2008 Pilgrim’s Pride bankruptcy led to industrywide wage fixing, lawsuit claims

GREELEY and BALTIMORE  — Pilgrim’s Pride Corp. (Nasdaq: PPC) and 17 other U.S. chicken producers have been named in a federal antitrust lawsuit alleging that the industry conspired to suppress wages for more than a decade.

The complaint, filed in the U.S. District Court of Maryland last week, alleges that human-resources directors from the 18 chicken producers had privately met for years at a Hilton resort in Destin, Florida, to fix the wages of line workers, and regional managers shared their wage and benefits schedules to avoid competition with each other.

The suit includes Greeley-based meat processor Pilgrim’s Pride and also names major competitors Tyson Foods Inc., alleging the defendants control more than 90 percent of the U.S. chicken market.

Specifically, the lawsuit alleges that Pilgrim’s Pride’s 2008 bankruptcy spurred other companies to look at ways to manage labor costs to avoid their own financial struggles. It also alleges that Pilgrim’s, Tyson and another major chicken company rotated paying the cost of those Florida meetings in full each year, citing a former Pilgrim’s employee.

Two industry data firms, Agri Stats Inc. and WMS and Co. Inc., also are alleged to have helped the companies share compensation data amongst themselves by providing detailed facility-level statistics that could be matched to other public information.

A former Pilgrim’s employee also told investigators the company had set up a specific department to visit each of its plants and make sure their compensation rates perfectly matched Agri Stats’ median reported pay.

The plaintiffs are three former workers at chicken processing plants in Arkansas. The suit is asking for class-action status so other workers can join.

Pilgrim’s Pride did not respond to a request for comment Thursday afternoon.

Pilgrim’s Pride is also a co-defendant in a separate lawsuit alleging price fixing in the chicken industry. That suit is on hold after the U.S. Department of Justice began investigating potential criminal violations in late June.

GREELEY and BALTIMORE  — Pilgrim’s Pride Corp. (Nasdaq: PPC) and 17 other U.S. chicken producers have been named in a federal antitrust lawsuit alleging that the industry conspired to suppress wages for more than a decade.

The complaint, filed in the U.S. District Court of Maryland last week, alleges that human-resources directors from the 18 chicken producers had privately met for years at a Hilton resort in Destin, Florida, to fix the wages of line workers, and regional managers shared their wage and benefits schedules to avoid competition with each other.

The suit includes Greeley-based meat processor Pilgrim’s Pride and also names major competitors Tyson Foods Inc., alleging the defendants control more than 90 percent of the U.S. chicken market.

Specifically, the lawsuit alleges that Pilgrim’s Pride’s 2008 bankruptcy spurred other companies to look at ways to manage labor costs to avoid their own financial struggles. It also alleges that Pilgrim’s, Tyson and another major chicken company rotated paying the cost of those Florida meetings in full each year, citing a former Pilgrim’s employee.

Two industry data firms, Agri Stats Inc. and WMS and Co. Inc., also are alleged to have helped the companies share compensation data amongst themselves by providing detailed facility-level statistics that could be matched to other public information.

A former Pilgrim’s employee also told investigators the company had set up a specific department to visit each of its plants and make sure their compensation rates perfectly matched Agri Stats’ median reported pay.

The plaintiffs are three former workers at chicken processing plants…