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Financial Services Law Insights and Observations


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  • Federal Judge Blocks Dept. of Labor Overtime Rule from Taking Effect Next Week


    On November 22, a federal judge in Texas issued a nationwide preliminary injunction blocking the enactment of the Department of Labor's (DOL’s) new overtime salary threshold under the Fair Labor Standards Act. In his order—issued in response to a lawsuit brought by 21 states and several business groups—Judge Amos L. Mazzant, III noted that the DOL does not have the authority to utilize a salary-level test or an automatic updating mechanism. By granting the preliminary injunction, the judge has delayed the rule (which was set to take effect on December 1) from becoming effective until further legal proceedings may occur. Plaintiffs’ motion for summary judgment, which seeks to invalidate the final rule, has already been briefed.

    Courts Fair Labor Standards Act

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  • Supreme Court Affirms Certification of a Class Under Fair Labor Standards Act

    Consumer Finance

    On March 22, the U.S. Supreme Court affirmed the certification of a class under the Fair Labor Standards Act. In so doing, the Court permitted Plaintiffs' use of expert evidence regarding a representative sample of the class to establish liability regarding the entire class. Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146 (U.S. Mar. 22, 2016). In Tyson, the plaintiff employees, who worked at the kill, cut, and retrim departments of a pork processing plan, argued that the donning and doffing of certain protective gear was integral and indispensable to their work, and the defendant company’s policy to not pay for those activities violated the Fair Labor Standards Act. Because the company did not keep records of the amount of time it took employees to don and doff their protective gear, the employees primarily relied upon a sampling study performed by an expert to estimate this time frame. While the defendants did not file a Daubert challenge to this evidence, it did argue that the use of this sampling evidence was improper because the underlying question – how long it took employees in a meat packing plant to don and doff protective gear – required individual determinations that would predominate over common questions of fact. In permitting the use of the evidence, the Court stated that “[b]ecause a representative sample may be the only feasible way to establish liability, it cannot be deemed improper merely because the claim is brought on behalf of a class. [Plaintiffs] can show that [their expert’s] sample is a permissible means of establishing hours worked in a class action by showing that each class member could have relied on that sample to establish liability had each brought an individual action.” The Court did caution that Tysons did not present an “occasion for adoption of broad and categorical rules governing the use of representative and statistical evidence in class actions.” Instead, it stated that “[whether] and when statistical evidence can be used to establish classwide liability will depend on the purpose for which the evidence is being introduced and on ‘the elements of the underlying cause of action.’” The Court did not reach the substance of the second issue of the case, whether a class action or collective action may be certified or maintained when the class contains members who are not injured.

    Fair Labor Standards Act

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