Poultry Giants Fixed Worker Wages, Lawsuit Alleges

06:12PM Sep 04, 2019
Class-action suit alleges wage suppression.
( FJ )

A federal class-action lawsuit filed in Baltimore alleges Perdue, Tyson, Pilgrim’s Pride and 15 other poultry-processing giants conspired to suppress worker wages.

The complaint reveals a series of secret meetings at a Florida resort beginning in 2009 where company executives agreed on wage rates for thousands of processing employees. The attendees at the meeting, the suit alleges, were executives of companies that together control 90% of the U.S. chicken market.

“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,” the complaint states.

According to Courthouse News Service, the chicken plant workers brought their suit three months after the Justice Department intervened in another court case where chicken purchaser Maplevale Farm accuses the nation’s top poultry processors of fixing prices, lowering production and sharing data.

“The government requested a six-month break in the case to protect what it described as a grand jury investigation. Last week’s suit from workers represents the vertical-integration trifecta, with the processors accused now of conspiring to control the prices of virtually all inputs and outputs,” Courthouse News reported.

The complaint says the conspiracy started in 2008 with Tyson sharing proprietary wage information with other processors through Agri Stats, an Indiana-based data company with which Tyson had previously ceased doing business. Agri Stats is named as a defendant, as is the management-consultant company WMS.

The complaint alleges the chicken executives met at the Hilton Sandestin Resort Hotel & Spa in Destin, Florida. At these meetings, executives allegedly engaged in roundtable wage-fixing discussions after sharing comprehensive surveys prepared by WMS and Agri Stats on wages and benefits.

The complaint says the three largest processors took turns paying for the annual wage survey, and that any processor that deviated from the conspiracy by making a wage increase not agreed upon in the meeting would face rebuke from the others. In 2018, according to the complaint, one senior executive from Tyson told someone that the Florida meetings “were so inappropriate and improper that that the company would no longer attend them.”

National Chicken Council data shows that the retail price of a broiler chicken increased just 5% from $1.78 per pound to $1.87 during the time period covered by the complaint. This increase is significantly below the rate of inflation. During the same time period, pork increased from $2.92 to $3.74 (28%), and beef went from $4.26 to $5.92 (38%).

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