KANSAS CITY – Poultry processors, already enmeshed in court proceedings and a federal investigation arising from complaints they conspired to raise poultry prices (see Food Business News of July 9), are facing more litigation — this time on allegations of fixing the wages of the companies’ workers.
A class-action lawsuit filed on Aug. 30 in the U.S. District Court for the District of Maryland accuses 18 poultry processors, including Tyson Foods Inc., Perdue Farms, Sanderson Farms Inc., Pilgrim’s Pride Corp. and Case Foods, of conspiring to fix and depress wages and other compensation paid to an estimated 250,000 workers employed by the poultry processing industry.
As in the price-fixing case, Agri Stats Inc., Fort Wayne, Ind., a subscription-only information provider owned by Eli Lilly and Company, was named as a co-defendant and co-conspirator in the wage-fixing suit. Additionally, Webber, Meng, Sahl and Co. Inc. (W.M.S.), Pottstown, Pa., a business management consulting company that provides survey-based information on worker compensation, also was named a co-defendant and co-conspirator.
Specifically, the complaint alleges the poultry companies have conspired to fix workers’ wages since 2009 and carried out the conspiracy in three ways.
First, senior executives with the companies, including human resources and compensation directors, held recurring “off-the-books” meetings at the Hilton Sandestin Resort Hotel & Spa in Destin, Fla. The meetings often coincided with the U.S. Poultry & Egg Association’s (U.S.P.E.A.) annual Human Resources Seminar but were not part of the group’s published schedule or any other association’s published schedule.
During these meetings, according to the lawsuit, the executives “... exchanged information about, discussed, agreed upon and ultimately fixed the wages and benefits of class members at artificially depressed levels. These ‘off-the-books’ meetings between senior executives of the defendant processors responsible for determining the compensation of class members involved such brazen wage-fixing that at least one defendant processor recently stopped attending.”
Additionally, the suit alleges in-person meetings occurred during other meetings sponsored by industry organizations such as the National Chicken Council (N.C.C.), the Georgia Poultry Federation and other trade groups.
Second, the companies exchanged detailed non-public wage and benefits information through surveys conducted by Agri Stats and W.M.S.
“Each defendant processor subscribed to and partnered with Agri Stats to exchange and receive — on a monthly basis — effective hourly wage rates regarding categories of chicken processing plant workers from each defendant processor’s plants,” the suit alleged.
“Similarly, W.M.S. conducted a detailed annual survey of the hourly wages and benefits paid by each defendant processor to each category of chicken processing plant worker and circulated the survey results to senior executives of the defendant processors during in-person meetings,” the complaint charged.
Events such as N.C.C.’s Chicken Media Summit and other plant tours also served as venues for “off-the-books” discussions of labor practices, according to plaintiffs. The N.C.C. said the organization is not a party to the lawsuit and declined to comment.
Finally, plant managers exchanged wage and benefits information that later was provided to executives who used the information to fix workers’ compensation, according to the lawsuit.
“Those managers frequently reached out directly to their counterparts at competitors’ chicken processing plants to request and exchange wage and benefits data, including data regarding plans for future wages and benefits,” according to plaintiffs. “Those plant-to-plant exchanges of wage and benefits information were conducted through various mediums, including telephone calls and surveys disseminated through electronic listservs.”
George Farah, a partner at Handley Farah & Anderson P.L.L.C., which filed the lawsuit along with two other law firms on behalf of the plaintiffs, said, “Working in a chicken processing plant is grueling and extremely dangerous. Under normal circumstances, chicken producers would have to compete for workers by offering higher wages and superior benefits. Instead, these corporations have violated the antitrust laws to depress the compensation provided to their workers, leaving thousands of them in poverty.”
Bill See, a spokesman for Perdue Farms, said the lawsuit is without merit.
“Our compensation philosophy is to pay fair and in some cases above-average wages to our plant associates,” he said. “Our total rewards compensation program consists of a salary, benefits and discretionary bonuses.
“We do, just as other companies do, participate in national benchmark surveys with food and other consumer product goods companies to ensure we can attract top talent. Our associates receive annual wage increases, and as wage trends continue to shift in the United States, we have made additional adjustments where necessary.”
The plaintiffs in the case are asking the court to enjoin the companies from continuing the alleged conspiracy. The suit also requests the court to award workers damages from each defendant in an amount to be determined, and that the damages amount be trebled. The plaintiffs also requested pre- and post-judgment interest related to the damages as well as court costs and attorneys’ fees.