Perdue, Tyson Among Chicken Producers Accused of Conspiring to Suppress Employee Wages [UPDATE]

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A collective of the largest chicken producers in the industry has been hit with a proposed class action lawsuit centered on an alleged conspiracy among the companies to fix wages and suppress competition among their non-supervisory production and maintenance employees.

“Since January 1, 2009, Defendants have conspired to fix and depress the hourly wages and benefits paid to Class Members,” the case out of Maryland district court claims. “Defendants have engaged in this unlawful conspiracy to maximize their profits by reducing labor costs, which have comprised a substantial share of each Defendant Processor’s total operating costs.”

According to the lawsuit, producers such as Perdue Farms, Tyson Foods, Pilgrim’s Pride, and Koch Foods have shared confidential and non-public wage and benefits information with each other through several avenues in order to unlawfully depress workers’ wages and prevent turnover. The case claims the defendants’ senior executives frequently held “off the books” meetings at a Hilton hotel in Florida during which they discussed and fixed the wages of their non-supervisory production and maintenance employees. Similarly, sensitive information, including data on future wages and benefits, was shared at a local level between processing plant managers at competing plants that operated in the same region, the suit says.

The lawsuit alleges that the chicken processors, who the case says control 90 percent of the processed chicken market and own roughly 200 plants nationwide, also engaged co-defendants Agri Stats, Inc. and Webber, Meng, Sahl and Company, Inc. to help share private information. According to the case, the two contractors collected detailed hourly wage rate data through surveys conducted at each processing plant and compiled the numbers in supposedly anonymous reports that allowed the processor defendants to compare pay rates. As the lawsuit tells it, though the wage data collected by the contractors was supposedly anonymous, enough detail could be derived to match certain wage statistics with certain processing plants.

“While Agri Stats claims the distributed data is anonymous, the data is sufficiently granular and disaggregated that executives of Defendant Processors could and did easily and precisely match all the distributed wage data with specific chicken processing plants owned by specific Defendant Processors in specific regions,” the complaint reads.

This alleged data sharing, according to the case, allowed the processor defendants to provide “highly restrained and limited” wages and benefits to plant workers even while productivity and line speed steadily increased. The lawsuit states that despite the close proximity of rival plants, which should have allowed for a high level of employee competition, workers’ wages and benefits remained stagnant:

“Because each Defendant Processor pays the same, or nearly the same, wages and benefits to its to non-supervisory production and maintenance employees at chicken processing plants regardless of geographic region, conduct that suppresses compensation to those non-supervisory production and maintenance workers in one chicken processing plant location would necessarily suppress compensation to non-supervisory production and maintenance workers in all of the Defendant Processor’s chicken processing plants in all the geographic regions of the continental United States.”

The lawsuit argues that the defendants’ allegedly anticompetitive conduct has harmed production and maintenance workers, who the case points out are often recruited from marginalized populations and have limited alternative options for employment.