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Feds suing 3 NC-based poultry producers over unfair worker practices

A truckload of live turkeys arrives at a Cargill plant in Springdale, Ark., in 2011.
Danny Johnston
/
AP
A truckload of live turkeys arrives at a Cargill plant in Springdale, Ark., in 2011.

The Justice Department is filing an antitrust lawsuit against three of the nation's largest poultry producers for unfair labor practices.

Three people familiar with the matter told the Associated Press the suit is being filed Monday in Maryland.

Cargill, Sanderson Farms, and Wayne Farms employ thousands of people in North Carolina. The three companies named in the suit operate processing plants in Morganton, Wilkesboro, Dobson, Siler City, and other communities across the state.

In its lawsuit, the DOJ alleges the companies have been engaged in a multiyear conspiracy to exchange information about the wages and benefits of workers at poultry processing plants to drive down employee competition in the marketplace.

The companies did not immediately respond to messages seeking comment.

North Carolina ranks third in the nation for total poultry production, according to the North Carolina Poultry Federation.

The DOJ says the firms used data consultant Webber, Meng, Sahl and Company (WMS) in a “brazen scheme” to exchange information about plant workers and their salaries. According to the complaint, the exchange helped the companies keep wages and benefits low and made it harder for skilled workers to move from one processor to another.

The DOJ proposes the companies agree to a settlement that would require a court-appointment monitor to oversee competition for 10 years. In addition, WMS would be banned from “providing surveys or any other services that facilitate the sharing of competitively sensitive information in any industry.”

The suit is being filed with a proposed consent decree — a settlement that would require the companies to pay $84.8 million in restitution for workers who were harmed by the unlawful information sharing network, the people said.

The suit is the latest example of the DOJ's antitrust enforcement targeting companies the government believes engage in anticompetitive behavior to stifle workers or harm consumers. It also comes as the department continues a broader investigation into labor abuses in the poultry industry.

The suit comes as Cargill and Continental Grain — of which Wayne Farms is a subsidiary — formed a joint venture to acquire Sanderson Farms, paying $203 per-share in cash for a company that last year processed more than 4.8 billion pounds of meat. The deal closed last week.


The Associated Press contributed to this report.