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Tyson Foods Responsible for $5 Million in Class Action Suit

  • Oct 4, 2013
  • Staff
  • Newly Filed / Newly Settled

Tyson Foods was ordered to pay nearly $5 million in damages on Wednesday after losing a class action suit filed by employees who sought compensation for unpaid wages. The workers claimed that they were paid on a “gang time” system, meaning that they only received compensation for the time they spent at the production line. The company allegedly did not pay workers for the time it took to dress and undress in required protective gear (called donning and doffing) or time spent walking to and from the production line. Earlier in the litigation, the judge ruled that such activities were compensable.

The treasurer will distribute the remaining balance to the common school fund.

Both sides were responsible for providing calculations for damages, although the judge ruled to adopt the calculations presented by the plaintiffs’ expert. The judge called the defendant’s damages proposal “yet another attempt by Tyson to skirt its obligations…to record and pay its employees for actual time.” Although the order was for $5 million, the plaintiffs are only eligible to receive $3.3 million – representing compensatory and liquidated damages - under the Fair Labor Standards Act because punitive damages are not allowed under the Nebraska constitution. Since the remaining balance of roughly $1.6 million is covered by the Nebraska Wage Payment and Collection Act, but not by the FLSA, it must be paid to the state’s treasurer, under Nebraska law. According to the judge, the treasurer will distribute the remaining balance to the “common school fund.” The court also ruled that the plaintiffs could collect attorneys’ fees at a later date.

The class action lawsuit represents over 8,000 Tyson employees whose complaints stretch back to 2004. However, this is not the first time Tyson has faced lawsuits over unpaid wages. In 2005, Tyson was sued by its workers over the same allegations, and the Supreme Court ruled that the same activities – donning and doffing, and walking to and from the production line – were considered compensable time.