Given what has happened in the last decade or so, you might say price fixing is part of Big Chicken's DNA. And perhaps the number one poster child for price collusion has been the second largest U.S. chicken company by sales volume: Pilgrim's Pride Corporation.
Colorado-based Pilgrim’s Pride pleaded guilty last year in a criminal complaint brought by the Department of Justice to fixing broiler chicken prices and rigging bids in a conspiracy with other Big Chicken companies. Along with its guilty plea, Pilgrim’s coughed up almost $108 million in fines.
But it looks like Pilgrim's Pride litigation nightmare is just getting started. Buried in Pilgrim’s Pride’s February 10-K Annual Report to the U.S. Security and Exchange Commision was this nugget:
“On February 9, 2022, the Company learned that the DOJ has opened a civil investigation into human resources antitrust matters.”
It appears the Justice Department has opened a civil probe about whether Pilgrim’s and, most likely, many other Big Chicken companies engaged in anti-competitive sharing of employment information and practices in order to suppress worker wages. Purdue Farms confirmed the DOJ is investigating its human resource practices. Sanderson Farms and Tyson aren't saying.
If history is any indicator, Big Chicken should be shaking in their gibbets.
Back in 2019, Judy Jien, Kieo Jibdi and Elaisa Clement filed a class action complaint asking for a jury trial against a who's who of Big Chicken including Pilgrim's Pride. In the suit, the plaintiffs alleged that:
“For more than a decade, Defendants have conspired and combined to fix and
depress the compensation paid to non-supervisory production and maintenance employees at
chicken processing plants in violation of Section 1 of the Sherman Act. … First, senior executives of the Defendant Processors, including human resources executives and directors of compensation, held recurring “off the books” in-person meetings at the Hilton Sandestin Resort Hotel & Spa in Destin, Florida, during which they exchanged information about, discussed, agreed upon and ultimately fixed the wages and benefits of Class Members at artificially depressed levels. … Second, on a highly frequent basis, Defendant Processors exchanged detailed, current and non-public wage and benefits information through surveys conducted by Agri Stats and WMS. … Third, managers located at Defendant Processors’ chicken processing plants engaged in bilateral and regional exchanges of wage and benefits information. Those managers frequently reached out directly to their counterparts at competitors’ chicken processing plants to request and exchange wage and benefits data, including data regarding plans for future wages and benefits.”
In 2020, the complaint was amended but essentially alleged the same facts.
Of course Big Chicken tried to get the complaint thrown out. But the United States District Court for the District of Maryland district judge Stephanie A. Gallagher sees the case differently. In September of 2020, while Gallagher did for the most part dismiss the complaints, she left the door wide open for the plaintiffs to continue to press their case.
Most recently, a few Big Chicken companies including, wait for it … Pilgrim’s Pride … have sought settlement. In July of last year, the court gave preliminary approval to a $29 million settlement in the wage-fixing conspiracy class action lawsuit.
And that takes us directly back to the Department of Justice. It's impossible to know at this early stage if the DOJ civil probe will put Big Chicken on the chopping block. But I do think the DOJ probe may have (chicken?) legs.
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for Investigate Midwest covers agriculture and related issues including politics, government, environment and labor. His opinions are his own and do not reflect Investigate Midwest. Email him at firstname.lastname@example.org.