The Serious Reason The US Department Of Justice Sued 3 Poultry Industry Giants
Earlier today, the Associated Press reported that the United States Department of Justice (DOJ) filed a lawsuit against three of the largest poultry producing companies in the country. In the suit, the DOJ alleges that Cargill, Sanderson Farms, and Wayne Farms along with the data consulting company Webber, Meng, Sahl, and Co. operated a multi-year conspiracy that involved exchanging information regarding workers' pay and benefits. That information was then allegedly used to limit competition for labor in the industry and keep wages low for the poultry giants. The Associated Press notes that the companies that are named in the suit are responsible for the hiring of 90% of all chicken processing jobs in the nation.
The Associated Press notes that this is just one of the latest cases brought forth by the DOJ to enforce antitrust laws and crack down on anti-competitive behavior in the meat industry. President Biden even called out meatpacking businesses for their questionable practices during the State of the Union Address. Cargill was also named in a similar lawsuit that accused four of the U.S.'s largest meat producers for controlling prices. Pork producers also faced a similar price fixing lawsuit recently and several poultry executives were also recently acquitted in another price-fixing case (via Reuters). These accusations also come at a time when meat prices, including the once-low priced chicken, are seeing some of the most aggressive price increases.
The suit was quickly settled
Reuters reports that the poultry companies quickly settled the suit out of court. The three poultry producers agreed to pay more than $84 million in restitution back to the workers that were harmed by the information sharing practices. "Through a brazen scheme to exchange wage and benefit information, these poultry processors stifled competition and harmed a generation of plant workers who face demanding and sometimes dangerous conditions to earn a living," said Doha Mekki of the Justice Department's Antitrust Division in a statement following the release of the settlement.
The restitution will be divided between the three producers, per Reuters. Cargill Meat Solutions will pay $15 million, Sanderson will pay $38.3 million, and Wayne $31.5 million. This settlement will also prohibit those poultry producers from engaging in unfair practices against contracted farmers. According to Modern Farmer, roughly 97% of chicken in the country is raised on a "tournament system" wherein the worst performing farmers are paid less. The settlement states that producers would no longer be able to lower the base pay and must offer bonuses and incentives instead (via Reuters).