LINCOLN, Neb. (DTN) -- One of the remaining food companies sued by current and former employees on allegations of wage fixing has reached a settlement with the workers, according to a recent court filing.
American Foods Group LLC asked the U.S. District Court for the District of Colorado on May 24, 2024, to suspend ongoing legal proceedings in a lawsuit filed in November 2022.
A group of food company employees filed a class-action lawsuit alleging that a group of food companies conspired to keep wages low, damaging the employees' future earnings potential.
At the end of April 2024, nine of the companies sued filed motions to dismiss the case. In March 2024, JBS USA Food Company and Tyson Foods reached a combined $127.3 million settlement with the plaintiffs.
American Foods Group announced it too had reached a settlement. The details of that agreement had not been filed in court as of May 30.
"The parties further stipulate that all proceedings between them be suspended by the court consistent with the terms of their settlement agreement," the company said in its filing, "which will be provided to the court in connection with class plaintiffs' motion for preliminary approval of the proposed settlement."
American Foods Group operates food plants in Missouri, Wisconsin, South Dakota, Nebraska and Minnesota.
Companies that have not yet filed dismissal motions or announced settlements include Cargill Inc.; Cargill Meat Solutions Corp.; Hormel Foods Corp.; National Beef Packing Company; Iowa Premium LLC; Agri Stats Inc.; Webber, Meng, Sahl and Company Inc.; and WMS and Company Inc.
Motions to dismiss were filed in the federal court by nine of the remaining 17 companies that have not settled in the lawsuit.
That includes Agri Beef Co., Washington Beef LLC, Quality Pork Processors Inc., Rochelle Foods LLC, Indiana Packers Corporation, Greater Omaha Packing Co. Inc., Smithfield Foods Inc., Smithfield Packaged Meats Corp. and Nebraska Beef Ltd.
The nine companies filing motions generally argue they were not part of the wage-fixing conspiracy alleged by the employees just because they provided information to industry wage indexes alleged to have been used to fix wages.
In August 2023, the plaintiffs announced a $10 million settlement with Seaboard Foods and an agreement with Triumph Foods to cooperate in the ongoing case against the other companies. In addition, the plaintiffs agreed to a $1.3 million settlement with Perdue Farms Inc.
According to the settlement announced in federal court in March 2024, Tyson agreed to pay $72.3 million and JBS $55 million -- bringing the total to about $138.5 million.
The original lawsuit alleged that since at least 2014, the companies "conspired and combined to fix and depress" compensation to employees at about 140 red-meat processing plants across the country, in violation of the Sherman Antitrust Act. The companies named in the lawsuit produce about 80% of all red meat sold to U.S. consumers.
The lawsuit said senior executives at the companies established and approved hourly wage rates, annual salaries and employment benefits.
The complaint said the companies conducted "secret" compensation surveys and held "secret" annual meetings that included executives from the companies named in the lawsuit.
The lawsuit alleges the companies were in direct communication with senior executives who "extensively discussed, compared, and in turn, further suppressed compensation through email and phone communications."
The employees said the companies entered into no-poach agreements, preventing the companies from recruiting the other companies' employees.
Read more on DTN:
"Companies Seek Wage-Fixing Case Exit," https://www.dtnpf.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
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