Wage fixing case: Meat industry giants pay $127 million to resolve lawsuit

Meat industry giants JBS USA Food Company and Tyson Foods have agreed to pay a combined $127.2 million to resolve a lawsuit which accused them of purposefully suppressing workers’ wages at their processing plants. 

So far, this marks the largest deal in the wage-fixing case occurring in Colorado federal court.  

Background information 

According to a March 13 Farm Progress article, written by DTN Staff Reporter Todd Neeley, a group of employees filed a class-action lawsuit in the U.S. District Court for the District of Colorado in November 2022, alleging meatpacking companies have been conspiring to keep wages low and damaging employees’ future earnings potential. 

“The original lawsuit alleged since at least 2014, the companies ‘conspired and combined to fix and depress’ compensation to employees at about 140 red meat processing plants across the country, in violation of the Sherman Antitrust Act,” writes Neeley. “The companies named in the lawsuit produce about 80 percent of all red meat sold to U.S. consumers.”

The complaint explains senior executives at these companies compared compensation practices, then established and approved hourly wage rates, annual salaries and employment benefits to suppress compensation across their workforces. 

The employees further alleged these companies entered a no-poach agreement, preventing them from recruiting employees from each other. 

“The intended and actual effect of defendants’ conspiracy to fix compensation has been to reduce and suppress the wages, salaries and benefits paid to class members since January 2014 to levels materially lower than they would have been in a competitive market,” the complaint alleges. 

In August 2023, nearly a year after the lawsuit was filed, the plaintiffs announced a $10 million settlement with Seaboard Foods; a $1.3 million settlement with Perdue Farms, Inc. and made an agreement with Triumph Foods to cooperate in the ongoing case against the other companies. 

Current case

In the latest settlement, announced in federal court at the end of the first full week of March, Tyson Foods agreed to pay $72.3 million and JBS USA Food Company agreed to pay $55 million, bringing the grand total in the case to around $138.5 million. 

The settlement also requires the two food industry giants to provide worker compensation data, documents and testimony, as the plaintiffs pursue pending claims.

Both have denied the plaintiffs’ allegations and refuse to admit to any wrongdoing as part of their settlement. 

“The sizable financial recovery alone would render the settlement agreements adequate, but the settlement agreements also contain meaningful cooperation terms which will help plaintiffs to prosecute their antitrust claims against the remaining defendants,” reads a motion for preliminary approval of the agreement filed in court.

Settlements have not been reached with the remaining defendants in the case, including Cargill, Hormel, National Beef and Smithfield. 

Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.