Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 149 of error.746 Further, the defendant “must be given a chance to impeach that [statistical] model or otherwise show that its liability is reduced because some plaintiffs were properly classified as exempt.”747 Third, the Supreme Court instructed lower courts to consider at the certification stage whether a trial plan has been developed to address the use of statistical evidence, rather than “accepting assurances that [one] will eventually be developed.” That plan must show how individual issues can be managed at trial, and if the plan proves “unworkable,” then the class must be decertified.748 Turning to the facts before it, the Supreme Court held that the trial plan sanctioned by the lower court met none of these basic requirements. Among other things, the plan deprived U.S. Bank of its right to litigate its affirmative defenses by excluding relevant evidence relating to BBOs outside the sample group, and by extrapolating liability based on a flawed statistical model. That model, the Supreme Court held, was fatally flawed because the 22-member sample group was too small relative to the 260-member class, and because the supposed randomness of the sample group was undermined by the inclusion of the named plaintiffs and the later exclusion of others who had opted out, were replaced, or were unavailable. As a result, the sample was “biased in plaintiffs’ favor.” The Supreme Court also found the 43% margin of error to be “intolerably high,” potentially yielding a judgment twice the size of U.S. Bank’s actual liability.749 3. What Duran Means For Employers While the California Supreme Court stopped short of establishing a bright-line rule that statistical sampling cannot be used to prove class-wide liability, Duran nonetheless makes it clear that class counsel often face an uphill battle when they rely on statistical evidence.750 Any proposed statistical methodology must allow a defendant to 746 Id. at 42. 747 Id. at 38. 748 Id. at 32. 749 Id. at 32-50. 750 But see Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016). Peg Bouaphakeo, an employee at Tyson’s Iowa pork processing plant, brought a Rule 23 class and FLSA collective action claiming she and other employees were not paid for time spent donning and doffing certain protective gear. Under the FLSA and Iowa state law, to recover for unpaid overtime, the plaintiff had to show that time spent donning and doffing, combined with total work time in the week, totaled more than 40 hours, and the employer did not pay for all time worked. The central issue before the Supreme Court in Tyson Foods was the extent to which statistical evidence may be used as common proof of liability in class and collective actions. Tyson argued the putative class members’ claims were not sufficiently similar and thus the case could not be fairly tried on a class basis, because the employees wore varying types of protective gear and spent varying amounts of time donning and doffing that gear. Also, for some workers this donning-and-doffing time would not bring their total hours to over 40 in a week if added to their paid work hours. Plaintiffs’ counsel used an industrial relations expert to perform a time-and-motion observation study on a sample of class members. The expert calculated the average time employees spent donning and doffing within the facility. The study revealed substantial differences in the amounts of time that employees in each department spent donning and doffing. The expert used averages of the various donning-and-doffing times for each department to determine if the employees had worked unpaid overtime. The trial court certified the class, holding the predominant issue was whether the don-and-doff time was compensable under the FLSA, even if not all the workers wore the same gear or spent the same amount of time donning and doffing. It also held, as did the Eighth Circuit on appeal, that the expert’s method of using average times was an acceptable basis to determine class damages because Tyson did not record time spent donning and doffing, and the expert’s approach was
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