Feds Sue Poultry Producers for Unfair Labor Practices

WASHINGTON — The Justice Department is expected to file a lawsuit against some of the largest U.S. poultry producers along with a proposed settlement to end what it says have long been deceptive and abusive practices for workers. weather.

The lawsuit was filed in federal court in Maryland and named Cargill, Sanderson Farms and Wayne Farms, along with a data consulting firm known as Weber, Meng, Sahl and Co., according to three people familiar with the matter. The people were unable to publicly discuss specific details of the lawsuit before the filing was made public and spoke to The Associated Press on condition of anonymity.

In its lawsuit, the Justice Department alleges that the companies have engaged in a multiyear conspiracy to exchange information about workers’ wages and benefits at poultry processing plants to reduce employee competition in the market, the people said. The companies did not immediately respond to messages seeking comment.

The government contends the data consulting firm helped share workers’ compensation information with companies and their executives, the people said. By carrying out the scheme, officials allege, companies were able to compete less intensely for workers and reduce the amount of money and benefits they had to offer their employees, suppressing competition for poultry processing workers. across the board, the people said.

The defendants and anonymous co-conspirators in the lawsuit account for the hiring of about 90% of all chicken processing jobs in the nation, one of the people said.

The lawsuit is the latest example of the Justice Department’s antitrust enforcement targeting companies the government believes are behaving anticompetitively to stifle workers or harm consumers. It also comes as the department continues a broader investigation into labor abuses in the poultry industry.

The lawsuit is filed with a proposed consent decree, an agreement that would require the companies to pay $84.8 million in restitution to workers harmed by the illegal information-sharing ring, the people said.

The deal would also establish a federal monitor selected by the Justice Department to ensure compliance for the next decade. The consent decree would also allow Justice Department attorneys and investigators to inspect poultry processors’ facilities and interview their employees to make sure they are complying with terms, the people said.

The suit comes as Cargill and Continental Grain, of which Wayne Farms is a subsidiary, formed a joint venture to acquire Sanderson Farms, paying $203 per share in cash for a company that last year processed more than 4.8 billion pounds of meat. .

The companies plan to combine Sanderson Farms with Wayne Farms to form a new private poultry business. Operations will include poultry processing plants and prepared food plants in Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas.

Wayne Farms has more than 9,000 employees. It manufactures products under brand names including Wayne Farms fresh and prepared chicken, Platinum Harvest premium fresh chicken, Chef’s Craft gourmet chicken, Naked Truth premium chicken and Ladybirdy premium chicken.

Headquartered in Laurel, Mississippi, Sanderson Farms has 17,000 employees and 12 plants. It processes 13.6 million chickens per week.

The proposed consent decree would also resolve allegations that Sanderson Farms and Wayne Farms treated chicken farmers unfairly by using a system that reduced wages for poor performance.

Farmers sign contracts to raise chickens, and processing companies provide the birds and feed. Their pay is then determined by how well the farmers perform compared to other chicken farmers. The Justice Department alleges that the companies’ use of that compensation method, known as the “tournament system,” resulted in them failing to provide farmers with information to assess and manage their financial risk.

Chicken farmers typically sign long-term contracts with meat companies that farmers say force them to sign agreements that set their compensation at unprofitable low levels.

As part of that settlement, Sanderson Farms and Wayne Farms would be prohibited from reducing base payments to chicken farmers as a way to penalize them for poor performance, the people said. However, the consent decree would allow companies to offer incentives and bonuses to growers, according to the people.

The proposed consent decree will be filed as part of the lawsuit on Monday. Under federal law, the proposal would also be published in the Federal Register and there would be a 60-day period for people to submit comments to the Justice Department before a court could accept and finalize the settlement.

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