Around 18 chicken producers in the U.S. are facing a class-action lawsuit alleging that the companies conspired to fix and reduce hourly wages paid to employees at their poultry processing plants, violating federal antitrust laws.
The chicken producers named as defendants named in the lawsuit — which include Tyson Foods Inc., JBS SA unit Pilgrim's Pride Corp. and Perdue Farms Inc. — produces over 90% of the chicken sold in the U.S. and operates approximately 200 chicken processing plants.
Consulting companies Agri Stats Inc. and Webber Meng Sahl and Co. Inc., which facilitated the exchange of compensation data, are also named as defendants in the case.
The lawsuit is accusing the poultry processors of colluding to maximize profit by reducing labor costs. The companies allegedly restrained and limited the wage increase for the workers despite a significant increase in their productivity, and senior executives at these companies allegedly held "off the books" meetings to fix the wages and benefits of the workers to levels materially lower than they would have been in a competitive market.
The defendants also allegedly shared among themselves non-public compensation information obtained from surveys conducted by Agri Stats and Webber Meng Sahl and Co. and used the data to fix and depress workers' compensation.
The litigation was filed on behalf of a class consisting of all non-supervisory production and maintenance staff at the defendants' chicken processing plants in the U.S. from Jan. 1, 2009.
According to the court documents, many of the factory employees recruited and hired by the defendants are migrant workers, refugees, asylum-seekers, immigrants employed under EB3 visas, prison laborers, and participants in court-ordered substance abuse programs.
The case filed on Aug. 30 at the U.S. District Court for Maryland seeks to recover financial damages for the workers and prevent the companies from "continuing their conspiracy."
The defendants contacted by S&P Global Market Intelligence, such as Tyson Foods, Pilgrims Pride and Perdue Farms, did not immediately respond to requests for comment.
Some of the chicken producers named in the case are also involved in a number of other lawsuits over alleged price fixing.
