Meat Processors Pay $127.2 Million to Settle Wage-Fixing Case

Lincoln, NEPlaintiffs in a wage-fixing class-action lawsuit asked a judge in Colorado federal court to preliminarily approve deals with two meat processors. In early March, Brazil’s JBS, the world’s largest beef producer, agreed to pay $55 million and Arkansas-based Tyson will pay $72.25 million to settle a complaint involving several companies that allegedly participated in a nationwide scheme to fix and depress wages for meat plant workers.

The November 2022 class-action lawsuit filed in the U.S. District Court for the District of Colorado accused more than 12 meat processing companies of conspiring to supress wages at plants across the U.S. Plaintiffs Ron Brown and Minka Garmon also said the companies violated antitrust law by sharing confidential compensation data through surveys and meetings. According to Reuters, a class estimated at tens of thousands of red meat processing workers at 140 plants alleged a years-long conspiracy among JBS, Tyson and other companies to artificially keep wages low.

The plaintiffs are hourly and salaried beef and pork processing workers, who slaughter, age and help prepare the meat for retail distribution. Ron Brown was employed by Smithfield Farms, Inc. at a pork-processing plant in Iowa. Minka Garmon was employed by National Beef Packing Co. at a beef-processing plant in Georgia. Both plaintiffs were paid an hourly wage and benefits. They claim that since 2014, a group of companies and their subsidiaries (see below) conspired to fix and depress their compensation. Collectively these companies produce approximately 80 percent of the red meat sold in the U.S.

In February 2023, defendants’ lawyers filed a motion to dismiss the complaint. The court, however, held that the plaintiffs had alleged sufficient evidence to pursue their wage-fixing and information exchange claims. As well, the plaintiffs’ lawyers filed an amended complaint that expanded the class, named additional defendants and contained “… more compelling allegations of conspiratorial misconduct.”

More Meat Processing Companies

Those other companies who have not yet settled include Cargill Inc., Cargill Meat Solutions Corp., Hormel Foods Corp., American Foods Group LLC,  National Beef Packing Company, Iowa Premium LLC, Smithfield Foods Inc., Smithfield Packaged Meats Corp., Agri Beef Company, Washington Beef LLC, Agri Stats Inc. and Webber, Meng, Sahl and Company Inc.

According to the motion for preliminary approval of the agreement, “The sizable financial recovery alone would render the settlement agreements adequate but the settlement agreements also contain meaningful cooperation terms that will help plaintiffs to prosecute their antitrust claims against the remaining defendants.” Plaintiffs’ attorneys said “the value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation.” Reuters reported that they could seek a legal-fee award from the settlement fund, but did not specify a range or amount.

Law360 reported that JBS, Hormel Foods Corp. and Tyson Foods Inc., tried to throw out the lawsuit, but Judge Brimmer concluded that the plant workers had plausibly alleged violations of the Sherman Act and that the companies used high-level employees to swap information. Along with the meat producers, consulting firms WMS & Co and Agri Stats Inc. are accused of helping the meat producers exchange competitively sensitive compensation data as part of the scheme. WMS, which has already provided documents and "oral proffers" to help the plaintiffs, agreed under the settlement for three of its employees to be deposed and called as witnesses at trial, according to the order.

As part of their settlements, Tyson and JBS are required to provide workers’ compensation data, documents and testimony as the plaintiffs pursue pending claims. The case is Ron Brown et al v JBS USA Food Company et al, U.S. District Court for the District of Colorado, No. 1:22-cv-02946-PAB-STV.