Red Meat Processors Conspiracy to Suppress Workers’ Pay Class Action

Conspiring to hold down wages is illegal, and this antitrust class action alleges that certain red meat processors have been doing exactly that. The defendants include well-known companies like JBS USA Food Company, Tyson Foods, Inc., and Hormel Foods Corp., which together produce around eighty percent of the beef and pork sold to consumers in the US. Additional defendants include Agri Stats, Inc. and Webber, Meng, Sahl & Company (WMS & Company), consulting firms which helped the companies exchange data on compensation for hourly and salaried employees.

The class for this action is all persons employed by the defendant processors in this case or their subsidiaries or related entities at beef-processing or pork-processing plants in the continental US, between January 1, 2014 and the present.

The defendants have around 140 red meat processing plants in the continental US, the complaint alleges, with workers performing slaughtering, aging, cutting, and processing, repairing processing machines, and supervising processing lines.

The workers’ hourly pay or annual salaries and the benefits they receive, the complaint says, are determined and approved by senior executives at corporate headquarters. The complaint alleges, “This highly regimented process for determining compensation allowed Defendant Processors to compare compensation practices—and collectively suppress compensation—across their workforces.” The complaint claims they used a number of means to do this.

Executives designed a Red Meat Compensation Survey for the participating processors to complete every year, the complaint claims, detailing current pay and benefits for different categories of workers, as well as projected future pay and benefits and their timing.

Also, the complaint alleges, the conspirators hired WMS, a consulting firm specializing in compensation, to administer the survey “in order to confer a veneer of legality on Defendant Processors’ illicit information exchange.” The complaint claims that Jonathan Meng of WMS warned them that the exchange was not in keeping with federal antitrust laws.

Another tool they used, according to the complaint, was secret annual in-person meetings for executives. The complaint alleges that Meng generally gave a speech at the beginning of the meetings, but that the companies then dismissed him and continued the meetings privately.

The complaint claims, “Meng confirmed that the reason Defendant Processors needed a ‘consultant in the room’ was to appear to comply with the antitrust laws.” But it was at the later, confidential meetings, the complaint claims, and at more informal meetings held around them, that the executives “reached agreements about optimal and future compensation rates and practices.”

Senior executives also had direct communications, the complaint says, in which they “extensively discussed, compared, and in turn further suppressed compensation through email and phone communications.”

The complaint alleges pork processors also exchanged nonpublic compensation information through Agri Stats, partly to confirm that the other pork conspirators were sticking to the agreements.

Another way they suppressed wages, according to the complaint, was entering into no-poach agreements, in which they agreed not to hire each other’s employees.

Article Type: Lawsuit
Topic: Antitrust
Tags: Anticompetitive Actions, Antitrust, No-Poach Agreements, Wage Suppression