Per the agreement, Tyson will gradually modify timekeeping practices at its poultry plants and certain prepared foods plants over the next two-and-half years. It will provide eight or 12 minutes of extra pay per shift on an interim basis to certain hourly processing line workers. By December 2012, the company will implement a more permanent modification, making arrangements for workers to “clock in” before they put on certain clothing items and “clock out” after the clothing items are taken off.
On June 3, Tyson and the government filed a joint motion in federal court to resolve a May 2002 D.O.L. lawsuit, which sought back wages at the company’s Blountsville, Ala. poultry plant and prospective injunctive relief at the company’s other poultry processing facilities. The D.O.L. alleged the company violated federal law by not paying overtime compensation to workers for putting on and taking off certain sanitary and protective clothing before and after their production shifts.
Company officials denied any wrongdoing and said the case is an example of an ongoing, nationwide legal debate over what types of activities are compensable under the Fair Labor Standards Act.
Tyson said its position was almost completely vindicated in November 2009 when a federal jury in Birmingham, Ala. found no evidence of a recordkeeping violation by the company and awarded only $250,000 of the $8 million the D.O.L. requested for workers at the Blountsville plant. The money was meant to compensate 3,000 workers for overtime wages over a 10-year period.
The company and D.O.L. negotiated the resolution, which was filed in court on June 3.
“We value our employees and like other business across the country, have strived to comply with federal wage and hour laws that are not precise in their description of what activities are compensable,” said Ken Kimbro, senior vice president human resources for Tyson Foods. “We’ve decided to resolve this case and modify our pay practices for certain jobs in order to avoid the continued expense and disruption of further litigation.”
The changes in pay practices are expected to affect between 33 and 47 Tyson plant locations across the country and as many as 38,000 employees. Company poultry workers who are represented by a union will not be affected by the interim measures. However, the unions may choose to accept the post-December 2012 system if they “opt-in” during the next 60 days.
Tyson will also pay $500,000 to resolve all monetary and injunctive relief issues in the case, including all claims for back pay, as part of the agreement. The D.O.L. will distribute the payments to an estimated 3,000 current and former Blountsville workers. The payments will range in value from $1 up to about $2,500, before legally-required withholdings.
The agreement between Tyson and the D.O.L. will take effect on June 8 if approved by the U.S. District Court in the Northern District of Alabama.