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Tyson, Pilgrim’s, Hormel to Face Poultry Worker Wage-Fixing Suit

March 11, 2021, 7:13 PM

Tyson Foods Inc., Pilgrim’s Pride Corp., Hormel Foods Corp., and other top poultry processors must face antitrust claims over an alleged industrywide plot to drive down the wages of their largely immigrant workforce, a federal judge in Maryland ruled Thursday.

Judge Stephanie A. Gallagher, who tentatively tossed the case last year, said this time around that the plaintiffs—chicken plant employees paid by the hour—can lead a lawsuit on behalf of all poultry workers, including turkey plant employees and those on salary. They all allegedly felt the scheme’s impact similarly, the judge said.

The suit “sufficiently pled the existence of a singular poultry labor market” affected “by the same exact anti-competitive conduct,” Gallagher wrote. That suggests the “plaintiffs have a sufficient personal stake” in the case, even with respect to “class members from slightly different backgrounds,” she said.

The ruling clears the way for the proposed class action to move forward in the U.S. District Court for the District of Maryland with claims that the poultry processors colluded to depress pay through illegal data exchanges and annual secret meetings at a Florida hotel.

In addition to units of Tyson, Hormel and Pilgrim’s, a JBS SA subsidiary, the suit targets affiliates of Sanderson Farms Inc., Perdue Farms Inc., Cargill Inc., Butterball LLC, Koch Foods Inc., ContiGroup Cos., Mountaire Farms Inc., Simmons Foods Inc., George’s Inc., Fieldale Farms Corp., Peco Foods Inc., and Webber Meng Sahl & Co.

It also names as a defendant Agri Stats Inc., which runs the proprietary agricultural databases the companies allegedly used to launder secret information to one another.

Many of the allegations and defendants overlap with those found in the other cartel cases that have recently battered livestock and protein sectors, including the pork, beef, turkey, tuna, salmon, and egg industries.

Tyson will pay $99 million to settle some chicken price-fixing claims and split a $155 million deal resolving others with Pilgrim’s, which has accepted a $108 million criminal fine. Chicken and tuna executives—among them the ex-CEO of Pilgrim’s—also face prison time.

In addition to letting the overarching wage-fixing suit advance Thursday, Gallagher denied individual bids to escape the case by Sanderson, Mountaire, and Hormel subsidiary Jennie-O Turkey Store Inc. She rejected arguments that the suit failed to tie each of them specifically to the alleged conspiracy.

Though it doesn’t plead that any of them attended all the hotel meetings, claims that representatives of each company attended some meetings make it plausible they participated in the scheme, the judge found.

The poultry processors insist those allegations are untrue, but that’s an issue for later in the case, she said.

Handley Farah & Anderson PLLC, Cohen Milstein Sellers & Toll PLLC, and Hagens Berman Sobol Shapiro LLP are interim co-lead counsel for the plaintiffs, who are also represented by Lockridge Grindal Nauen PLLP, Keller Rohrback LLP, Berger Montague PC, Kramon & Graham PA, Hardin & Hughes LLP, Butler Farm & Ranch Law Group PLLC, Robins Kaplan LLP, the Dampier Law Firm PC, and Shapiro Sher Guinot & Sandler.

Agri Stats is represented by Hogan Lovells US LLP. Butterball is represented by Womble Bond Dickinson (US) LLP. Fieldale is represented by Alston & Bird LLP. Peco is represented by Saul Ewing Arnstein & Lehr and Skadden, Arps, Slate, Meagher & Flom LLP. WMS is represented by Rosenberg Martin Greenberg LLP.

Perdue is represented by Venable LLP. Tyson is represented by Offit Kurman PA and Simpson Thacher & Bartlett LLP. Pilgrim’s is represented by Whiteford Taylor & Preston LLP and Weil Gotshal & Manges LLP. Sanderson is represented by Kirkland & Ellis LLP. Hormel is represented by Faegre Drinker Biddle & Reath LLP. Cargill is represented by Jones Day and Greene Espel PLLP.

Koch Foods is represented by Baker Donelson Bearman Caldwell & Berkowitz PC. Wayne Farms is represented by Proskauer Rose LLP. Mountaire Farms is represented by Rose Law Firm and Sidley Austin LLP. Simmons is represented by Shook Hardy & Bacon LLP and Conner & Winters LLP. George’s is represented by Stinson LLP and the Law Group of Northwest Arkansas.

The case is Jien v. Perdue Farms Inc., D. Md., No. 19-cv-2521, 3/11/21.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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