Pilgrim’s Pride seeks appellate review in wage-fixing lawsuit

GREELEY — Attorneys for Pilgrim’s Pride Corp., being sued by a class of nationwide poultry farmers for allegations of conspiring to suppress growers’ pay, hope to convince the appellate court to hear their appeal of a recent order certifying the growers as a class, which can lend more weight to the claims against the company.

The antitrust case has been ongoing since 2008, with former defendants Tyson Foods, Koch, Perdue Foods and others settling for tens of millions of dollars while also denying wrongdoing, leaving Pilgrim’s the sole defendant. In early May, U.S. District Judge Robert Shelby, sitting in Oklahoma’s Eastern District federal court, certified the case as a class action, essentially pitting 24,350 growers against Pilgrim’s for allegations of wage fixing and limiting worker mobility. The plaintiffs alleged the companies conspired through the exchange of compensation data provided by Agri Stats Inc., and others. They also alleged company executives worked together to exchange future compensation plans across plants.

Collectively, the growers are seeking damages of $2.77 billion, according to Pilgrims’ most recent court filing. Tyson Foods settled the case in 2021 for $21 million. Perdue Foods settled for $60.7 million in March 2023. In September 2022, Cargill Meat Solutions Corp., Sanderson Farms and Wayne Farms LLC, settled for $84.8 million, while denying any wrongdoing, according to Meat & Poultry magazine.

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As the sole defendant, Pilgrims’ now is seeking what is called a “petition for leave to appeal,” which is a remedy to class certifications, citing judicial error. 

According to the 35-page court filing, Pilgrim’s attorneys state that in certifying the class, the judge “relied on mere allegations in plaintiffs’ complaint, as well as anecdotal and shaky expert evidence, when concluded that common evidence regarding the alleged conspiracy and antitrust impact predominated over individualized evidence. Because the district court failed to rigorously analyze and weigh the evidence — including the individualized evidence proffered by Pilgrim’s —the court’s decision was erroneous on critical questions generally applicable to class certification, and interlocutory review under Rule 23(f) is warranted.”

Pilgrim’s attorneys explain in the filing that grower pay decisions are “determined by numerous factors specific to the local region surrounding each plant, including the cost of feed, fuel and utilities, and the number of plants in the surrounding area (which is often a single plant).” 

As an example, Pilgrim’s noted that some of its plants pay growers based on facility size, while others pay growers based on their efficiency compared to other growers.  “During the alleged conspiracy, grower pay changed in different ways, at different times, even at plants located near each other,” the filing states.

The filing stated, “in areas where plants are in close proximity, pay changed in different ways at different times depending on numerous variables, including, among others, types of chicken, housing class, and performance bonuses, all of which vary based on plant-specific and other local factors.” 

“At minimum, the district court must confirm the alleged conspirators are in fact competitors in a relevant market,” the filing stated.

The filing states the judge should have recognized that competition for growers is local. “A Foster Farm’s complex in California does not compete with a Pilgrim’s complex in Georgia to purchase grower services, because farms in Georgia cannot transport chickens to California,” the filing stated.

The Pilgrim’s filing pointed out that “total pay and changes in pay vary widely across locations, between poultry companies, among plants owned by the same company, and among plants in the same state. In sum, the district court’s decision conflicts with overwhelming case law on frequently recurring and important issues of class action law and thus warrants this court’s review.”

The filing stated the “district court erred by simply accepting plaintiffs’ argument that the relevant geographic market for grower services is national, without any analysis.” Citing case law, the filing stated “a relevant geographic market is “the narrowest market which is wide enough so that products from adjacent areas cannot compete on substantial parity with those included in the market.”

The plaintiff’s response to the request for appeal is due Monday, June 3.

In Re: Broiler Chicken Grower Antitrust Litigation (No II)., Pilgrim’s Pride Corporation v Haff Poultry, et. al. Case No. 24-602, U.S. Court of Appeals for the 10th Circuit; May 24, 2024.