Lawsuit against US poultry producers alleges unfair and abusive worker practices

WASHINGTON (AP) — The Justice Department filed a lawsuit Monday against some of the largest poultry producers in the United States, along with a proposed settlement aimed at ending what it claims are practices misleading and abusive for workers.

The lawsuit, filed in federal court in Maryland, names Cargill, Sanderson Farms and Wayne Farms, as well as a data consulting firm known as Webber, Meng, Sahl and Co. and its chairman.

In its lawsuit, the Department of Justice alleges that the companies engaged in a multi-year conspiracy to exchange information on wages and benefits of workers in poultry processing plants in order to reduce competition for employees in the market. . The companies did not immediately respond to messages seeking comment.

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The government says the data consultancy has helped share workers’ compensation information with companies and their executives. By implementing the program, officials said, companies were able to compete less intensely for workers and reduce the amount of money and benefits they had to offer their employees, removing competition for workers from poultry processing at all levels, according to court documents.

The unnamed defendants and co-conspirators in the lawsuit account for about 90% of all chicken processing jobs in the country.

The lawsuit is the latest example of the Justice Department’s antitrust enforcement targeting companies that the government says engage in anticompetitive behavior to stifle workers or harm consumers. It also comes as the ministry pursues a wider investigation into labor abuses in the poultry industry.

“Through a brazen wage and benefits information-sharing ploy, these poultry processors have stifled competition and hurt a generation of factory workers who face demanding and sometimes dangerous conditions for make a living,” said Doha Mekki, senior assistant deputy attorney general for justice. Department’s Antitrust Division.

The lawsuit against the companies was filed with a draft consent decree – a settlement that would force the companies to pay $84.8 million in compensation for workers who were harmed by the illegal information-sharing network .

The regulations would also put in place a federal comptroller selected by the Department of Justice who would ensure compliance for the next decade. The consent decree would also allow attorneys and Justice Department investigators to inspect poultry processors’ facilities and interview their employees to ensure they are following the terms, according to court documents.

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The lawsuit 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 (2.2 billion kilograms) 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 across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas.

Wayne Farms has over 9,000 employees. It manufactures products under brands such as Wayne Farms Fresh and Prepared Chicken, Platinum Harvest Premium Fresh Chicken, Chef’s Craft Gourmet Chicken, Naked Truth Premium Chicken and Ladybird Premium Chicken.

Based 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 their pay for poor performance.

Farmers sign contracts to raise the chickens and processing companies provide the birds and feed. The farmer’s salary is then determined by their performance compared to other chicken farmers. The Department of Justice alleges that the companies’ use of this method of compensation, known as the “tournament system”, has resulted in their failure to provide information to farmers to assess and manage their financial risk.

Typically, chicken farmers make long-term contracts with meat companies that farmers say lock them into agreements that set their compensation at unprofitable levels.

Under the settlement, Sanderson Farms and Wayne Farms would be prohibited from reducing base payments to chicken farmers to penalize them for underperformance. The consent decree, however, would allow companies to offer incentives and bonuses to producers.

The proposed consent decree with the poultry companies and the one with the data company were filed in court on Monday. Under federal law, the proposals would also be published in the Federal Register and there would be a 60-day period to send comments to the Justice Department before a court could accept and finalize the agreements.


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