The US Department of Justice (DOJ) Monday filed a civil lawsuit against three large poultry corporations alleging the companies collaborated to maintain competition against other corporations by underpaying workers. The antitrust lawsuit accuses three companies accounting for 90 percent of poultry processing jobs nationwide of running a “conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborate with their competitors on compensation decisions in violation of the Sherman Act.”
The lawsuit is a part of the Biden administration’s push to foster competition and protect consumers in the meatpacking and poultry industry amid national supply chain issues. A crucial part of the plan involves stricter enforcement of the Packers and Stockyards Act—an act at the center of Monday’s lawsuit. The act is meant to assure “fair competition and fair trade practices” to protect ranchers, farmers and customers from unfair practices in the livestock, meat and poultry industries. The Biden administration’s plan involves DOJ and the Department of Agriculture Department enforcement of three key pieces of antitrust legislation: the Packers and Stockyards Act, the Clayton Act and the Sherman Act.
In Monday’s lawsuit, the DOJ accuses Cargill Meat Solutions Corporation, Sanderson Farms Inc., and Wayne Farms LLC, along with the data consulting firm Webber, Meng, Sahl and Company, Inc (WMS) of violating Section 1 of the federal Sherman Act, which prohibits companies from agreeing to restrain trade. A complaint filed Monday also alleged Sanderson and Wayne violated the Packers and Stockyards Act by participating in a “tournament system” where the companies pit growers against each other while withholding critical information and resources from them when signing contracts.
As a part of the lawsuit, the DOJ proposed a consent decree with WMS, who collected and shared “competitively sensitive” information from the three plants. The consent decree would appoint a court-approved compliance monitor to ensure that antitrust laws are followed for at least the next ten years.
Shortly after the lawsuit was filed, the DOJ settled with the three companies in the US District Court of Maryland. Cargill will pay $15 million, Sanderson $38 million, and Wayne $31.5 under the settlement. The DOJ also mandated that the three companies pay a collective $84.8 million in restitution to workers “who were harmed by the information exchange conspiracy.”
