On August 30, 2019, the law firm Handley Farah & Anderson PLLC, along with the law firms Cohen Milstein Sellers & Toll PLLC and Hagens Berman Sobol & Shapiro LLP, filed a class action lawsuit against the leading chicken producers in the United States for allegedly conspiring to fix and depress the compensation paid to hundreds of thousands of workers at chicken processing plants.
The defendants named in the lawsuit include 18 chicken producers (“Defendant Chicken Producers”)—such as Tyson Foods, Inc., Pilgrim’s Pride Corporation, and Perdue Farms, Inc.—that produce more than 90 percent of the chicken sold in the United States. Two consulting companies that facilitate the exchange of compensation data—Agri Stats, Inc. (“Agri Stats”) and Webber, Meng, Sahl and Company, Inc. (“WMS”)—are also named as defendants in the lawsuit.
The Defendant Chicken Producers operate approximately 200 chicken processing plants in the continental United States. These plants employ hundreds of thousands of workers who process live chickens into poultry products sold to retailers and consumers. The workers occupy various positions along processing lines, from hanging live chickens to slaughtering the birds to slicing meat from the bones to repairing the processing machines. The Defendant Chicken Producers compensate those workers with hourly wages and employment benefits.
The lawsuit alleges that, since January 1, 2009, the defendants have conspired to fix and depress the hourly wages and benefits paid to workers in chicken processing plants in violation of the federal antitrust laws. The lawsuit alleges that the Defendant Chicken Producers have engaged in this unlawful conspiracy to maximize profits by reducing their labor costs.
The lawsuit alleges that the defendants formed, implemented, monitored and enforced the conspiracy in three ways. First, the lawsuit alleges that senior executives of the Defendant Chicken Producers held recurring “off the books” in-person meetings at the Hilton Sandestin Resort Hotel & Spa in Destin, Florida, during which they exchanged information about, discussed, agreed upon and ultimately fixed the wages and benefits of workers in chicken processing plants at artificially depressed levels.
Second, the lawsuit alleges that, on a highly frequent basis, the Defendant Chicken Producers exchanged detailed, current and non-public wage and benefits information through surveys conducted by Agri Stats and WMS. The lawsuit alleges that Defendant Chicken Producers used the competitively sensitive data obtained from those surveys to fix and depress the compensation paid to workers in chicken processing plants and ensure that no conspirator deviated from the conspiracy.
Third, the lawsuit alleges that local managers of the Defendant Chicken Producers’ plants exchanged compensation information. The lawsuit alleges that those plant managers frequently reached out to counterparts at rival chicken processing plants to request and exchange wage and benefits data, including data regarding plans for future wages and benefits. The lawsuit alleges that the data obtained from these plant-to-plant information exchanges was provided to executives of the Defendant Chicken Producers, who used the data to help fix compensation.
The lawsuit alleges that the intended and actual effect of defendants’ conspiracy has been to reduce and suppress the wages and benefits paid to workers in chicken processing plants to levels materially lower than they would have been in a competitive market. As a result, the lawsuit alleges that even while worker productivity and processing line speeds increased significantly over the past decade, wage increases provided to workers in chicken processing plants were highly restrained during that period.
“Working in a chicken processing plant is grueling and extremely dangerous,” said George Farah, a partner at Handley Farah & Anderson PLLC. “Under normal circumstances, chicken producers would have to compete for workers by offering higher wages and superior benefits. But instead, we believe these corporations have violated the antitrust laws to depress the compensation provided to their workers, leaving thousands of them in poverty.”
The lawsuit was filed on behalf of a class consisting of all persons employed by the Defendant Chicken Producers as non-supervisory production and maintenance employees at chicken processing plants in the continental United States from January 1, 2009 until the present. The lawsuit seeks to prevent the defendants from continuing their conspiracy and to recover financial damages for the class of workers.
The complete list of defendants named in the complaint is: Perdue Farms, Inc.; Perdue Foods LLC; Tyson Foods, Inc.; Tyson Prepared Foods, Inc.; The Hillshire Brands Company; Tyson Fresh Meats, Inc.; Tyson Processing Services, Inc.; Tyson Refrigerated Processed Meats, Inc.; Keystone Foods, LLC; Equity Group Eufaula Division, LLC; Equity Group—Georgia Division, LLC; Equity Group Kentucky Division, LLC; Pilgrim’s Pride Corporation; Pilgrim’s Pride Corporation of West Virginia, Inc.; Sanderson Farms, Inc.; Sanderson Farms, Inc. (Foods Division); Sanderson Farms, Inc. (Processing Division); Koch Foods, Inc.; JCG Foods of Alabama, LLC; JCG Foods of Georgia, LLC; JCG Industries, Inc.; Koch Foods LLC; Koch Foods of Alabama, LLC; Koch Foods of Ashland, LLC; Koch Foods of Gadsden LLC; Koch Foods of Cumming LLC; Koch Foods of Gainesville LLC; Koch Foods of Mississippi LLC; Wayne Farms, LLC; WFSP Foods, LLC; Mountaire Farms, Inc.; Mountaire Farms of Delaware, Inc.; Peco Foods, Inc.; Simmons Foods, Inc.; Simmons Prepared Foods, Inc.; Fieldale Farms Corporation; George’s, Inc.; Ozark Mountain Poultry, Inc.; George’s Chicken, LLC; George’s Foods, LLC; George’s Processing, Inc.; House of Raeford Farms, Inc.; House of Raeford Farms of Louisiana, LLC; O.K. Foods, Inc.; Harrison Poultry, Inc.; Mar-Jac Poultry, Inc.; Mar-Jac Poultry MS, LLC; Mar-Jac Poultry AL, LLC; Mar-Jac Poultry, LLC; Mar-Jac Holdings, Inc.; Amick Farms, LLC; Case Foods, Inc.; Case Farms Processing, Inc.; Allen Harim Foods, LLC; Agri Stats, Inc.; and Webber, Meng, Sahl and Company, Inc.
A copy of the complaint is available HERE.
For more information about the lawsuit, contact George Farah at [email protected] or 212-477-8090.