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Poultry Producers Run Afoul of DOJ: Agree to Pay $85M in Settlement over Wage-Fixing Claims

Earlier this week the U.S. Department of Justice (the “DOJ”) announced it had reached a nearly $85 million settlement with Cargill Inc. and several other poultry producers for an alleged wage-fixing scheme designed to keep wages artificially low.  None of the poultry producers admitted guilt or wrongdoing in their settlements.

The parties involved are Cargill, Wayne Farms LLC, Sanderson Farms Inc., WMS Webber Meng Sahl & Co. (“WMS”).  WMS is not an employer but a data consulting firm accused of facilitating the sharing of data on wages and benefits of the plant workers among the various poultry producers.

In announcing the settlement, the DOJ’s Antitrust Division Principal Deputy Assistant Attorney issued the following statement, “Through a brazen scheme to exchange wage and benefit information, these poultry processors stifled competition and harmed a generation of plant workers who face demanding and sometimes dangerous conditions…. Today’s action puts companies and individuals on notice, the Antitrust Division will use all of its available legal authorities to address anticompetitive conduct that harms consumers, workers, farmers and other American producers.”  

As part of the settlement the poultry processors will be barred from “sharing competitively sensitive information” on plant workers’ compensation. Additionally, the poultry producers have agreed to a 10-year compliance plan with regular monitoring and inspections by the DOJ and will collectively pay nearly $85 million. As for WMS and its president, they are to be barred from providing similar services, which includes the sharing of competitively sensitive information, to any industry.

It is important for our readers to note that this settlement represents just one more example in a series of pro-labor enforcement initiatives by the DOJ to combat anti-competitive deals restricting workers’ rights.  In fact, the DOJ warned they are still conducting a broader investigation into anticompetitive labor market abuses in the poultry processing industry.  Another example of the DOJ’s recent pro-labor enforcement initiative can be seen in last week’s statement of interest it filed in a workers’ antitrust lawsuit against competing employers using no poach agreements in the trucking industry, calling the practice per-se illegal.

As one can see just from these few examples, the Biden Administration’s DOJ is taking a much more pro-labor stance than Trump’s.  Now is a good time to review your business practices.

Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560