$10M Settlement Reached in Wages Case

Settlement Struck in Antitrust Case Alleging Food Companies Suppressed Wages

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A group of current and former employees of several food companies announced a settlement with one of the companies that they allege conspired to suppress wages. (DTN file photo)

LINCOLN, Neb. (DTN) -- Current and former food company employees suing 11 companies for an alleged conspiracy to suppress employee wages, have asked a federal court to dismiss the case against one of the companies as a result of a settlement agreement and to approve a second cooperation agreement reached with another company.

In November 2022, a group of employees filed a class-action lawsuit in the U.S. District Court for the District of Colorado. That lawsuit alleges a group of food companies conspired to keep wages low, damaging the employees' future earnings potential.

Companies named in the lawsuit that alleges a conspiracy include JBS USA Food Company, Cargill Inc., Cargill Meat Solutions Corp., Hormel Foods Corp., American Foods Group LLC, Triumph Foods LLC, Seaboard Foods LLC, National Beef Packing Company, Iowa Premium LLC, Smithfield Foods Inc., Smithfield Packaged Meats Corp., Agri Beef Company, Washington Beef LLC, Perdue Farms Inc., Agri Stats Inc. and Webber, Meng, Sahl and Company Inc.

On Monday, the plaintiffs announced a $10 million settlement with Seaboard Foods and an agreement with Triumph Foods to cooperate in the ongoing case against the other companies.

Triumph Foods has agreed to cooperate in the form of "witness testimony, document production and assistance in authenticating and admitting documents into evidence at summary judgment and trial," according to a motion filed on Monday.

So far three settlements and agreements have been reached in the case.

On Dec. 6, 2022, the plaintiffs reached a settlement with Perdue Farms, Inc. for $1.25 million and cooperation with the remaining case.

A motion was filed for preliminary approval of the Perdue settlement on March 6, 2023, but the court has yet to grant approval.

The original lawsuit alleged that 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. The companies named in the lawsuit produce about 80% of all red meat sold to U.S. consumers.

The lawsuit said senior executives at the companies established and approved hourly wage rates, annual salaries and employment benefits.

"This highly regimented process for determining compensation allowed defendant processors to compare compensation practices -- and collectively suppress compensation -- across their workforces," the employees alleged.

"Defendants implemented, monitored and enforced their conspiracy to fix and depress compensation paid to class members through a series of overt acts."

The complaint said the companies conducted "secret" compensation surveys and held "secret" annual meetings that included executives from the companies named in the lawsuit.

"The purpose, intent, and outcome of these annual red meat industry compensation meetings was to depress and fix the wages, salaries and benefits of class members at artificially depressed levels," the complaint alleged.

In addition, the lawsuit said the companies were in direct communication via senior executives who "extensively discussed, compared, and in turn further suppressed compensation through email and phone communications."

The complaint said the companies entered into no-poach agreements, preventing the companies from recruiting the other companies' employees.

"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 employees said in the lawsuit.

Todd Neeley can be reached at todd.neeley@dtn.com

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Todd Neeley

Todd Neeley
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