for persons who were present or former employees as of the date of class
certification. Filing No. 281. The magistrate judge found that employees hired after that date were not
class members. Id. at 4. In Acosta, the court found that the class properly included employees hired
after the certification date. Acosta, No. 8:08CV86, Filing No. 311, Mem. & Order at 2; Filing No. 316,
Mem. & Order at 2-3. In a recent order in this case, the district court sustained the plaintiffs’ objection to
the magistrate judge’s order, overruled that portion of the magistrate judge’s order that limited the class to
people hired before March 30, 2011, denied Tyson’s motion to decertify, and amended the class to
include persons hired up to the date of the entry of the verdict. See Filing No. 432, Mem. and Order at
10. Accordingly, the court finds that an award of damage for the amended class up to the date of the
jury’s finding is appropriate in this case.
5

Tyson submitted a proffer that Dr. Nickerson could have authenticated Tyson’s own pay-punch
data and contends that Dr. Fox’s calculations are not supported by authenticated records absent that
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with respect to the calculation of damages is of no consequence since the matter is
being determined by the court, based on factual findings by the jury.

There is no

dispute that the calculations were based on Tyson’s own records, Dr. Fox’s model and
programming code. The underlying data were produced to both parties, and there is no
dispute as to the principles of arithmetic that govern the calculations at issue. Although
he quibbles with certain variables, Dr. Nickerson has no issue with Dr. Fox’s basic
methodology, that is, adding the additional minutes to the number of hours the class
members worked per day. Entitlement to offsets is an issue of law for the court.
Dr. Nickerson has computed damages under eight scenarios, with damages
ranging from $160,918.96 to $667,648.96. Dr. Nickerson states that “[a]ll scenarios are
based on Dr. Fox’s model from her expert report dated April 30, 2012, with incorporation
of supplemental data produced by Tyson through April 3, 2013; correction of errors in
assignment of jobs to Kill or Process; inclusion of double-time hours worked; exclusion
of employees who opted out of the class; and limited to employees who worked in Kill or
Process jobs prior to or on the class certification date of March 30, 2011.” Id. at 8 n.1.
Dr. Nickerson also subtracts as offsets payments attributed to “sunshine” time; timeand-a-half or double-time paid for daily shifts over 8 hours per day, for holidays, or for
the seventh day pursuant to Union Contracts; as well as time for a second 15-minute
paid break when it is paid out. Id. at 7-8.

testimony. Filing No. 366, Proffer at 1. Tyson also proffers that Dr. Nickerson would have testified with
respect to the merger of two data sets—the defendant’s payroll and punch record sets. In Acosta, the
court rejected Dr. Nickerson’s purported theory and evidence and credited Dr. Fox’s testimony that punch
clock data was not relevant to any issue in the case since the time clocks were used only for attendance
and not to determine pay. See Acosta, No. 8:08CV86, Filing No. 311, Findings and Concl. at 48.
6

II. LAW
This action is governed by the precept that “an employer should not “be heard to
complain that the damages lack the exactness and precision of measurement that
would be possible had he kept records [as required].” Anderson v. Mount Clemens
Pottery Co., 328 U.S. 680, 688 (1946).
Recovery of liquidated damages under the Fair Labor Standards Act (“FLSA”)
results in an extension of the period of limitations from two to three years. See 29
U.S.C. §§ 255(a). The FLSA permits the recovery “of wages lost and an additional
equal amount as liquidated damages.”

29 U.S.C. § 216(b); see Overnight Motor

Transp. Co. v. Missel, 316 U.S. 572, 583–84 (1942) (observing that FLSA liquidated
damages are not penalties exacted by law, but, rather, compensation to the employee
occasioned by the delay in receiving wages due). The court is without discretion as to
the issue of liquidated damages unless the defendant shows that it acted in good faith
and had reasonable ground for believing that it was not violating the Act. See Janda v.
City of Omaha, 580 N.W.2d 123, 130-31 (Neb. App. 1998).
The Nebraska Wage Payment and Collection Act (“NWPCA”) provides that “[a]n
amount equal to the judgment may be recovered from the employer; or (2) if the
nonpayment of wages is found to be willful, an amount equal to two times the amount of
unpaid wages shall be recovered from the employer.” Neb. Rev. Stat. § 48-1229. The
court has discretion to determine whether and in what amount to award damages as a
penalty under subsection (1), but subsection (2) states the penalty “shall be recovered if
the nonpayment of wages is found willful.” Kinney v. H.P. Smith Ford, L.L.C., 667
N.W.2d 529, 536-37 (Neb. 2003).

7

Because punitive damages are not allowed in Nebraska, the NWPCA provides
that “[a]ny amount recovered pursuant to subdivision (1) or (2) of this section shall be
remitted to the State Treasurer for distribution in accordance with Article VII, section 5,
of the Constitution of Nebraska.” Neb. Rev. Stat. § 48-1232; see Abel v. Conover, 104
N.W.2d 684, 688 (Neb. 1960) (stating that “[i]t has been a fundamental rule of law in this
state that punitive, vindictive, or exemplary damages will not be allowed, and that the
measure of recovery in all civil cases is compensation for the injury sustained”). That
provision of the Constitution provides that “[s]ince all penalties must go to the benefit of
the common schools of the state, a penalty for the benefit of a private person” violates
Article VII, section 5, of Nebraska Constitution. Abel, 104 N.W.2d at 689; see State ex
rel. Cherry v. Burns, 602 N.W.2d 477, 484 (Neb. 1999) (“[O]rdinarily, with respect to
state causes of action, punitive damages contravene Neb. Const. art. 7, § 5, and are not
allowed.”). The Nebraska Constitution provides that “[a]ll such fines, penalties, and
license money shall be appropriated exclusively to the use and support of the common
schools in the respective subdivisions where the same may accrue.” Neb. CONST. art.
VII, § 5. With respect to a claim under federal law, the Supremacy Clause requires that
state law must give way when it conflicts with or frustrates federal law. U.S. CONST.
art. VI; Chapman v. Lab One, 390 F.3d 620, 624 (8th Cir. 2004).
Because the FLSA does not allow for any prejudgment interest where plaintiffs
also receive liquidated damages, the court can award prejudgment interest only under
Nebraska law. See Brock v. Superior Care, Inc., 840 F.2d 1054, 1064 (2d Cir. 1988);
Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 714-16 (1945) (noting that “the
liquidated damage provision is not penal in its nature but constitutes compensation for

8

the retention of a workman’s pay which might result in damages too obscure and
difficult of proof for estimate other than by liquidated damages.”); Gibson v. Mohawk
Rubber Co., 695 F.2d 1093, 1101–03 & n. 9 (8th Cir. 1982) (ADEA case) (“Courts have
ruled that the FLSA authorizes a grant of prejudgment interest if no liquidated damages
are awarded”).
Under Nebraska law, entitlement to prejudgment interest depends upon whether
the claim is liquidated or unliquidated. Hammond v. City of Broken Bow, 476 N.W.2d
822, 828 (8th Cir. 1991); Neb. Rev. Stat. § 45–103.01, et seq. No prejudgment interest
is allowable on unliquidated claims. Akkad v. Nebraska Heart Institute, P.C., 2012 WL
1233008, *12 (Neb. App. April 10, 2012). A claim is liquidated if the evidence furnishes
data which, if believed, makes it possible to compute the amount with exactness,
without reliance upon opinion or discretion. Hammond, 476 N.W.2d at 829; Nixon v.
Harkins, 369 N.W.2d 625, 631 (Neb. 1985). Also, a successful wage claimant under the
NWPCA is entitled to an award of attorney fees.

Rauscher v. City of Lincoln, 691

N.W.2d 844, 855 (Neb. 2005).
III. DISCUSSION
For the reasons set forth in its order on the class certification issue, the court first
finds the appropriate time period for recovery of damages begins on January 17, 2004,
and ends on April 3, 2013. See Filing No. 432, Mem. and Order at 10. Further, the
court finds the class includes all persons hired and working between those dates. Id.
In addition, the court finds the members of the plaintiff class are owed damages
for uncompensated regular time as well as overtime. Contrary to Tyson’s contention,
the plaintiffs’ complaint in this case was not limited to “unpaid overtime wages,” but

9

explicitly sought “unpaid wages” as well as “unpaid overtime wages.” Filing No. 1,
Complaint at 1. The court’s summary judgment order expressly contemplated straight
time recovery.

Filing No. 224, Mem. & Order at 40-41. Dr. Fox was permitted to

supplement her report and Tyson has had an opportunity to respond to the plaintiffs’
report that includes calculation of that time.
The court has considered Dr. Nickerson’s criticisms of Dr. Fox’s calculations and
finds they lack merit. The court has rejected Tyson’s contention that the class is limited
to those hired before the class certification date. Supra at 5 n.4. The court rejects the
offsets proposed in Dr. Nickerson’s analysis.6 The court found early in this action that
Union Contracts are not relevant to issues herein. See Filing No. 224, Mem. & Order at
39 & n.8; Filing No. 306, Mem. & Order at 3. FLSA rights cannot be bargained away in
a union contract. See Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728,
739-40 (1981) (emphasizing the nonwaivable nature of an individual employee’s right to
a minimum wage and to overtime pay). Further, this court and others have found that
“sunshine pay,” which is in the nature of incentive pay, is not an offset. See Garcia v.
Tyson, Foods, Inc., 890 F. Supp. 2d 1273, 1292-94 (D. Kan. 2012); Alvarez v. IBP, Inc.,
No. CT-98-5005, 2001 WL 34897841, at *24 (E.D. Wash. Sept. 14, 2001), reversed on
other grounds by Alvarez v. IBP, Inc., 339 F.3d 894 (9th Cir. 2003); 29 U.S.C. § 207(h);
29 C.F.R. § 778.207. The second paid 15-minute break is compensable under law and
is not an offset. See Filing No. 408, T. Tr. (Vol. VI) at 1407-09; 29 C.F.R. 785.18 (rest
periods of short duration, typically 5 to 20 minutes, are compensable).

6

All of the

The only contention with any possible merit is Dr. Fox’s inclusion of the 26 employees who
allegedly opted out of the class-action. However, Tyson provided the data that included those employees
to the plaintiffs. At any rate, the damages attributable to those employees are de minimis in the context of
the overall class of over 8,000 workers.
10

proposed offsets relate to pay for activities other than donning and doffing. Accordingly,
the court finds that Dr. Nickerson’s calculations do not reflect the law or the evidence at
trial and is not responsive to the court’s rulings in the case.
The court finds Tyson’s damages proposal is yet another attempt by Tyson to
skirt its obligations, clear since IBP, Inc. v. Alvarez, 546 U.S. 21 (2005), to record and
pay its employees for actual time. See Filing No. 224, Mem. & Order at 36-38; Acosta,
No. 8:08CV86, Filing No. 311, Findings and Conclusions (“Findings & Concl.”) at 17-25
(recounting Tyson’s extensive litigation history). All of Tyson’s contentions are aimed at
requiring the plaintiffs to establish damages with a level of precision that is not possible
as a result of Tyson’s own actions. Tyson miscomprehends the essential fact that the
plaintiffs are unable to establish damages on an individualized, job-by-job, day-by-day,
basis because it elected not to keep records of actual time, but to use a flat, across-theboard average of four minutes—which, it turns out, was inadequate—to pay for the
compensable activities at issue.7 The evidence at trial established that Tyson could
easily have recorded and paid actual time by utilizing the time clocks it uses for
attendance.

The plaintiffs were required to present evidence of a reasonable

approximation of the time and they have done so.
On review of the parties’ submissions, the court finds that the affidavit of Dr. Liesl
Fox is credible and the court will adopt her calculations.8 See Filing No. 416, Ex. A.
The appropriate measure of compensatory damages is Dr. Fox’s calculation of “all

7

Also, the court notes that to allow a company to violate the essential precept of pay for time
actually worked puts FLSA-compliant companies at a competitive disadvantage and ultimately harms the
free market system.
8

The court is familiar with Dr. Fox’s credentials and methodology from the Acosta trial. See
Acosta, No. 8:08CV86, Filing No. 311, Findings & Concl. at 46.
11

uncompensated time, mitigating for previously compensated K-code time.” See Filing
No. 416, Ex. 1, Dr. Fox Rpt. at 8, Table 1. The court found in Acosta that Dr. Fox’s
“basic methodology was to add the number of minutes that Dr. Mericle found in his time
study to each class member’s weekly wages and then to multiply those minutes by the
employee’s hourly rate for each week that they worked overtime.” Id. Also, based on
substantively identical evidence from Dr. Fox, the court found that her calculations “are
made individually as to each class member using the personal hours of work, job
assignments, and wage rates that are reflected in Tyson’s records with respect to each
employee” and that, “[a]lthough the calculations were based on average times . . . the
resultant damages amount was individually computed as to each employee.” Id. at 4647. Dr. Fox’s model uses the same methodology that Tyson used with respect to the
K-code time.

The court finds the methodology is fair and the court credits the

calculations of Dr. Fox in assessing damages.
The court has ruled as a matter of law that the plaintiffs are entitled to liquidated
damages under the FLSA and the NWPCA because Tyson’s conduct was willful and
unreasonable. See Filing No. 224, Mem. & Order at 37-38. The liquidated damages
that double the award under the FLSA are effectively subsumed in the triple damages
awarded under the NWPCA.

The additional NWPCA damages that are not

encompassed by the FLSA liquidated damages award, however, must be paid to the
State Treasurer for distribution to the common school fund under Nebraska law. The
court finds the amount of damages was not liquidated until the trial and accordingly
prejudgment interest will not be awarded.

12

Accordingly, the court will enter judgment in favor of the plaintiffs in the amount of
$3,307,191.20 (representing compensatory damages of $1,653,595.60 plus liquidated
damages in the same amount) and will order the defendant to remit $1,653,595.60 to
the State Treasurer of the State of Nebraska for distribution in accordance with Article
VII, section 5, of the Constitution of Nebraska.
The plaintiffs are also entitled to attorney fees in an amount to be later
determined by the court.9 Accordingly,
IT IS ORDERED:
1.

The plaintiffs are awarded compensatory damages in the amount of

$1,653,595.60.
2.

The plaintiffs are awarded additional liquidated damages under the Fair

Labor Standards Act in the amount of $1,653,595.60, for a total award of
$3,307,191.20.
3.

The defendant shall remit $1,653,595.60 to the State Treasurer of the State

of Nebraska for distribution in accordance with Article VII, section 5, of the Constitution
of Nebraska for willful nonpayment of wages under Neb. Rev. Stat. § 48-1231(2).
4.

A judgment in accordance with this Memorandum and Order will issue this

date.
Dated this 2nd day of October, 2013.
BY THE COURT:

s/ Joseph F. Bataillon
United States District Judge
9

The parties have entered into a stipulation providing that they will brief attorney fee issues after
any appeal. Filing No. 270. Accordingly, the court will hold that determination in abeyance.
13