JBS, Tyson Foods reach settlement in wage-fixing lawsuit

Latest settlements significantly increase total to $138.50 million.

Krissa Welshans, Livestock Editor

March 13, 2024

3 Min Read
Getty Images/ iStock

Tyson Foods and JBS will pay $72.25 million and $55 million, respectively, to settle a class-action lawsuit that alleged the two companies, along with several other companies, engaged in a conspiracy to keep wages low. According to the court filing, the latest settlements, which bring the total amount of settlements to $138.50 million, “represent a significant increase in the valuation of the case and in the financial compensation and cooperation benefits for the settlement classes.”

Plaintiffs previously entered into settlements with Perdue Farms Inc. and Seaboard Foods for $1.25 million and $10 million, respectively. Both companies also committed to cooperating in the ongoing lawsuit.

Triumph Foods was dismissed from the lawsuit upon reaching a cooperation agreement. Compensation-consulting firm Webber, Meng, Sahl and Company Inc. (WMS) agreed to “substantial cooperation,” according to the court filing.

Additional defendants named in the lawsuit include Cargill, Hormel Foods, Rochelle Foods, American Foods Group, National Beef Packing Co., Smithfield Foods, Murphy-Brown of Missouri, Agri Beef Co., Washington Beef, Perdue Farms, Greater Omaha Packing Co., Nebraska Beef, Indiana Packers Corporation, Quality Pork Processors and Agri Stats.

The lawsuit alleges “leading red meat processors” in the U.S. and two consulting companies conspired to stabilize the compensation paid to workers at red meat processing plants. The action was filed after a comprehensive investigation, which included assessments of industry wages, interviewing industry witnesses, and extensive research into the red meat processing industry. According to court documents, the investigation revealed support for the allegations, including that the defendants entered into an illegal agreement in violation of the Sherman Act.

In the original 2022 court filing, the lawsuit outlines allegations wherein the defendant processors hired WMS to administer an annual Red Meat Industry Compensation Survey in order to “confer a veneer of legality on defendant processors’ illicit information exchange.” During the class period, Jonathan Meng, WMS’s president and the survey’s administrator, allegedly warned the processors that they were improperly exchanging future compensation data in a manner that was inconsistent with federal antitrust law, “but defendant processors paid his warnings no heed for years.” Further, the lawsuit alleges that the processors sent their executives, including vice presidents of human resources and directors of compensation, to annual in-person meetings (Red Meat Industry Compensation Meeting) with the purpose, intent, and outcome “to depress and fix the wages, salaries, and benefits of class members at artificially depressed levels.”

“At the beginning of each Red Meat Industry Compensation Meeting, Meng customarily gave a presentation summarizing the results of that year’s Red Meat Industry Compensation Survey. After Meng made his presentations, defendant processors sometimes excused him from the room so that they could have complete privacy while they held multiple, hours-long, ‘roundtable’ discussions.”

According to the filing, processors’ executives would extensively discuss the survey results and then reach agreements about optimal and future compensation rates and practices. Meng said the reason the processors needed a “consultant in the room” was to appear to comply with the antitrust laws—"yet, at defendant processors’ request, he was conspicuously absent during key roundtable discussions at some of the Red Meat Industry Compensation Meetings.”

Numerous other allegations surrounding communication between processors and consulting firms have been presented in the lawsuits, as well.

The court has denied multiple motions to dismiss, holding that plaintiffs have alleged sufficient evidence to “pursue both their per se wage-fixing claim and their information exchange claim.” An amended complaint filed on January 2, 2024, by plaintiffs expanded the class period, named additional defendants, and contained more compelling allegations of conspiratorial misconduct, the court filing noted.

Still, the documents state that the latest settlement agreements should not be deemed or construed to be an admission or evidence of any violation of any statute, law, rule, or regulation or of any liability or wrongdoing by Tyson or JBS.

About the Author(s)

Krissa Welshans

Livestock Editor

Krissa Welshans grew up on a crop farm and cow-calf operation in Marlette, Michigan. Welshans earned a bachelor’s degree in animal science from Michigan State University and master’s degree in public policy from New England College. She and her husband Brock run a show cattle operation in Henrietta, Texas, where they reside with their son, Wynn.

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