KANSAS CITY – Poultry processors are facing more litigation — this time on allegations of fixing the wages of the companies’ workers.
A class-action lawsuit filed in US 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 hundreds of thousands of workers. Agri Stats Inc. and Webber, Meng, Sahl and Co. Inc. (WMS) also are named as defendants in the lawsuit for allegedly facilitating the exchange of compensation data, according to court documents.
Specifically, the complaint alleges that 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 held recurring clandestine meetings at the Hilton Sandestin Resort Hotel & Spa in Destin, Florida. These meetings often coincided with the US Poultry & Egg Association’s (USPOULTRY) annual Human Resources Seminar but were not part of USPOULTRY’s published schedule or any other association’s published schedule. During these meetings, according to court documents, 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 lawsuit alleges that in-person meetings occurred during other meetings sponsored by industry organizations such as the National Chicken Council (NCC), 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 WMS. “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,” court documents state. “Similarly, WMS 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.”
Events such as NCC’s Chicken Media Summit and other plant tours also served as venues for “off-the-books” discussions of labor practices, according to court documents. NCC said the organization is no a party to the lawsuit and declined to comment on the matter.
Finally, plant managers exchanged wage and benefits information which 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 court documents. “Those plant-to-plant exchanges of wage and benefits information were conducted through various mediums, including telephone calls and surveys disseminated through electronic listservs.”
Bill See, a spokesman for Perdue, 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.
“Our recruiting efforts target the entire community,” See added. “The population of our manufacturing workforce is representative of the communities where our plants are located. 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 lawsuit claims that the conspiracy to depress wages left many poultry workers in poverty. Citing a 2015 report by the nonprofit Oxfam America, the complaint states that wages for poultry processing line workers average around $11 per hour. Annual income for most workers is between $20,000 and $25,000. “The federal poverty level for a family of three in 2015 is $20,090; for a family of four it’s $24,250,” according to court documents. “An average poultry worker supporting two children qualifies for Head Start, SNAP (food stamps), and the National School Lunch Program.”
Many Americans have no interest in jobs on poultry processing lines, so many of the workers recruited and hired by processors are “marginalized populations” — including “…migrant workers, refugees, asylum-seekers, immigrants employed under EB3 visas, prison laborers, and participants in court-ordered substance abuse programs.” — that may be vulnerable to exploitation, the lawsuit states.
“Working in a chicken processing plant is grueling and extremely dangerous,” said George Farah, a partner at Handley Farah & Anderson PLLC, which filed the lawsuit along with two other law firms on behalf of the plaintiffs Judy Jien, Keio Jibidi and Elaisa Clement. “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.”
The plaintiffs in the case are seeking to prevent the companies from continuing the conspiracy in addition to pre- and post-judgment interest, treble damages, court costs and attorneys’ fees.