A number of big meat companies are accused of colluding to exploit thousands of workers across the industry.
An antitrust lawsuit seeking to represent workers in the red meat processing industry is accusing 11 of the nation’s largest meat processors of colluding to suppress the wages and benefits of hundreds of thousands of their employees since 2014, according to law firm Hagens Berman.
The class action was filed Nov. 11, 2022, in the U.S. District Court for the District of Colorado, bringing claims of fraudulent concealment of violation of federal antitrust law, the Sherman Act, and lays out the specific methods the 11 red meat processors used to fix wages and keep them lower than what the market would dictate. Affected employees include those who have occupied various positions along processing lines, including slaughtering and aging, cutting and further processing, repairing processing machines, and supervising processing lines.
If you worked at Agri Beef Co., American Foods Group, Cargill, Hormel, Iowa Premium, JBS, National Beef Packing Co., Perdue, Seaboard Foods, Smithfield, Triumph Foods, Tyson or Washington Beef at any point from 2014 to the present, you may be affected and have rights to potential compensation under federal law.
The lawsuit follows Hagens Berman’s successful case regarding similar claims in the poultry industry which recovered so far $134.6 million in compensation for wage-fixing.
“Hundreds of thousands of workers have been harmed through this yearslong scheme to suppress wages,” said Steve Berman, managing partner at Hagens Berman representing the proposed class of consumers. “Our firm has secured $134.6 million in the poultry processing industry for the same antitrust behavior. The meat industry’s gravy train ends here.”
Red meat industry caught red handed
According to the class action, red meat processing companies conspired to fix and depress compensation paid to production and maintenance employees at meat processing plants in violation of federal law by sharing compensation data through third parties, Webber, Meng, Sahl & Company Inc. and Agri Stats.
The lawsuit highlights several specific methods that meat processing companies used to collectively suppress wages, including conducting secret meetings that excluded parties not involved in the conspiracy and engaging in secretive communications by avoiding written records. The processing companies also exchanged competitively sensitive compensation data through a non-public, proprietary system that intentionally operate under the public’s radar, the suit alleges.
The companies involved in the scheme instituted “give-data-to-get-data” requirements so that no company could access sensitive compensation data exchanges unless it provided data of its own, according to the complaint. The conspirators also allegedly concealed compensation surveys and their results to hide this information from parties not involved in the scheme.
“Only through calculated manipulation have these mega food companies been able to live so high on the hog,” Berman said. “Through these cross-channel methods of subterfuge, as well as blatant no-poach agreements, the red meat processing industry has clearly acted with the goal of wage-fixing.”
The lawsuit states: “Defendant Processors engaged in the conspiracy to increase their profits by reducing labor costs, which comprise a substantial share of each Defendant Processor’s total operating costs. 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…”
Cooking the books
The lawsuit details the size and scale of the conspiracy as well as the heavy concentration of control within red meat processing. The 11 defendant processors collectively control more than 80 percent of the production of U.S. red meat through approximately 140 red meat processing plants.
The beef and pork industry in the United States is among the world’s largest producers of beef and pork. The industry produced 12,677,000 metric tons of beef and 12,553,000 metric tons of pork in 2021 alone. At this scale, the lawsuit’s defendant processors earn billions of dollars in annual revenue from the sale of processed red meat. JBS alone made close to $30 billion from red meat sales in 2020, according to the lawsuit. That same year, Tyson’s pork and beef divisions generated more than $20 billion in revenue.
Meanwhile, in Kansas, where both National Beef and Cargill compete for workers at beef-processing plants, the difference between the average hourly wages paid to production workers at both plants decreased from $0.53 in 2014 to $0.01 in 2017. Likewise, in the region which overlaps both the Oklahoma and Texas panhandles, where there are three red meat processing plants within 64 miles of one another, that difference decreased from $0.22 in 2014 to $0.07 in 2018. In south-central Nebraska, where at least three red meat processing plants compete for workers within 53 miles of one another, the difference decreased from $0.63 in 2014 to $0.04 in 2017
Original source: https://www.businesswire.com