WSJ: DOJ probing poultry companies’ employment practices

The U.S. Department of Justice has launched a civil probe into whether poultry companies participated in anticompetitive conduct by exchanging employment practices that held down the wages of plant workers, The Wall Street Journal reported Friday in a news exclusive.

Sources “familiar with the matter” told the newspaper that DOJ is examining several poultry companies’ actions and notified at least some companies they must preserve documents.

Pilgrim’s Pride Corp., one of the world’s largest poultry producers, learned in February “DOJ has opened a civil investigation into human resources antitrust matters,” according to its annual 10-K filing with the Securities and Exchange Commission. The company added it “plans to cooperate when a CID [civil investigative demand] is served.”

The Journal reported a spokeswoman for Perdue Farms Inc. confirmed it received a similar notice. After being contacted by this publication about the Journal's article, a Perdue Farms spokesperson said the company "received a letter and was asked to hold some of our documents."

Other processors, as well as DOJ, declined to comment to The Wall Street Journal.

Meat processors have faced various lawsuits and government probes in recent years related to alleged anticompetitive behavior. In October 2020, for example, Pilgrim’s Pride announced reaching a plea agreement with DOJ regarding its probe into sales of broiler chicken products in the U.S.

Pilgrim’s Pride agreed to plead guilty to one count of conspiracy in restraint of competition involving sales of broiler chicken products in the U.S., in violation of the Sherman Antitrust Act,  and pay a fine of $110.5 million. A federal court in Colorado last year approved the plea agreement and assessed an amended fine of $107.9 million.

The plea agreement was entered four years after several class action lawsuits were filed against Pilgrim’s Pride and other defendants on behalf of purchasers of broiler chickens, alleging violations of antitrust and unfair competition laws.

“The U.S. government’s recent focus and attention on market dynamics in the meat processing industry could expose PPC to additional costs and risks,” Pilgrim’s Pride cautioned in its annual report. As of Dec. 26, 2021, the company employed nearly 59,400 persons—45.4% of whom were covered under collective bargaining agreements.

The National Chicken Council, a trade association representing companies that raise and process chickens for meat, had no comment on The Wall Street Journal’s news exclusive, in response to an inquiry from Food & Beverage Insider. The United Food and Commercial Workers Union (UFCW), which represents meatpacking workers, did not immediately return an email seeking comment.