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Feds sue poultry producers, alleging unfair worker practices

Related video above: Nearly 3.5 million chickens in Pennsylvania destroyed due to bird flu The Justice Department filed a lawsuit Monday against some of the largest poultry producers in the U.S. along with a proposed settlement that seeks to end what it says are longstanding misleading and abusive employee practices. The lawsuit, filed in federal court in Maryland, names Cargill, Sanderson Farms and Wayne Farms, along with a data consulting firm known as Webber, Meng, Sahl and Co. and its president. In its lawsuit, the Justice Department alleges that the companies engaged in a years-long conspiracy to share information about workers’ wages and benefits at poultry processing plants to reduce worker competition in the marketplace. The companies did not immediately respond to messages seeking comment. The government claims the data consultancy helped share workers’ compensation information with companies and their executives. By implementing the program, officials claim, companies were able to compete less fiercely for workers and reduce the amount of money and benefits they had to offer their employees, suppressing competition for poultry processing workers at all levels, according to with court documents. The defendants and unnamed co-conspirators in the suit employ approximately 90% of all chicken processing jobs in the country. The lawsuit is the latest example of the Justice Department’s antitrust enforcement targeting companies the government believes are engaging in anticompetitive behavior to suffocate workers or harm consumers. It also comes as the department continues a broader investigation into labor abuses in the poultry industry.” Through a brazen system of sharing wage and benefit information, these poultry processors have stifled competition and harmed a generation of factory workers who face demanding and sometimes dangerous conditions earn a living,” said Doha Mackey, the principal deputy attorney general for the Justice Department’s antitrust division. The lawsuit against the companies was filed with a proposed consent decree — a settlement that would require the companies to pay 84, $8 million in compensation for workers harmed by the illegal information-sharing network. The settlement would also create a federal watchdog chosen by the Justice Department to ensure compliance for the next decade. The consent decree would allow also to Justice Department lawyers and investigators to inspect poultry processors’ facilities and interview their employees to make sure they are complying with the terms, according to court documents. a subsidiary, formed a joint venture to acquire Sanderson Farms, paying $203 a share in cash for a company that last year processed more than 4.8 billion pounds of meat. The companies plan to combine Sanderson Farms with Wayne Farms to create a new, privately held poultry business. The operations will include poultry processing plants and prepared food plants in Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas. Wayne Farms has more than 9,000 employees. It produces products under brands such as Wayne Farms fresh and prepared chicken, Platinum Harvest premium fresh chicken, Chef’s Craft gourmet chicken, Naked Truth premium chicken and Ladybird premium chicken. Laurel, Mississippi-based Sanderson Farms has 17,000 employees and 12 plants. It processes 13.6 million chickens per week. The proposed consent decree would also resolve allegations that Sanderson Farms and Wayne Farms treated chicken farmers unfairly by using a system that reduced their pay for poor performance. Farmers sign contracts to raise chickens and processing companies provide the birds and feed. Farmers are then paid based on how well they perform compared to other chicken producers. The Justice Department alleges that the companies’ use of this compensation method, known as the “tournament system,” resulted in their failure to provide information to farmers to assess and manage their financial risk. Generally, chicken producers enter into long-term contracts with meat companies that farmers say lock them into deals that set their compensation at unprofitably low levels. As part of this settlement, Sanderson Farms and Wayne Farms will be prohibited from reducing base payments to chicken growers as a way of punishing underperformance. However, the consent decree would allow the companies to offer incentives and bonuses to growers. The proposed consent decree with the poultry companies and one with the data company were filed in court on Monday. Under federal law, the proposals will also be published in the Federal Register and there will be a 60-day period to send comments to the Justice Department before a court accepts and finalizes the agreements.

Related video above: Nearly 3.5 million Pennsylvania chickens destroyed by bird flu

The Justice Department filed a lawsuit Monday against some of the largest U.S. poultry producers along with a proposed settlement that seeks to end longstanding deceptive and abusive practices for workers.

The suit, filed in federal court in Maryland, names Cargill, Sanderson Farms and Wayne Farms, along with a data consulting firm known as Webber, Meng, Sahl and Co and its president.

In its lawsuit, the Justice Department alleges the companies engaged in a years-long conspiracy to share information about workers’ wages and benefits at poultry processing plants to reduce worker competition in the marketplace. The companies did not immediately respond to messages seeking comment.

The government claims the data consultancy helped share workers’ compensation information with companies and their executives. By implementing the program, officials claim, companies were able to compete less fiercely for workers and reduce the amount of money and benefits they had to offer their employees, suppressing competition for poultry processing workers across the board, according to court documents.

The defendants and unnamed co-conspirators in the lawsuit employ approximately 90% of all chicken processing jobs in the country.

The lawsuit is the latest example of the Justice Department’s antitrust enforcement targeting companies the government believes are engaging in anticompetitive behavior to suffocate workers or harm consumers. It also comes as the department continues a broader investigation into labor abuses in the poultry industry.

“Through a brazen scheme to share wage and benefit information, these poultry processors have stifled competition and harmed a generation of factory workers who face demanding and sometimes dangerous conditions to make a living,” said Doha Mekki, the principal Deputy Assistant Attorney General for Justice. Antitrust Division of the Department.

The lawsuit against the companies was filed with a proposed consent decree — a settlement that would have required the companies to pay $84.8 million in restitution to workers harmed by the illegal information-sharing network.

The settlement would also create a federal watchdog handpicked by the Justice Department who would ensure compliance for the next decade. The consent decree will also allow DOJ lawyers and investigators to inspect the poultry processors’ facilities and interview their employees to make sure they are complying with the terms, according to court documents.

The lawsuit comes as Cargill and Continental Grain, of which Wayne Farms is a subsidiary, formed a joint venture to buy Sanderson Farms, paying $203 a share in cash for a company that last year processed more than 4.8 billion pounds of meat.

The companies plan to combine Sanderson Farms with Wayne Farms to create a new, privately held poultry business. The operations will include poultry processing plants and prepared food plants in Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas.

Wayne Farms has more than 9,000 employees. It produces products under brands such as Wayne Farms fresh and prepared chicken, Platinum Harvest premium fresh chicken, Chef’s Craft gourmet chicken, Naked Truth premium chicken and Ladybird premium chicken.

Laurel, Mississippi-based Sanderson Farms has 17,000 employees and 12 factories. It processes 13.6 million chickens per week.

The proposed consent decree would also resolve allegations that Sanderson Farms and Wayne Farms treated chicken farmers unfairly by using a system that reduced their pay for poor performance.

Farmers sign contracts to raise the chickens and processing companies supply the birds and feed. Farmers are then paid based on how well they perform compared to other chicken producers. The Justice Department alleges that the companies’ use of this reimbursement method, known as the “tournament system,” resulted in their failure to provide information to farmers to assess and manage their financial risk.

Generally, chicken producers enter into long-term contracts with meat companies that farmers say lock them into deals that set their compensation at unprofitably low levels.

As part of that settlement, Sanderson Farms and Wayne Farms would be prohibited from reducing base payments to chicken growers as a way of punishing them for poor performance. However, the consent decree would allow the companies to offer incentives and bonuses to growers.

The proposed consent decree with the poultry companies and one with the data company were filed in court on Monday. Under federal law, the proposals will also be published in the Federal Register and there will be a 60-day period to send comments to the Justice Department before a court accepts and finalizes the agreements.

Feds sue poultry producers, alleging unfair worker practices Source link Feds sue poultry producers, alleging unfair worker practices

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