Law360: Judge Consolidates Wage-Fixing Suits Against Chicken Cos.

Oct 10, 2019

By Celeste Bott

A Maryland federal judge on Wednesday granted a bid by ex-chicken producer employees to consolidate related cases in a proposed class action accusing chicken processing companies of a decadelong conspiracy to fix the wages of hundreds of thousands of workers.

U.S. District Judge Stephanie A. Gallagher also appointed three law firms to serve as interim co-lead counsel: Handley Farah & Anderson PLLC, Cohen Milstein Sellers & Toll PLLC and Hagens Berman Sobol Shapiro LLP.

The first suit was filed in August by two former Tyson employees and a third person who used to work at George's Inc., naming dozens of major poultry processors such as Pilgrim's Pride Corp., Sanderson Farms Inc. and Koch Foods LLC, which they say control 90% of processed chicken production in the U.S. and rake in more than $30 billion annually.

According to the suit, the companies — including processors in Delaware, Illinois and Pennsylvania — have conspired since 2009 to set wages for nearly a quarter-million workers each year in "off-the-books" meetings and through services provided by a unit of Eli Lilly and Co. called Agri Stats Inc. and a consultancy called Webber Meng Sahl and Co. Inc., which does business as WMS and Co. Inc.

They were able to pull off the alleged conspiracy for so long because of the exploitable nature of the poultry industry's typical labor pool, the workers said.

A "virtually identical" complaint was filed in Maryland federal court days later, and Judge Gallagher said it made sense to consolidate the two "given the substantial similarity of the parties and claims."

The workers said top executives at the big chicken companies exchanged nonpublic worker compensation information at seminars and conferences organized by industry trade groups as well as in "off-the-books" meetings at a Hilton resort in Florida. The employees said some of the biggest companies, such as Perdue, Tyson and Pilgrim's, took turns paying for the expenses of the meetings at the Hilton.

This "good old boy system" was bolstered by similar informal information sharing among managers of competing plants, as well as the services provided by Agri Stats and WMS, according to the lawsuits. Those companies took regular compensation and benefits surveys of the various producers and allegedly distributed the data in a way that could be "reverse engineered" to figure out competitors' pay scales.

The workers are suing under the Sherman Antitrust Act on behalf of themselves and anyone else who worked in a nonmanagement production or maintenance position since 2009 at chicken processing plants in the continental U.S. They are seeking unspecified damages as well as fees and costs of the suit.

Representatives for the parties were not immediately available for comment Wednesday.

The plaintiffs are represented by Matthew K. Handley, George F. Farah and William A. Anderson of Handley Farah & Anderson PLLC, Daniel A. Small, Benjamin D. Brown, Brent W. Johnson and Alison S. Deich of Cohen Milstein Sellers & Toll PLLC, and Steven W. Berman, Breanna Van Engelen, Shana E. Scarlett and Rio R. Pierce of Hagens Berman Sobol Shapiro LLP.

Tyson is represented by James E. Edwards Jr. of Baker Donelson Bearman Caldwell & Berkowitz PC.

Pilgrim's Pride is represented by Aaron L. Casagrande of Whiteford Taylor & Preston LLP, and Adam Hemlock, Carrie C. Mahan and Christopher Abbott of Weil Gotshal & Manges LLP.

Sanderson Farms is represented by Robert Shapleigh Ryland, Christa C. Cottrell, Daniel Laytin, Joseph Schroeder and Stacy Pepper of Kirkland & Ellis LLP.

Koch Foods is represented by James E. Edwards Jr., Amy L. Champagne, John Calender, Russell W. Gray, Samuel Gregory, Tonya Kelly Cronin and Scott Pedigo of Baker Donelson Bearman Caldwell & Berkowitz PC.

Harrison Poultry is represented by Gail Lynn Westover, James R. McGibbon and Patricia A. Gorham of Eversheds Sutherland LLP.

Amick Farms is represented by Terri Steinhaus Reiskin and Howard B. Iwrey of Dykema Gossett PLLC.

WMS & Company Inc. is represented by Gerard P. Martin and Jeffrey M. Lichtstein of Rosenberg Martin Greenberg LLP.

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