Justice Department investigates sharing of labor information by chicken companies

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The Justice Department is investigating whether the poultry companies engaged in anti-competitive sharing over employment practices that weighed on the wages of workers at the plant, according to people familiar with the matter.

The Justice Department’s civil investigation examines the actions of several poultry companies, the people said, and adds to the scrutiny that U.S. meat processors face from the government and their workers. The ministry has given notice to at least some companies to keep the documents, several of those people said.

Pilgrim’s Pride Corp.

the second-largest U.S. chicken company by sales volume, recently said in its annual securities filing that it was notified by the Justice Department in February that it had initiated a civil antitrust investigation into human resource issues.

Colorado-based Pilgrim’s said in the filing that it plans to cooperate with the investigation. A company spokeswoman declined to comment further.

A spokeswoman for poultry producer Perdue Farms Inc. confirmed that they received a similar notice. Tyson Foods Inc.,

the largest U.S. meat processor by sales, declined to comment. Other poultry processors, such as George’s Inc. and Sanderson Farms Inc.,

declined to comment.

A Justice Department spokeswoman declined to comment. It is too early to know if the investigation, in its preliminary stages, will lead to action by the ministry.

The Justice Department has extensively reviewed alleged antitrust issues in the U.S. meat industry for several years, ranging from accusing chicken executives of price-fixing to examining the operations of meat packers. in the beef market. The Biden administration has alleged that the US meat industry is using its scale to inflate Americans’ food bills, and farming groups have accused meat companies of using their market power to keep livestock prices down. artificially low.

The Department of Justice has extensively scrutinized alleged antitrust issues in the US meat industry for years.


Photo:

Jason Szenes/EPA-EFE/Shutterstock

Meat industry officials said prices for consumers and farmers have been hit by major disruptions to processing plant operations in recent years, including a fire at a large beef plant and Covid-19 infections among workers at processing plants that led to a wave of temporary closures in the spring of 2020. More recently, meatpackers said labor shortages limited production , limiting the amount of livestock they can buy and the amount of meat they can produce for supermarkets and restaurants.

The new investigation into employment communications from poultry companies comes as the Justice Department has placed greater emphasis in recent years on challenging alleged anti-competitive behavior it sees as limiting opportunities and compensation in markets. work. Recent cases include challenges to alleged practices in the aerospace and healthcare industries, such as alleged agreements between employers not to hire each other’s workers.

The Justice Department has stepped up the pressure by taking some criminal cases, alleging employers have engaged in outright illegal deals to limit wages and hiring. Civilian inquiries, such as the latest poultry industry inquiry, tend to look at alleged behavior that is less explicit.

In public guidance documents for employers, the department said sharing information with competitors about terms and conditions of employment can result in civil antitrust liability even if there is no explicit agreement between them. competing employers.

Chicken companies face private litigation over similar issues.

The meat industry is grappling with a nationwide labor shortage that it says has left many processing plants understaffed.


Photo:

Dave Schwarz/St. Cloud Times/Associated Press

Chicken plant workers have alleged in lawsuits that their employers conspired to swap compensation data to maintain employee wages at poultry processing complexes, factories, hatcheries and feed mills for animals for more than two decades. Plaintiffs in a pay case in federal court in Maryland allege industry officials used data exchanges and annual events to compare pay numbers.

This civil lawsuit brought by workers at the plant targets more than 20 defendants who represent about 90% of the poultry sold to consumers in the United States, as well as two consulting companies that allegedly helped exchange compensation data.

The Maryland complaint alleges that senior executives, including human resources managers and compensation directors, held meetings at a hotel in Florida during which they exchanged information on salaries, wages and benefits. workers.

The defendants denied there was a conspiracy and said the workers’ wages were not affected. Several defendants, including Pilgrim’s and George’s, settled with the plaintiffs without admitting guilt.

The meat industry is facing a nationwide labor shortage that has left many processing plants understaffed and unable to keep pace, which officials say industry, leads to higher prices and shortages of certain products. Meat companies have said in recent months that workers’ wages and benefits are rising as U.S. meat packers try to meet growing demand from supermarkets and restaurants.

Separately, several executives from some of America’s largest chicken producers are on trial for the second time on federal charges of illegally coordinating with each other what their companies would charge major buyers of chicken products at restaurants. Among those charged are former Pilgrim’s Pride CEOs Jayson Penn and Bill Lovette.

The government’s criminal case against the 10 former poultry executives previously ended in a mistrial in December after jurors failed to reach consensus on a verdict after days of deliberation.

All defendants have pleaded not guilty. They argue that sharing price information is not illegal and that the government could not prove that the defendants participated in a large conspiracy.

Major supermarket operators and foodservice distributors have separately filed civil lawsuits alleging anti-competitive pricing behavior among meat suppliers. Chicken suppliers in court pushed back, pointing to market factors they say drove up poultry prices. Some chicken farmers have reached agreements with poultry buyers to settle civil lawsuits.

Write to Patrick Thomas at [email protected] and Brent Kendall at [email protected]

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