[Federal Register Volume 88, Number 101 (Thursday, May 25, 2023)]
[Notices]
[Pages 34030-34063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11058]
[[Page 34029]]
Vol. 88
Thursday,
No. 101
May 25, 2023
Part III
Department of Justice
-----------------------------------------------------------------------
Antitrust Division
United States v. Cargill Meat Solutions Corp., et al.; Proposed Final
Judgment and Competitive Impact Statement; Notice
Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 /
Notices
[[Page 34030]]
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Cargill Meat Solutions Corp., et al.; Proposed
Final Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation, and Competitive Impact Statement have been filed with the
United States District Court for the District of Maryland in United
States of America v. Cargill Meat Solutions Corp., et al., Civil Action
No. 1:22-cv-01821. On July 25, 2022, the United States filed a
Complaint against three poultry processors as well as a data consultant
and its president to end a long-running conspiracy in the poultry
processing industry. The Complaint alleged that poultry processors
collectively employing more than 90 percent of all poultry processing
plant workers in the United States conspired to collaborate with and
assist their competitors in making decisions about worker compensation,
including wages and benefits, and to exchange information about current
and future compensation plans for their processing plant workers, in
violation of section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint
also alleged that data consultants facilitated the processors'
collaboration and compensation information exchanges in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1.
On May 17, 2023, the United States filed an Amended Complaint,
which added settling defendants George's, Inc. and George's Foods, LLC
(collectively ``George's''), alleging that George's and the
conspirators participated in the conspiracy to exchange information
about wages and benefits for poultry processing plant workers and
collaborated with their competitors on compensation decisions.
The proposed Final Judgment, filed at the same time as the Amended
Complaint, requires George's to cease its information-sharing and
facilitation of such conduct. In addition, George's is prohibited from
sharing or facilitating the sharing of competitively sensitive
information among competitors and is required to cooperate with the
United States' ongoing investigation. Additionally, under the terms of
the proposed settlement with George's, the court will appoint an
external monitor to ensure compliance with the terms of the settlement
and the antitrust laws. George's will also pay restitution to affected
poultry processing workers.
Copies of the Amended Complaint, proposed Final Judgment, and
Competitive Impact Statement are available for inspection on the
Antitrust Division's website at http://www.justice.gov/atr and at the
Office of the Clerk of the United States District Court for the
District of Maryland. Copies of these materials may be obtained from
the Antitrust Division upon request and payment of the copying fee set
by Department of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the Antitrust Division's website,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments should be submitted in English and
directed to Chief, Civil Conduct Task Force, Antitrust Division,
Department of Justice, 450 Fifth Street NW, Suite 8600, Washington, DC
20530 (email address: [email protected]).
Suzanne Morris,
Deputy Director Civil Enforcement Operations, Antitrust Division.
United States District Court for the District of Maryland
United States of America, 450 Fifth Street NW, Washington, DC
20530, Plaintiff; v. Cargill Meat Solutions Corporation, 825 East
Douglas Avenue, 9th Floor, Wichita, KS 67202, Cargill, Inc., 15407
McGinty Road West, Wayzata, MN 55391, G. Jonathan Meng, 734 Wild
Rose Road, Silverthorne, CO 80498, George's, Inc., 402 West Robinson
Avenue, Springdale, AR 72764, George's Foods, LLC, 19992 Senedo
Road, Edinburg, VA 22824, Sanderson-Wayne Farms, LLC, 4110
Continental Drive, Oakwood, GA 30566, Webber, Meng, Sahl and
Company, Inc., d/b/a/WMS & Company, Inc., 1200 E High Street, Suite
104, Pottstown, PA 19464, Defendants.
Civil Action No.: 22-cv-1821
(Gallagher, J.)
Amended Complaint
Americans consume more poultry than any other animal protein.
Before poultry is prepared for consumption, it passes through a complex
supply chain that includes hatcheries that hatch chicks from eggs;
growers that raise poultry until the birds are ready for slaughter; and
poultry processing plants where workers perform dangerous tasks under
difficult conditions to slaughter and pack chickens and turkeys for
distribution to consumers.
Poultry processing plant workers deserve the benefits of free
market competition for their labor. For at least two decades, however,
poultry processors that employ more than 90 percent of all poultry
processing plant workers in the United States conspired to (i)
collaborate with and assist their competitors in making decisions about
worker compensation, including wages and benefits; (ii) exchange
information about current and future compensation plans; and (iii)
facilitate their collaboration and information exchanges through data
consultants. This conspiracy distorted the normal bargaining and
compensation-setting processes that would have existed in the relevant
labor markets, and it harmed a generation of poultry processing plant
workers by artificially suppressing their compensation.
Poultry processors have also engaged in deceptive practices
associated with the ``tournament system.'' Under this system, growers
are penalized if they underperform other growers, but poultry
processors control the key inputs (like chicks and seed) that often
determine a grower's success. Poultry processors often fail to disclose
the information that growers would need to evaluate and manage their
financial risk or compare offers from competing processors.
To enjoin this unlawful conduct and seek other appropriate relief,
the United States of America brings this civil action under Section 1
of the Sherman Act, 15 U.S.C. 1, and Section 202(a) of the Packers and
Stockyards Act, 7 U.S.C. 192(a).
Table of Contents
I. Nature of the Action
II. Jurisdiction and Venue
III. Terms of Reference
IV. Defendants
A. Cargill
B. Sanderson
C. Wayne
D. George's
E. WMS
F. Jonathan Meng
G. Co-Conspirators
V. Factual Allegations
A. Poultry Industry Background
1. Hatcheries and Growers
2. Poultry Processing Plants
3. Poultry Processing Plant Workers and Compensation
a. Poultry Processing Plant Work and Workers
b. Competition for Poultry Processing Plant Workers
c. Setting and Adjusting Plant Worker Compensation
B. Defendants' Conspiracy To Collaborate on Compensation
Decisions, Share Compensation Information, and Use Consultants To
Facilitate Their Conspiracy
1. WMS Poultry Industry Survey Group
a. WMS Survey Group History, Rules, and Control by Processor
Conspirators
b. Compensation Data Exchanged Through WMS Survey Group
[[Page 34031]]
c. WMS Survey Group Exchanges by Year, Defendant, and Type of
Information Exchanged in Surveys and In-Person Meetings
2. Direct Processor-to-Processor Collaboration and Information
Exchanges
a. Chicken Industry Wage Index (``CHIWI'') Exchange
b. U.S. Poultry & Egg Association Member Processors' Exchanges
c. Processor Conspirators' Ad Hoc Direct Exchange
3. Exchange of Compensation Information Through Consultant Co-
Conspirator 1
4. Processors' Collaboration and Assistance on Compensation
5. Processors Recognize Their Agreement Likely Violated the
Antitrust Laws and Attempt To Cover It Up
C. Defendants Sanderson's and Wayne's Deceptive Practices Toward
Growers
VI. Elements of the Sherman Act Claim
A. The Agreement To Collaborate on Compensation Decisions,
Exchange Compensation Information, and Facilitate Such Collaboration
and Exchanges
B. Primary Poultry Processing Plant Employment Is a Relevant
Labor Market
C. The Geographic Markets for Poultry Processing Plant Labor
D. Market Power
E. Anticompetitive Effects: Processor Conspirators' Conspiracy
Anticompetitively Affected Decisions About Compensation for Plant
Processing Workers
VII. Violations Alleged
VIII. Requested Relief
I. Nature of the Action
1. From chicken noodle soup to golden-roasted Thanksgiving turkey,
Americans consume more poultry than any other animal protein, including
beef and pork.
2. By the time poultry is served in a home kitchen, restaurant, or
school cafeteria, it has passed through a complex supply chain that
includes hatcheries, growers (i.e., farmers who raise live poultry for
meat or eggs), and poultry processors, which employ hundreds of
thousands of workers who process chicken or turkey for distribution to
customers or secondary processing plants.
3. Poultry processing plant workers play a vital role in the
poultry meat supply chain. These workers catch, slaughter, gut, clean,
debone, section, and pack chickens and turkeys into saleable meat. Many
of them withstand physically demanding and often dangerous working
conditions. For example, a ``live hanger'' in a poultry processing
plant grabs, lifts, and hangs for slaughter about 30 living birds per
minute, as each bird claws, bites, and flaps its wings. These workers
risk injuries ranging from exhaustion to mutilation to provide for
themselves and their families. In doing so, they help make food
available to families nationwide.
4. Like all workers, poultry processing plant workers deserve the
benefits of free market competition for their labor, including wages
and benefits that are set through a competitive process that is free
from anticompetitive coordination between employers. Instead, for at
least the past 20 years, poultry processors that dominate local
employment markets for poultry processing plant workers and employ more
than 90 percent of all such workers in the United States collaborated
on and assisted each other with compensation decisions. Their
conspiracy included sharing data and other information--directly and
through consultants--about their current and future compensation plans.
Rather than make compensation decisions independently, these processors
chose to help each other at the expense of their workers. As a result,
they artificially suppressed compensation in the labor markets in which
they compete for poultry processing plant workers, and deprived a
generation of poultry processing plant workers of fair pay set in a
free and competitive labor market.
5. Through communications over decades, which occurred in large
groups, small groups, and one-to-one, these poultry processors agreed
that they would assist each other by discussing and sharing information
about how to compensate their poultry processing plant workers. As one
poultry processor wrote to another about sharing wage rates, ``I am
interested in sharing this information with you. . . . I am hoping we
can develop a collaborative working relationship.'' The poultry
processors' collaboration on compensation decisions, including their
exchange of compensation information, took many forms over the years of
the conspiracy. For example:
a. An employee of one poultry processor emailed eight competitors
that ``It's that time of year already'' and requested ``your companies
projected salary budget increase recommendation.'' Her coworker added,
``Seriously -any info you can give us will be helpful.'' \1\
---------------------------------------------------------------------------
\1\ In quotes throughout the Amended Complaint, all spelling and
grammatical errors are transcribed as they were found in the primary
source text, without [sic] notions.
---------------------------------------------------------------------------
b. A group of competing poultry processors exchanged
``disaggregated raw [identifiable] data regarding the compensation of
hourly-paid workers . . . broken down by plant and location''; base pay
and bonuses ``for each specific salaried position'' included in their
survey; any ``planned increase in the salary range for the current
budget year''; any ``planned increase in the salary range for the next
budget year''; the dates of planned future increases; and
``disaggregated, raw data for some benefits.'' Employees of these
poultry processors then met in person and discussed specific
compensation, including attendance bonuses and overtime work payments.
c. When one poultry processor's human resources employee emailed
two competitors to ask ``what your starting rate is for these kids
hired right out of college,'' she noted in the same correspondence that
her employer was ``in the midst of completely revamping our Plant
Management Trainee program.'' Without further prompting, her competitor
shared detailed wage information for its Beginner and Advanced Trainee
program.
d. One poultry processor emailed others, ``I had a question for the
group also. We are trying to determine what is reasonable for salaried
employee to be compensated for working 6 and/or 7 days in a work week
when the plant is running . . . Do you pay extra for these extra days
worked for salaried (exempt) employees?'' and ``If so, how is that
calculated?''
e. Nearly the entire poultry industry has subscribed to exchanges
of information through a data consultant that includes compensation
information that is so disaggregated that industry participants could
determine the wages and benefits their competitors pay for specific
positions at specific plants across the country.
6. These collaborations demonstrate a clear agreement between
competitors to ask for help with compensation decisions and to provide
such help to others upon request. As part of this agreement to
collaborate, the poultry processors shared information about current
and future compensation decisions. They also shared disaggregated and
identifiable information, which could readily be traced to a particular
competitor or even a particular plant.
7. Even apart from their collaboration on compensation decisions,
the poultry processors' information exchanges--standing alone--also
violated the Sherman Act. The poultry processors, both directly and
through data consultants, shared compensation information so detailed
and granular that the poultry processors could determine the wages and
benefits their competitors were paying--and planning to pay--for
specific job categories at
[[Page 34032]]
specific plants. The compensation information the poultry processors
exchanged allowed them to make compensation decisions that benefited
themselves as employers and suppressed competition among them for
workers.
8. Defendants Cargill Meat Solutions Corporation and Cargill, Inc.
(together, ``Cargill''); George's Inc. and George's Foods, LLC
(``George's''); Sanderson-Wayne Farms, LLC, a merged entity made up of
formerly separate firms Sanderson Farms, Inc. (``Sanderson'') and Wayne
Farms, LLC (``Wayne'') \2\ (collectively, the ``Processor
Defendants''), as well as Webber, Meng, Sahl & Co., Inc. (``WMS'') and
WMS President G. Jonathan Meng (``Meng'') (the ``Consultant
Defendants''), participated in this unlawful conspiracy, together with
other poultry processors and another consulting firm.\3\
---------------------------------------------------------------------------
\2\ On July 22, 2022, Cargill and Wayne's parent company,
Continental Grain Co., announced that a joint venture of Cargill and
Wayne had acquired Sanderson and would call the merged entity Wayne-
Sanderson Farms. Cargill and Continental Grain Complete Acquisition
of Sanderson Farms, Cargill, Inc. (July 22, 2022), https://www.cargill.com/2022/cargill-continental-grain-complete-acquisition-sanderson-farms (last accessed May 15, 2023). For the sake of
clarity and convenience, hereafter, this Amended Complaint will
address Cargill, Sanderson, and Wayne separately due to their status
as separate companies during the conduct described.
\3\ The Amended Complaint labels conspirators other than the
Defendants with pseudonyms because the United States has an ongoing
investigation into this conduct.
---------------------------------------------------------------------------
9. The poultry processors kept much of their collaboration and
information exchanges secret in an attempt to hide their
anticompetitive conduct. As a condition for membership in the survey
exchange facilitated by one data consultant, the poultry processors
promised that they would keep the compensation information exchanged
confidential. When the survey group members met to collaborate on
compensation decisions, they asked and expected the data consultant to
leave the room when they discussed current and future compensation
decisions. Even when one processor left the survey due to legal
concerns in 2012, the poultry processors did not end their
anticompetitive conduct; the other survey participants continued
collaborating and exchanging information.
10. When antitrust authorities and private class-actions began to
surface anticompetitive conduct in other parts of the poultry industry,
the poultry processors grew alarmed about the risk that their
conspiracy would be found out. One of them warned the others about ``a
private investigator'' who was asking ``questions about the types of
information we shared at our meeting, the survey and other questions
that I will simply call `general anti-trust fishing' questions. . . .
So just a little reminder that the bad-guys are still out there, and
why we hold strict confidences about discussing wages.''
11. For at least two decades, poultry processors that dominated
local markets for poultry processing plant work and controlled more
than 90 percent of poultry processing plant jobs nationwide agreed to
help each other make decisions about current and future compensation
for their hourly and salaried plant workers, to exchange information
about current and future compensation decisions, and to facilitate such
exchanges through data consultants. The processors used the information
they received through their collaboration and exchanges to make
decisions on compensation for their workers. Indeed, they found it so
useful that when fear of antitrust liability finally motivated several
poultry processors to remove disaggregated compensation information
from their exchanges, one processor complained that the new survey
``has suffered significant obscuring of results . . . and I would ask--
is it still useful information any longer?''
12. The agreement to collaborate on compensation decisions and
exchange information had the tendency and effect of suppressing
competition for poultry processing workers and thereby suppressing
these workers' compensation. The poultry processors' conspiracy is a
scheme among competing buyers of labor (employers) that collectively
possess market power over the purchase of poultry processing plant
labor. By conspiring on decisions about compensation, these firms, with
the assistance of consultants, collaborated to control the terms of
employment of poultry processing plant jobs. Ultimately, the conspiracy
gave the poultry processors the ability to suppress competition and
lower compensation below the levels that would have prevailed in a free
market.
13. The agreement to collaborate with and assist competing poultry
processors in making compensation decisions, to exchange compensation
information, and to facilitate this conduct through consultants is an
unlawful restraint of trade in violation of Section 1 of the Sherman
Act, 15 U.S.C. 1. It should be enjoined.
14. Defendants Sanderson and Wayne have further acted deceptively
to their growers, the farmers responsible for raising the poultry for
slaughter. These Defendants compensate their growers through the
``tournament system,'' under which growers' base compensation is
adjusted up or down depending on how each grower performs relative to
others on defined metrics. But Sanderson and Wayne supply growers with
the major inputs that contribute to growers' performance, such as
chicks and feed, and these Defendants' contracts with growers omit
material information about the variability of the inputs provided to
growers. Because Sanderson and Wayne do not adequately disclose the
risk inherent in their tournament systems to growers, growers cannot
reasonably evaluate the range of potential financial outcomes, manage
their risks, or compare competing poultry processors. This failure to
disclose is deceptive and violates the Section 202(a) of the Packers
and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 192(a).
These deceptions should be enjoined.
II. Jurisdiction and Venue
15. Defendants Cargill, George's, Meng, Sanderson, Wayne, and WMS
have consented to personal jurisdiction and venue in the District of
Maryland.
16. Defendant Cargill, Inc. owns and operates facilities, and
employs workers, in Maryland.
17. The Consultant Defendants sell services to clients throughout
the United States, including in Maryland. The Consultant Defendants'
services included collecting, compiling, and providing data on poultry
processing worker compensation across the United States, including
information about poultry processing workers in Maryland.
18. Each Processor Defendant sells poultry meat throughout the
United States. As of 2022, poultry processing in the U.S. was a $30
billion industry. Each Defendant is engaged in interstate commerce and
activities that substantially affect interstate commerce. The
collaboration between these Defendants in making compensation
decisions, including through exchanges of processing plant compensation
information that involved all Defendants, also substantially affects
interstate commerce.
19. The United States brings this action pursuant to Section 4 of
the Sherman Act, 15 U.S.C. 4, to prevent and restraint Defendants'
violations of Section 1 of the Sherman Act, 15 U.S.C. 1.
20. The Court has subject matter jurisdiction under 28 U.S.C. 1331,
28 U.S.C. 1337, and Section 4 of the Sherman Act, 15 U.S.C. 4, to
prevent and restrain Defendants from violating
[[Page 34033]]
Section 1 of the Sherman Act, 15 U.S.C. 1.
21. Venue is proper in this judicial district under Section 12 of
the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 1391(b), and (c) because
one or more of the Defendants and co-conspirators transacted business,
was found, and/or resided in this District; a substantial part of the
events giving rise to the United States's claims arose in this
District; and a substantial portion of the affected interstate trade
and commerce described herein has been carried out in this District.
The Court has personal jurisdiction over each Defendant under 15 U.S.C.
22, 5.
22. Regarding violations by Defendants Sanderson and Wayne of the
Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C.
181 et seq., the Court has jurisdiction under 28 U.S.C. 1345 and 7
U.S.C. 224.
III. Terms of Reference
23. This Amended Complaint refers to the consultants and poultry
processors involved in the conspiracy as follows:
24. The consultant conspirators include Defendants WMS and G.
Jonathan Meng (together, the ``Consultant Defendants'') and Consultant
Co-Conspirator 1.\4\
---------------------------------------------------------------------------
\4\ As noted above, co-conspirators have been designated with
pseudonyms because the United States has an ongoing investigation
into this conduct.
---------------------------------------------------------------------------
25. The poultry processor conspirators include Cargill, George's,
Sanderson, and Wayne (together, the ``Processor Defendants''), and
Processor Co-Conspirators 1 through 7 and 9 through 18, inclusive,
which are distinct poultry processing companies.
26. The Processor Defendants, together with Processor Co-
Conspirators 1 through 7 and 9 through 18, inclusive, are the
``Processor Conspirators.''
27. Acts in furtherance of the conspiracy to collaborate with and
assist competitors, to exchange information, and to facilitate such
collaboration and exchanges can be summarized as detailed on the
following page:
Conduct Involved in Conspiracy
------------------------------------------------------------------------
Descriptor Anticompetitive conduct
------------------------------------------------------------------------
Collaboration on Compensation Poultry processors attended in-person
Decisions (``Collaboration meetings and engaged in direct
Conduct''). communications with their competitors to
collaborate with and assist each other
in making compensation decisions,
including through the direct exchange of
compensation information and the
indirect exchange of such information
facilitated by consultants WMS and
Consultant Co-Conspirator 1. Such
compensation decisions and compensation
information exchanges included current
and future, disaggregated, and
identifiable confidential compensation
information related to poultry
processing plant workers. This
collaboration was anticompetitive, and
it suppressed poultry processing plant
worker compensation. Period: 2000 or
earlier to present.
Exchange of Compensation As part of the Processor Conspirators'
Information Facilitated by conspiracy to collaborate on
WMS (``WMS Exchange''). compensation decisions, they paid
Defendants WMS and Jonathan Meng to
facilitate a poultry processing plant
worker compensation survey, designed and
with rules set by the Processor
Conspirators, which included the
exchange of current and future,
disaggregated, and identifiable
confidential compensation information
related to poultry processing plant
workers. This exchange was
anticompetitive, and it suppressed
poultry processing plant worker
compensation. Period: 2000 or earlier to
2020.
Exchange of Compensation As part of the Processor Conspirators'
Information Facilitated by conspiracy to collaborate on
Consultant Co-Conspirator 1 compensation decisions, they submitted
(``Consultant Co-Conspirator to and purchased from Consultant Co-
1 Exchange''). Conspirator 1 current, disaggregated,
and identifiable confidential
compensation information related to
poultry processing plant workers. This
exchange was anticompetitive, and it
suppressed poultry processing plant
worker compensation. Period: 2010 or
earlier to present.
------------------------------------------------------------------------
IV. Defendants
A. Cargill
28. Cargill Meat Solutions Corporation is a Delaware company
headquartered in Wichita, Kansas. Cargill Meat Solutions Corporation
owns poultry processing plants, employs and compensates the workers in
these plants, and employs executives and other representatives that set
compensation for its plant workers throughout the United States.
Cargill Meat Solutions Corporation participated in the anticompetitive
compensation information exchanges with representatives of its
competitors for poultry processing plant workers.
29. Cargill, Inc. is a privately-held company headquartered in
Wayzata, Minnesota. Cargill, Inc. is the parent company of Cargill Meat
Solutions Corporation. Cargill, Inc. participated in the
anticompetitive compensation information exchanges with representatives
of its competitors for poultry processing plant workers.
30. Defendants Cargill, Inc. and Cargill Meat Solutions Corporation
are referred to collectively as ``Cargill,'' unless otherwise noted for
specificity.
31. From at least 2000 until the present, Cargill participated in
the anticompetitive agreement to collaborate with and assist its
competitors in making decisions about compensation for poultry
processing plant workers, including through the exchange of current and
future, disaggregated, and identifiable wage and benefit information,
by engaging in the following conduct in the following years:
a. Collaboration Conduct: at least 2000 to present;
b. WMS Exchange: 2000-2019; and
c. Consultant Co-Conspirator 1 Exchange: 2010 to present.
32. As a result of its anticompetitive conduct, Cargill set and
paid artificially suppressed wages and benefits for its hourly and
salaried poultry processing plant workers.
B. Sanderson
33. Sanderson is a Mississippi company headquartered in Oakwood,
Georgia. Continental Grain Company is the controlling shareholder of
Sanderson. Sanderson owns poultry processing plants, employs and
compensates the workers in these plants, and employs executives and
other representatives that set compensation for its plant workers
throughout the United States.
34. From at least 2000 until the present, Sanderson participated in
the anticompetitive agreement to collaborate with and assist its
competitors in making decisions about compensation for poultry
processing plant workers, including through the exchange of current and
future, disaggregated, and identifiable wage and benefit information,
by engaging in the
[[Page 34034]]
following conduct in the following years:
a. Collaboration Conduct: at least 2000 to present;
b. WMS Exchange: 2000-2011; and
c. Consultant Co-Conspirator 1 Exchange: 2010 to present.
35. As a result of its anticompetitive conduct, Sanderson set and
paid artificially suppressed wages and benefits for its hourly and
salaried poultry processing plant workers.
C. Wayne
36. Wayne is a Delaware company headquartered in Oakwood, Georgia.
Continental Grain Company is the controlling shareholder of Wayne.
Wayne owns poultry processing plants, employs and compensates the
workers in these plants, and employs executives and other
representatives that set compensation for its plant workers throughout
the United States.
37. From at least 2000 until the present, Wayne participated in the
anticompetitive agreement to collaborate with and assist its
competitors in making decisions about compensation for poultry
processing plant workers, including through the exchange of current and
future, disaggregated, and identifiable wage and benefit information,
by engaging in the following conduct in the following years:
a. Collaboration Conduct: at least 2000 to present;
b. WMS Exchange: 2000-2019; and
c. Consultant Co-Conspirator 1 Exchange: 2010 to present.
38. As a result of its anticompetitive conduct, Wayne set and paid
artificially suppressed wages and benefits for its hourly and salaried
poultry processing plant workers.
D. George's
39. George's, Inc. is a privately-held Arkansas corporation
headquartered in Springdale, Arkansas. George's, Inc. owns poultry
processing plants, employs and compensates the workers in these plants,
and employs executives and other representatives that set compensation
for its plant workers throughout the United States. George's, Inc.
participated in the anticompetitive compensation information exchanges
with representatives of its competitors for poultry processing plant
workers.
40. George's Foods, LLC is a Virginia corporation headquartered in
Edinburg, Virginia. George's, Inc. and George's Foods, LLC are
affiliates. George's Foods, LLC operates a poultry complex in
Harrisonburg, Virginia, and employs and compensates the complex's
poultry workers. George's Foods, LLC participated in the
anticompetitive compensation information exchanges with representatives
of its competitors for poultry processing plant workers.
41. Defendants George's, Inc. and George's Foods, LLC are referred
to collectively as ``George's,'' unless otherwise noted for
specificity.
42. From at least 2005 until the present, George's participated in
the anticompetitive agreement to collaborate with and assist its
competitors in making decisions about compensation for poultry
processing plant workers, including through the exchange of current and
future, disaggregated, and identifiable wage and benefit information,
by engaging in the following conduct in the following years:
d. Collaboration Conduct: at least 2005 to present;
e. WMS Exchange: 2005-2018; and
f. Consultant Co-Conspirator 1 Exchange: 2010 to present.
43. As a result of its anticompetitive conduct, George's set and
paid artificially suppressed wages and benefits for its hourly and
salaried poultry processing plant workers.
E. WMS
44. WMS is a Pennsylvania corporation located in Pottstown,
Pennsylvania. WMS provides compensation consulting services, including
through the use of compensation surveys, for clients in a broad range
of industries.
45. From 2000 to 2020, WMS administered surveys that facilitated
the Processor Conspirators' conspiracy by gathering, sorting, and
disseminating disaggregated and identifiable information about current
and future compensation for poultry processing plant workers.
46. From 2000 to 2002 and 2004 to 2019, WMS also facilitated,
supervised, and participated in in-person meetings at which the
Processor Conspirators assembled to discuss current and future,
disaggregated, and identifiable poultry processing plant worker
compensation decisions and information.
47. Through its administration of surveys and participation at
annual in-person meetings of the Processor Conspirators, WMS
facilitated the Processor Conspirators' sharing of their confidential,
competitively sensitive information about compensation for poultry
processing plant workers.
48. WMS's involvement in this conspiracy artificially suppressed
compensation for poultry processing plant workers.
F. Jonathan Meng
49. G. Jonathan Meng is an individual residing in the State of
Colorado. Since 2000, Meng has been the President of WMS.
50. From 2000 to the present, Meng has had primary responsibility
at WMS for designing and presenting compensation surveys, collecting
survey data, developing new clients, maintaining client relationships,
and obtaining payment for services rendered.
51. Meng personally administered and supervised WMS's surveys,
which disseminated the Processor Conspirators' current and future,
disaggregated, and identifiable information about compensation for
poultry processing plant workers.
52. From 2000 until 2019, Meng, representing WMS, also facilitated,
supervised, and participated in in-person meetings at which the
Processor Conspirators assembled to discuss current and future,
disaggregated, and identifiable poultry processing plant worker
compensation information.
53. By administering and supervising the surveys and meetings of
the poultry processing defendants, Meng facilitated the Processor
Conspirators' sharing of confidential, competitively sensitive
information about compensation for poultry processing plant workers.
54. Meng's facilitation of this conspiracy artificially suppressed
compensation for poultry processing plant workers.
G. Co-Conspirators
55. Several entities conspired with the Defendants during the
following years to collaborate with and assist competing poultry
processors in making compensation decisions, to exchange compensation
information, and to facilitate this conduct: Consultant Co-Conspirator
1 (at least 2010 to the present); Processor Co-Conspirator 1 (at least
2002 to the present); Processor Co-Conspirator 2 (at least 2015 to the
present); Processor Co-Conspirator 3 (at least 2010 to the present);
Processor Co-Conspirator 4 (at least 2004 to the present); Processor
Co-Conspirator 5 (at least 2014 to the present); Processor Co-
Conspirator 6 (at least 2000 to the present); Processor Co-Conspirator
7 (at least 2000 to the present); Processor Co-Conspirator 9 (at least
2014-2015); Processor Co-Conspirator 10 (at least 2009 to the present);
Processor Co-Conspirator 11 (at least 2005 to the present); Processor
Co-Conspirator 12 (at least 2010 to the present); Processor Co-
Conspirator 13 (at least 2009 to the present); Processor Co-Conspirator
14
[[Page 34035]]
(at least 2000 to the present); Processor Co-Conspirator 15 (at least
2000 to the present); Processor Co-Conspirator 16 (at least 2014 to the
present); Processor Co-Conspirator 17 (at least 2019 to the present);
and Processor Co-Conspirator 18 (at least 2000 to the present).
V. Factual Allegations
A. Poultry Industry Background
1. Hatcheries and Growers
56. Poultry are domesticated fowl, including chicken and turkey,
bred for their meat and eggs.
57. Poultry processors own hatcheries, in which they hatch chicks
or poults (baby turkeys) from eggs. Poultry processors supply these
young birds to growers. Growers are farmers who raise the birds to
specifications set by, and with feed and supplies provided by, the
poultry processors with which they contract. When the growers have
finished raising the birds and the birds are ready for slaughter, the
processors pay the growers for their services per pound of poultry.
58. This arrangement allocates substantial risk from the poultry
processors to growers. Many poultry processors historically compensate
growers through a tournament system. Processors control the chicks or
poults, feed, and other inputs that are supplied to growers. The
grower, in addition to raising the chicks, often must make substantial
financial investments to build or improve chicken barns to meet the
processor's specifications. Growers are compensated through a base
payment set in a contract between the processor and the grower. But the
processor can adjust the base payment up or down based on how a grower
compares to other growers (which the processor selects) on production
and efficiency metrics. In practice, these ``performance'' adjustments
make it very difficult for growers to project and manage the risk they
face when entering a contract with a processor--particularly since
processors control the key inputs to poultry growing.
59. Growers' contracts often do not disclose the true financial
risk that the grower faces, including basic information like the number
and size of flocks they are guaranteed. Similarly, growers often do not
receive disclosures that would allow them to assess the tournament
system. Growers often have little or no choice in which processor they
contract with because there are limits to how far live poultry can be
transported, and therefore only processors with nearby facilities are
reasonable options.
2. Poultry Processing Plants
60. Once grown, the birds are packed into trucks and driven to
primary poultry processing plants. Primary poultry processing plants
tend to be built near hatcheries and growing facilities, which are
usually in rural areas.
61. Once the birds arrive at primary processing plants, poultry
processing plant workers take the birds from the trucks and hang,
slaughter, clean, segment, and pack the meat. This work is generally
performed on a poultry processing line, where workers perform the same
task repeatedly. Poultry processing plants are kept at cold
temperatures to preserve the meat processed inside. The machinery
necessary to process poultry carcasses and meat products is very loud,
making it difficult for workers on the poultry processing line to hear
and communicate. Slaughtering and packing poultry often results in
blood and gore covering work surfaces and workers' protective gear.
Moreover, the meat and byproducts of the slaughter process create a
foul-smelling atmosphere that is slippery from fat, blood, and other
byproducts and waste from the slaughter process.
62. Processing plants employ salaried workers to manage this
slaughter process and ensure that the processing plants comply with
relevant health and safety laws, among other things.
63. Meat from the birds slaughtered in primary processing plants is
either sold to customers (e.g., grocery stores, restaurants, and other
retailers) or sent to secondary processing plants at which the meat is
further prepared for consumption, such as being sliced for deli packs
or breaded.
3. Poultry Processing Plant Workers and Compensation
a. Poultry Processing Plant Work and Workers
64. According to the U.S. Bureau of Labor Statistics, over 240,000
people worked in the U.S. poultry processing industry as of June 2020.
Some of these workers worked in Maryland.
65. Many poultry processing plant jobs require physical stamina
because they are performed standing on the poultry processing line.
These jobs also demand tolerance of unpleasant conditions including low
temperatures, bad odors, blood and viscera, loud machinery noise, and,
in some cases, dim lighting. Poultry processing plant work also can be
dangerous, including because of the risk of injury from cutting
instruments and repetitive-motion tasks. Many workers must stand on the
processing line repeating the same rapid motions continuously. These
motions can involve handling live, clawed birds, heavy lifting, and the
use of sharp cutting instruments, all of which are physically demanding
and involve a high risk of injury.
66. In a competitive labor market, employers compete to attract and
retain workers--much like manufacturers compete to attract potential
customers in a downstream product market. Poultry processing plants
compete with each other to attract workers who can perform this
difficult work, and potential and current poultry processing plant
workers seek out employers that will provide the best compensation for
their labor.
67. Many jobs in poultry processing plants present unique
characteristics that make it difficult for workers to switch to a
different kind of job. The difficulty of switching to other jobs is
enhanced by the specific skills developed and circumstances faced by
workers in poultry processing firms. Workers in poultry processing
plants often face constraints that reduce the number of jobs and
employers available to them, limiting the number of competitors for
their labor. Poultry processing plant workers also share common
attributes that they bring with them to their jobs and develop common
skills when performing these jobs. As a result of these poultry
processing plant workers' common constraints, attributes, and skills,
poultry processors are distinguishable from other kinds of employers
from the perspective of poultry processing plant workers.
68. Common constraints facing poultry processing plant workers:
Many poultry processing plant workers face constraints in finding
employment that greatly restrict their job options. For these workers,
poultry processing plants offer opportunities that are not available in
other industries. Workers who cannot speak, read, or write English or
Spanish, for example, can still perform poultry processing plant line
work, which is primarily physical labor and done under conditions so
loud as to make speaking and hearing difficult. Similarly, workers with
criminal records, probation status, or lack of high school or college
education are often able to work at poultry processing plants even when
other jobs are not available to them. These workers distinguish poultry
processors, whose doors remain open to them, from employers in other
industries, in which jobs are not available to them.
69. In addition, many poultry processing plants are located in
rural areas, in which workers often have
[[Page 34036]]
fewer job alternatives--especially for full-time, year-round work--as
compared to workers in other areas.
70. Poultry processing workers' inability to access jobs in many,
and sometimes any, other industries that would provide them with steady
and year-round work is evidenced by the conditions these workers
tolerate.
71. Common attributes of poultry processing plant jobs: As
discussed above, poultry processing plant workers must be able to
tolerate particularly challenging working conditions. An employer that
requires a particular trait in its employees will generally recruit and
retain workers with that trait by offering compensation or other
inducements that are more attractive than those offered to these
workers by employers that do not value that trait. This makes such an
employer distinguishable and more appealing to such employees, who have
that trait. The physical stamina and other attributes required for
poultry processing plant work mean that poultry processors will
compensate or otherwise reward workers who possess those attributes
more highly than employers in other industries. From the perspective of
the prospective poultry processing plant worker, poultry processing
plant jobs are distinguishable from and likely more valuable than other
lower-paid work that does not value and reward such attributes. In
other words, other jobs are not reasonable substitutes for poultry
processing plant jobs.
72. Common skills of poultry processing plant workers: Poultry
processing plant workers develop special skills on the job. Workers
learn these skills through the repetitive and, at times, difficult or
dangerous tasks they perform on the poultry processing line. Poultry
processing plant workers learn how to handle and slaughter live birds,
wield knives and blades, section poultry carcasses, clean meat in a
manner consistent with health and safety standards, manage other
workers performing these tasks, examine and repair the necessary
machinery, maintain health and safety standards, and, crucially,
perform these tasks efficiently so as not to slow down the plant line.
Workers in management or other less physically demanding jobs also
build industry-specific skills, including expertise in effective plant
management and retention of employees. Just as with the common
attributes of poultry processing plant workers who take plant jobs, the
common skills of workers who stay and learn plant jobs help to define
the relevant labor market. Not all potential workers can develop these
important skills, and many fail out of poultry processing plant jobs
within weeks. A worker with the skills to succeed on the line is most
valuable to other poultry processing plants--and thus will receive the
most compensation from poultry processors. Thus, from the workers'
perspective, poultry processing plants are not reasonable substitutes
for other employers.
b. Competition for Poultry Processing Plant Workers
73. The Processor Conspirators, which compete to hire and retain
poultry processing plant workers, control more than 90 percent of
poultry processing plant jobs nationwide. In some local areas, they
control more than 80 percent of these jobs.
74. These poultry processors use similar facilities, materials,
tools, methods, and vertically-integrated processes to produce
processed poultry and downstream products in which they compete for
sales to similar sets of customers. They also compete with each other
for processing plant workers.
75. Poultry processors recruit workers in many different ways. They
advertise for workers, use recruitment agencies, and rely on word of
mouth or personal connections, sometimes offering referral bonuses, to
attract friends or family of existing workers to come to their plants.
The processors recruit workers in their plants' local areas but also
more broadly. For example, poultry processors sometimes target workers
in other states and even internationally.
c. Setting and Adjusting Plant Worker Compensation
76. Poultry processors compensate hourly and salaried plant workers
through wages and benefits.
77. Hourly poultry processing plant workers' wages typically
consist of a base pay rate set according to their role, with upward
adjustments or bonuses offered based on factors including seniority,
skill, productivity, and shift time. Salaried poultry processing plant
workers' wages typically consist of annual salaries and may include
annual or performance bonuses.
78. Processing plants also typically offer benefits to their hourly
and salaried workers. These benefits can include personal leave, sick
leave, health and medical insurance, other types of insurance, and
retirement plans or pensions, among others.
79. Poultry processors also control working conditions within their
plants, which can affect a poultry processing plant worker's job
experience. These conditions include the quality of mechanical and
safety equipment at the plant, temperature, and the speed at which the
plant line moves, which determines the speed at which the workers have
to perform their work.
80. Poultry processors typically make certain compensation-related
decisions at the corporate level, which affect their workers
nationwide. For example, poultry processors generally set overall labor
compensation budgets, some plant worker wages, and some plant worker
benefits in a centralized manner and at the national level. To
illustrate, an executive at a poultry processor who manages
compensation for the entire company may determine the health benefits
for all of the line workers at all of the company's plants.
81. Poultry processors also typically adjust some wages and
benefits at the corporate level, but for a regional or local area, on
the basis of local factors. For example, an executive managing
compensation for an entire poultry processing company may consider a
particular plant's needs and the pay at other nearby plants when
deciding the base rate per hour for shoulder cutters on the plant line.
As a result, shoulder cutters across all of the processor's plants may
receive different base rates.
B. Defendants' Conspiracy To Collaborate on Compensation Decisions,
Share Compensation Information, and Use Consultants To Facilitate Their
Conspiracy
82. The Processor Conspirators, facilitated by the Consultant
Defendants and Consultant Co-Conspirator 1, collaborated on
compensation decisions, including by exchanging competitively sensitive
information about plant worker compensation. The exchange of such
compensation information, much of it current or future, disaggregated,
or identifiable in nature, allowed the poultry processors to discuss
the wages and benefits they paid their poultry processing plant
workers. This section of the Amended Complaint first describes the
nature of their conspiracy in broad terms and then details some
specific examples of the conspirators' collaboration and exchanges of
information.
83. The Processor Conspirators collaborated with and sought
assistance from each other when making decisions about wages and
benefits for their poultry processing plant workers. These decisions
should have been made independently. As a result, rather than competing
for workers through better wages or benefits, the Processor
Conspirators helped each other make compensation decisions.
[[Page 34037]]
84. The compensation information that poultry processors exchanged
included information for both hourly and salaried plant jobs. Through
the exchanges, a poultry processor could learn its competitors' base
wage rates for a host of different poultry processing plant jobs, from
live hangers to shoulder cutters to plant mechanics.
85. Through emails, surveys, data compilations, and meetings, the
Processor Conspirators assembled a ``map'' of poultry processing plant
worker compensation across the country. This ``map'' was broad enough
to show nationwide budgets and granular enough to show compensation at
individual poultry processing plants. The exchanges allowed the poultry
processors to learn not only the current state of compensation in their
industry but also, in some cases, plans for the next year's
compensation. The poultry processors exchanged information about
nationwide, regional, and local wages and benefits.
86. As one example, in December 2009, Processor Co-Conspirator 18's
Director of HR emailed Processor Co-Conspirator 14's Compensation
Manager seeking a chart of information about Processor Co-Conspirator
14's current start rates and base rates for certain workers at specific
Processor Co-Conspirator 14 plants in Maryland, Delaware, Virginia,
North Carolina, South Carolina, Tennessee, Kentucky, and Alabama.
Processor Co-Conspirator 18's Director of HR also asked Processor Co-
Conspirator 14's Compensation Manager, ``if you have negotiated,
scheduled increases please list, or if it is a non-union facility and
they have an annual increase just tell me that and what month.'' In the
Processor Co-Conspirator 18 employee's own words, the purpose of this
request, and the survey Processor Co-Conspirator 18 was building at the
time (the Chicken Industry Wage Index, discussed below), was ``to use
the data to set wage rates and use when negotiating with the Union. . .
. I am interested in sharing this information with you. . . . I am
hoping we can develop a collaborative working relationship. I
appreciate you taking the time to speak to me today and supplying this
information to me'' (emphasis added). Processor Co-Conspirator 14
responded, ``See completed information below,'' filling out the chart
as its competitor and collaborator Processor Co-Conspirator 18
requested.
87. The conspiracy reduced incentives for the Processor
Conspirators to bid up salaries to attract experienced workers or
retain workers that might have left for other processing plants. The
detailed knowledge of their competitors' current and future
compensation gave each Processor Conspirator a path to paying its own
poultry processing plant workers less than it would have absent the on-
demand access they possessed to current and future, disaggregated, and
identifiable information about its competitors.
88. The Processor Conspirators took pains to keep their
collaboration secret, and they controlled which processors could
participate in their information exchanges.
89. The conspiracy brought together rival poultry processors that
competed with each other for workers. In a functioning labor market,
the Processor Conspirators would have avoided sharing such
confidential, competitively-sensitive compensation information. Their
agreement distorted the mechanism of competition between poultry
processors for poultry processing plant workers. This competitive
distortion resulted in compensation that was not determined
competitively but rather was suppressed--less than what workers would
have been paid but for the anticompetitive conduct.
90. Unlike the Processor Conspirators, many of which are large,
sophisticated corporate entities, the poultry processing plant workers
lacked access to a comparable ``map'' of poultry processing plant
compensation. To understand the wages they could earn, whether at
plants in their local region or far across the country, workers had to
rely on word-of-mouth or their own time- and labor-intensive research.
These workers suffered from deep information asymmetries as a result of
the Processor Conspirators' and Consultant Defendants' anticompetitive
conduct.
1. WMS Poultry Industry Survey Group
91. From at least 2000 to 2020, a group of poultry processors,
including all Processor Conspirators, agreed to participate in an
exchange of compensation information facilitated by Defendant WMS (the
``WMS Survey Group'').
92. Through the WMS Survey Group, all of the Processor Conspirators
exchanged current and future, disaggregated, and identifiable
information about their plant workers' wages and benefits. They also
met annually in person to discuss these exchanges. At these meetings,
the Processor Defendants shared additional compensation information and
collaborated on compensation decisions.
a. WMS Survey Group History, Rules, and Control by Processor
Conspirators
93. Before 2000 and potentially as early as the 1980s, many of the
Processor Conspirators, including Defendants Cargill, Sanderson, and
Wayne, as well as Processor Co-Conspirators 6, 7, 14, 15, 17, and 18,
participated in a group similar to the WMS Survey Group, but in which
they directly exchanged compensation data with each other without the
participation of WMS.
94. Beginning in 2000, the Processor Conspirators hired WMS and
Defendant Jonathan Meng to provide a veneer of legitimacy for their
collaboration and information exchange.
95. Meng believed that in hiring him and WMS, the Processor
Conspirators were not trying to comply with the antitrust laws, but
instead were trying ``to establish the appearance of compliance with
the Safe Harbor guidelines and antitrust law and obtain compensation
data in a matter that sometimes seemed permissible.'' By ``Safe
Harbor,'' Meng was referring to guidance antitrust authorities have
provided about how companies can reduce the likelihood that an exchange
of information between competitors is unlawful. Although this guidance
does not immunize any competitor information exchange from the
antitrust laws (and has never done so), the Defendants and Co-
Conspirators were sharing the type of information that the guidance
specifically identified as likely to violate the antitrust laws.
96. While Defendant WMS began administering the survey in 2000--
issuing the survey forms, receiving responses from the participants,
distributing the results, and presenting them in person every year at
their annual meeting--the Processor Conspirators together controlled
the categories of compensation information included in the survey and
the requirements for group membership. The processors made these
decisions through the WMS Survey Group's Steering Committee, on which
Processor Co-Conspirators 6, 7, 14, 15, and 18 sat on a rotating basis
from 2000 through 2020. The Steering Committee, along with the other
WMS Survey Group participants, including Defendants Cargill, George's,
Sanderson, and Wayne and Processor Co-Conspirators 3 and 17, voted on
potential new members in the WMS Survey Group. Thus, while WMS
facilitated this scheme, including by collecting the information and
tabulating the results, the Processor Conspirators themselves decided
to collaborate on compensation decisions
[[Page 34038]]
and exchange anticompetitive compensation information.
97. Processor Co-Conspirator 5's successful attempt to join the WMS
Survey Group in October 2014 highlights the group's membership
standards and what motivated poultry processors from across the country
to join. Processor Co-Conspirator 5's representative emailed Defendant
WMS and Processor Co-Conspirators 6, 7, and 18, explaining, ``I was
recently told of a committee/group that had gotten together in the past
to talk about compensation in the poultry industry. I know we deal with
a slightly different bird here at [Processor Co-Conspirator 5] than
[Processor Co-Conspirator 6] and probably the majority in your group,
but I would be interested in participating in that group if you think
it would be appropriate. . . . If you're open to Midwestern Turkey
company participating in this . . . I'd love to be considered.'' An
executive from Processor Co-Conspirator 6 responded, volunteering to
send the request to the Steering Committee and noting that participants
in the survey ``need[ ] to meet certain requirements that indicate you
fit into the data study (ex. Number of plants, etc. . .).'' After some
discussion among Defendant WMS and Processor Co-Conspirators 6, 7, 14,
and 18, an executive from Processor Co-Conspirator 7 noted,
``Traditionally, if they meet the size criteria and there are no
`naysayers' from the existing party, they get the welcome handshake,
no?''
98. In contrast, Meng detailed what occurred when, in 2014, some of
the WMS participants considered including ``red meat processing
complexes'' in the survey: the ``processors ultimately rejected that
possibility.'' Meng stated in a sworn declaration to this Court, ``The
reason why those processors declined to include the red meat processors
in the [WMS Survey Group] is because the poultry processing labor
market is distinct from the red meat processing labor market. Several
of those processors told me this, and it is also evident to me from my
own review of the markets.'' \5\
---------------------------------------------------------------------------
\5\ Meng filed his declaration before this Court on February 4,
2022 as ECF No. 580-4 in Jien v. Perdue Farms, Inc., 19-cv-2521 (D.
Md.).
---------------------------------------------------------------------------
99. Members of the WMS Survey Group were required to attend each
annual in-person meeting as a condition of participating in the
compensation collaboration and information-exchange group. If a poultry
processor did not attend regularly, it could be kicked out. As an
executive for Processor Co-Conspirator 7 explained, ``Normally, any
company that doesn't participate in the survey and attend for 2
consecutive years is removed from participation.'' This policy
demonstrates that the opportunity to collaborate in person was an
important feature of the WMS Survey Group.
b. Compensation Data Exchanged Through WMS Survey Group
100. Attendees at the annual WMS Survey Group in-person meeting
brought their current and future, disaggregated, and identifiable
compensation data with them. The attendees then discussed that
information confidentially. As one 2009 communication from Processor
Co-Conspirator 6 to Defendants Cargill, George's, Sanderson, and Wayne,
Processor Co-Conspirators 1, 4, 7, 15, and 18, and Former Processor Co-
Conspirator 2 put it: ``Hope all are planning to be there for the
meeting. Just a reminder to bring you Data manual in case others have
questions for you concerning your data. Please be prepared to discuss
survey issues, questions, and details with WMS. We will also be sharing
information in a round table discussion. These discussions are expected
to be kept confidential'' (emphasis added).
101. As Meng explained, ``In earlier years, the attendees typically
brought this data to the roundtable sessions in hard-copy form using
large binders. In later years, the attendees brought their laptop
computers, which contained all the compensation data in electronic
form.''
102. Through the WMS Survey Group, the Processor Defendants,
facilitated by Defendant WMS, exchanged current and future,
disaggregated, and identifiable data about their poultry processing
plant worker compensation on an annual basis. The Processor Defendants
gave each other accurate, detailed, and confidential information: as
Defendant George's put it, ``The information obtained through
participation can't be overstated.''
103. Through a single annual WMS survey or potentially a single in-
person meeting, a processor could understand trends in poultry
processing plant worker compensation nationwide. This information was
especially important to processors competing for workers willing to
move, even internationally, for plant work. But the Processor
Conspirators also could compare notes on plant compensation in a
particular local area to understand, for example, how one processor's
base wage rate for line workers in a particular county compared to a
nearby competitor's.
104. As detailed below, over many years, the poultry processors in
the WMS Survey Group used the surveys and in-person meetings to compare
planned future raises or changes in plant worker compensation. WMS's
Meng explained that ``members of the [WMS Survey Group] said they
wanted to know how much and when their competitors were planning to
increase salaries and salary ranges.'' Comparing processors'
compensation projections from the past year against their actual
compensation levels in the current year revealed whether the Processor
Conspirators had held to the prior year's projections, making any
deviations from prior exchanged information easily detectible. This
ability to check the information shared across time encouraged the
participants to submit accurate information, because deviations between
projected and actual compensation levels would be apparent. The
Processor Conspirators' sharing of future compensation plans could also
have disincentivized them from making real-time compensation changes to
better compete against each other, maintaining wages at their projected
levels and suppressing wages that might otherwise have risen through
natural, dynamic competition.
105. From 2005 through 2017, the WMS survey showed future data,
such as the median and average future salary merit increase for each
company involved in the survey. From 2006 through 2019, the surveys
included an additional column that allowed for easy comparison between
the actual current year's percentage changes and the changes that had
been projected in the previous year's survey. This enabled the survey
participants to monitor whether their competitors adhered to the
previous year's forecasts.
106. The Processor Conspirators discussed other compensation
information during their face-to-face meetings. A 2015 email from
Processor Co-Conspirator 18 to fellow WMS Steering Committee members
and Processor Co-Conspirators 6, 7, and 14, stated, ``As you know the
survey results do not provide hourly production projected budgets''--
i.e., future compensation information for hourly production line
workers--``and this is typically a discussion during the roundtable
sessions.'' Even more explicit is an internal Processor Co-Conspirator
18 email from 2005, in which one executive explained to another, ``The
survey results will be shared at the meeting and we can get the 10th
percentile and the other company's avg minimum of the range. I believe
there are other poultry companies paying below our lowest salary.
Although it won't be published in the
[[Page 34039]]
survey results [the Processor Co-Conspirator 18 meeting participant]
can also informally ask what minimum starting rates are.'' Again, this
email exchange demonstrates that the opportunity to collaborate with
their competitors in person was a key feature of the WMS Survey Group.
107. Meng's presentations at the WMS in-person meetings also
featured current compensation information. For example, he explained in
his sworn declaration, ``Specifically, those PowerPoint presentations
focused on how the compensation data reported in the current year for
both salaried and hourly-paid workers compared to the prior year or two
years.''
108. Further, Meng stated that at the in-person WMS meetings, ``the
private roundtable sessions that excluded me involved discussions
between members of the [Processor Conspirators] regarding their
compensation practices. Those discussions addressed, among other
issues, the results of the [WMS surveys], the compensation data that
particular individual processors had reported to the Survey, and plans
for future compensation rates for salaried and hourly-paid workers.''
109. The Group's 2009 ``Operating Standards'' provided that each
participating poultry processor must ``[a]gree and ensure that shared
survey data or other information from discussions will be used and
treated in a `confidential' manner and definitely should not be shared
with companies not participating in the survey. Failure to meet these
requirements will result in immediate removal from the survey group.''
This condition for joining the WMS Survey Group shows that the
participants considered the information exchanged to be nonpublic and
restricted to survey participants.
110. Meng willingly participated in the processors' violation of
antitrust law. To help create a false veneer of compliance with the
antitrust laws, Meng would occasionally make statements that WMS's
product ``complied with legal requirements.'' In August 2012, when the
Steering Committee decided to make a change to the survey to distribute
disaggregated and identifiable data regarding hourly workers, Meng
raised a concern that this would not comply with antitrust agency
guidance on information exchanges. Rather than forego exchanging this
information, the Processor Conspirators on the Steering Committee asked
that Meng not mention his concern to the other processors: ``what about
just letting them respond as to any concerns as opposed to calling it
out?''
c. WMS Survey Group Exchanges by Year, Defendant, and Type of
Information Exchanged in Surveys and In-Person Meetings
111. The following chart lists the Processor Defendants that
participated in the WMS Survey Group by year.
Processor Defendants' WMS Survey Group Participation by Year
------------------------------------------------------------------------
2000-2005 Cargill, Sanderson, and Wayne
------------------------------------------------------------------------
2006-2011............................ Cargill, George's, Sanderson, and
Wayne
2012-2018............................ Cargill, George's, and Wayne
2019................................. Cargill and Wayne
------------------------------------------------------------------------
112. In the remainder of this section, allegations about events or
conduct in each year of the WMS Survey Group apply to all of the
Processor Defendants participating in the WMS Survey Group for that
year, except where otherwise noted.
113. From at least 2000 through 2019, the members of the WMS Survey
Group submitted their confidential compensation data to the WMS-run
survey and received survey results containing their competitors'
confidential compensation data. The types of data gathered and shared
changed during the WMS Survey Group's over-20-year existence. In the
following years, the WMS survey solicited, and the WMS survey results
included:
a. 2000: Confidential information about wages, salaries, benefits,
and bonuses related to ``dozens of positions at poultry complexes,''
including plants, hatcheries, and feed mills;
b. 2001-2004: Current and future, disaggregated, and identifiable
salary and benefits information, as well as current, disaggregated, and
identifiable hourly wage information, including ``what each member of
the [WMS Survey Group] paid, on average, in hourly wages to poultry
processing workers at each of their processing plants.'' The
information was identifiable because the WMS survey included what was
``in effect, a key for identifying the identity of each poultry
processor'';
c. 2005-2012: Future salary information, including the dates and
ranges of planned raises in salary by position, confidential
information about hourly wages, and current and disaggregated benefits
information;
d. 2013-2016: Future salary information, including the dates and
ranges of planned raises in salary by position; current, disaggregated,
and identifiable hourly wage information, which enabled participants to
determine specific competitors' current hourly compensation by plant;
and current and disaggregated benefits information;
e. 2017: Future salary information, including the dates and ranges
of planned raises in salary by position, confidential information about
hourly wages, and current and disaggregated benefits information; and
f. 2018-2019: Confidential compensation information.
114. As discussed above, from 2001 through 2019, the members of the
WMS Survey Group met in person annually to discuss poultry processing
plant compensation. All participants were instructed by the Steering
Committee to bring their individual compensation data with them to
these meetings. From 2001 through 2017, the members of the WMS Survey
Group held roundtable discussions about compensation practices from
which they excluded any third parties, including Meng. In 2018 and
2019, Meng attended all sessions of the in-person meeting.
115. At these in-person WMS Survey Group meetings, the members of
the WMS Survey Group collaborated on, assisted each other with, and
exchanged current and future, disaggregated, and identifiable
information about compensation for poultry processing workers, as
described below:
a. 2007: An ``agenda and group discussion topics'' list for the
2007 WMS Survey Group meeting states ``Are Smoking Cessation Programs
included in your Health benefits? If not, do you have plans to
implement? If currently included, please share your schedule of
benefits.''
b. 2008: Later correspondence between WMS Survey Group Members
states that at the 2008 WMS Survey Group meeting, ``we discussed
companies that are now charging higher insurance premiums for
smokers.''
c. 2011: In 2012, Meng emailed the WMS Survey Group members about
notes they had taken at the prior year's in-person meeting, warning
them that the notes disclosed details that put the processors at risk
of having violated the antitrust laws. Meng wrote to the processors,
``you reference certain positions not included in the survey where `we
will all agree to contact each other for general position.' That
comment and action goes against the Safe Harbor Guidelines.'' Thus, it
appears that during the 2011 meeting, the Defendants present directly
shared information that violated the antitrust laws.
d. 2015: At the 2015 WMS Survey Group meeting, the participants
discussed ``whether to distribute disaggregated, raw, plant-level data
concerning hourly-paid workers''
[[Page 34040]]
through the WMS survey and that ``all members of the [WMS Survey Group]
in attendance at the Meeting agreed to the continued distribution of
such data.'' Notes taken at the 2015 WMS Survey Group roundtable
meeting by Processor Co-Conspirator 18 record what each participant
shared with the group in columns next to each processor's name. These
notes suggest the processors openly and directly shared with each other
a wide range of detailed, non-anonymous, and current- or future
compensation information, with a special focus on their rates of
overtime pay (i.e., pay for the 6th and 7th days of the week): \6\
---------------------------------------------------------------------------
\6\ As described above, all spelling and grammatical errors in
documents quoted in this Amended Complaint are sic.
---------------------------------------------------------------------------
i. Processor Co-Conspirator 3's column notes, ``6th and 7th day pay
$150 flat rate''; ``Compress scales over 1 yr rate to start rate.
Startign in Feb 2015'';
ii. Processor Co-Conspirator 6's column notes, ``Added seniority
pay instead of doing an hourly increase. . . . Rolls w/vacation, up to
6% increase. It is a seniority premium'';
iii. Defendant George's column notes, ``Staffing plants is a big
issue down 290 positions at springdale locations. $500 signing bonus
$300 first 30 days $200 30 days'';
iv. Processor Co-Conspirator 14's column notes, ``NO 6th and 7th
incentive'';
v. Processor Co-Conspirator 15's column notes, ``HOurly bonus
program 17K employees'';
vi. Processor Co-Conspirator 17's column notes, ``6th and 7th day
pay for weekly paid freguency $150 or comp day'';
vii. Defendant Wayne's column notes, ``$200 6th/$300 7th; some
facilities if you work in 6 hours you get the full day based base
pay'';
viii. Processor Co-Conspirator 2's column notes, ``$1.00
Attendnance bonus up from $0.25 . . . . Shoulder can earn up to $150
week . . . Benefits--Taking a harder look at their package''
ix. Processor Co-Conspirator 9's column--in its sole year of
participation in the WMS Survey Group--notes, ``6th/7th day up to 6
hours, get \1/2\ for 4 hours half day'';
x. The column for Processor Co-Conspirator 18b (now owned by
Processor Co-Conspirator 18) notes, ``200 6th 275 7th day.''
xi. Processor Co-Conspirator 10's column notes, ``$1.00 Attendance
bonus up from $0.25/Negotiated contract $55. 30. .30 3 Yr./. . . .
Supervisor offering 5000-8000'';
xii. The column for Former Processor Co-Conspirator 3, now owned by
Processor Co-Conspirator 16, notes, ``Line Team Members want more
money; based on survey we are in the middle'' and ``No Weekend Pay. But
will be looking''; and
xiii. Processor Co-Conspirator 13's column notes, ``Currently does
not have Weekend Pay for Supervisors.''
e. 2017: The 2017 WMS Survey Group meeting marked a turning point
for the WMS Survey Group. That year, after the filing of a private
antitrust class-action suit in the Northern District of Illinois
alleging price-fixing by many participants in the downstream sale of
chicken products, the processors and Meng became more concerned about
antitrust risk. At least one executive from Processor Co-Conspirator
7--a Steering Committee member--traveled all the way to the 2017
meeting only to learn that his employer's legal counsel had directed
him not to attend the sessions. At the 2017 meeting, the Defendants and
Processor Conspirators in attendance ``all agreed,'' in the words of
WMS's Jonathan Meng, ``that moving forward all questions about future
increases would be removed from the survey.''
2. Direct Processor-to-Processor Collaboration and Information
Exchanges
116. In addition to collaborating on setting compensation for plant
workers through the WMS Survey Group, including through in-person
meetings that involved direct exchanges of identifiable compensation
information, the Processor Conspirators collaborated on and directly
exchanged current and future, disaggregated, and identifiable
information about plant workers' wages and benefits. These interactions
occurred ad hoc and involved information about both local and
nationwide compensation decisions.
117. That the conspirators repeatedly contacted each other to seek
non-public competitive information shows the mutual understanding among
these Processor Conspirators that they would collaborate with and
assist each other on compensation decisions.
118. The relationships poultry processors established with their
labor market competitors through groups like the WMS Survey Group
created the opportunity to engage in ad hoc direct exchanges of
compensation information. By exchanging large amounts of current and
future, disaggregated, and identifiable data, the processors
collaborated to accumulate a set of industry compensation information
they could use to set their workers' wages and benefits at a nationwide
level (for example, to set budgets on plant worker spending across the
country) or locally (for example, to determine pay for shoulder cutters
in a specific plant).
a. Chicken Industry Wage Index (``CHIWI'') Exchange
119. The collaboration and direct exchanges among processors
included a survey that was designed and run by Processor Co-Conspirator
18, the Chicken Industry Wage Index or ``CHIWI.'' Through this survey,
Defendants George's and Wayne, along with Co-Conspirators 6, 7, 14, 15,
17 and others, exchanged current and future, disaggregated, and
identifiable compensation data from 2010 to 2013. The survey results
were so disaggregated that they showed wages for each participant's
specific processing plants. Processor Co-Conspirator 18 disclosed wages
by region of the country, as defined by Consultant Co-Conspirator 1,
making it easy for the processors to compare the CHIWI results with the
current, disaggregated, and identifiable Consultant Co-Conspirator 1
compensation information discussed below.
120. A Processor Co-Conspirator 18 employee described CHIWI to
others inside the company in 2013, noting that it was a ``survey with
competing poultry companies. With this information, we feel that we are
in a better position to strategically evaluate wages on a location by
location level.''
121. In 2013, Processor Co-Conspirator 18 transferred the running
of CHIWI, which it continued funding, to Defendant WMS. In a February
2013 letter from WMS to Processor Co-Conspirator 18 describing its
planned administration of CHIWI, Meng noted ``WMS will develop the
survey document for your approval based upon the templates provided
earlier by [Processor Co-Conspirator 18].''
122. WMS administered the ``Hourly Survey'' (the renamed CHIWI) to
the WMS Survey Group participants from 2013 to 2015, with all
participants in the WMS Survey Group for those years submitting and
receiving CHIWI-format compensation data. In 2016, WMS distributed a
substantially similar survey of plant-level data for hourly workers
along with its 2016 annual survey to Defendants Cargill, George's, and
Wayne and Processor Co-Conspirators 1, 2, 3, 4, 5, 6, 7, 10, 13, 14,
15, 17, and 18.
123. During Defendant WMS's administration of the Hourly Survey,
WMS assisted Processor Co-Conspirator 18 in identifying some of the
Processor
[[Page 34041]]
Conspirators' exchanged compensation information presented in WMS
surveys. In October 2014, a Processor Co-Conspirator 18 employee
emailed WMS's Jonathan Meng, asking ``We need to know the number of
[Processor Co-Conspirator 15] locations that participated in our last
Hrly Prod Maint survey. Can you provide this as soon as you get a
chance?'' Another WMS employee responded to this email that same day,
writing ``29 locations were reported by [Processor Co-Conspirator
15].'' Telling Processor Co-Conspirator 18 the number of locations of
another processor's plants reported in a survey would assist Processor
Co-Conspirator 18 in identifying the disaggregated survey results,
which were broken out by plant. If Processor Co-Conspirator 18 knew how
many plants a given processor had reported, Processor Co-Conspirator 18
could match the number of plants reported for a specific (anonymized)
competing processor to crack the code and identify the processor.
124. Processor Co-Conspirator 18 and Defendants WMS and Meng were
cognizant of, and worried about, the antitrust risk posed by CHIWI.
After WMS took over the administration of CHIWI, a Processor Co-
Conspirator 18 employee requested that Meng remove the note ``Sponsored
by: [Processor Co-Conspirator 18]'' in the circulated report and
replace it with the title ``WMS Poultry Hourly Wage Survey.'' Meng did
not comply with this request, stating that ``I did not want the Poultry
Industry Survey Group to conclude that WMS approved of the format of
the [Processor Co-Conspirator 18] sponsored survey.'' On another
occasion, Meng explained to Processor Co-Conspirator 18 executives that
CHIWI included clear risk factors for a potentially anticompetitive
exchange of information, noting that participating poultry processing
firms were likely to be able to identify which processor operated which
plant based on the details about the plants disclosed in the survey.
Despite his warning, the Processor Co-Conspirator 18 executives
requested that WMS proceed, and WMS willingly complied.
b. U.S. Poultry & Egg Association Member Processors' Exchanges
125. Some Processor Conspirators used their involvement with the
U.S. Poultry & Egg Association, a nonprofit trade association for the
poultry industry, to collaborate with other poultry processors on
compensation decisions.
126. In November 2016, Processor Co-Conspirator 12's Director of
Human Resources emailed, among others, Defendants George's, Sanderson,
and Wayne and co-conspirators including Processor Co-Conspirators 1, 3,
5, 6, 10, 11, 14, and 18, noting ``I understand Paul is out of the
country''--likely a reference to the Director of the Association's HR
and Safety Program-- ``so I hope you do not mind me reaching out to you
directly. With the news on the new OT rule injunction, I am curious on
how you plan to proceed? Wait and see or stay the course for any 12/1/
16 plans you have already made?'' This question was a reference to a
court order staying a federal rule mandating a change to overtime pay.
Defendant Sanderson's Human Resource Manager replied, copying all
recipients, ``We are in the process of implementing the new wages and I
don't see that we will stop or change it,'' thus sharing Sanderson's
future wage plans with its competitors directly.
127. In June 2017, the Director of the Association's HR and Safety
Program emailed to Defendants Cargill, George's, Sanderson, and Wayne;
Processor Co-Conspirators 3, 6, 7, 9, 10, 12, 14, 15, 17, and 18;
Consultant Co-Conspirator 1; as well as others, the results of a survey
``on pay ranges of Live Hang employees versus General Production
employees,'' noting that ``sixteen sites'' participated. The survey
questions sought the ``average per hour rate that you pay,'' meaning
the current pay rate, of both Live Hang employees and General
Production employees.
128. The U.S. Poultry & Egg Association also conducted in-person
meetings between the processor competitors, similar to the WMS Survey
Group. In fact, enough participants attended both in-person meetings
that in September 2012, Processor Co-Conspirator 18 and Processor Co-
Conspirator 7 discussed scheduling the WMS Survey Group meeting at the
same location and around the same dates as the U.S. Poultry & Egg
Association in-person meeting due to ``the people that attend both.''
In December 2016, Defendant Sanderson attended the U.S. Poultry & Egg
Association meeting, four years after Sanderson's departure from the
WMS Survey Group.
c. Processor Conspirators' Ad Hoc Direct Exchanges
129. The Processor Defendants also collaborated to exchange and
discuss confidential compensation information directly in an ad hoc
fashion. These direct exchanges were often between two or three
competitors. Some processor-to-processor communications were between
senior employees in processors' corporate offices and concerned
nationwide compensation. Others were between processor employees at the
local plant level, such as exchanges between competing plant managers
that were then reported to processor executives at the national level.
130. In January 2009, an employee of Processor Co-Conspirator 14
emailed Defendants Cargill, George's, Sanderson, and Wayne and
Processor Co-Conspirators 6, 7, 15, and 18, asking, ``I am curious to
find out if anyone has (or is in discussions) about postponing plant or
merit increases.'' In addition, in the same email, she noted, ``I know
there has been some previous dialogue about plant and merit
increases.''
131. In September 2013, an employee of Defendant Cargill sent
Processor Co-Conspirator 18 her company's internal medical leave
policy, which included a detailed description of benefits.
132. In January 2015, an employee of Defendant George's emailed his
supervisors to tell them he had spoken with the HR Manager of a
particular Processor Co-Conspirator 18 plant, who told him that ``[t]he
$13.90 starting pay is for Breast Debone at their Green Forrest
facility. The $13.90 is available once they qualify and then they are
eligible for incentive pay on top of that. So in fact an experienced
Shoulder Cutter could go there and get a $13.90 starting pay rate. He
said that the normal starting rate was $10.50 per hour with $0.40 extra
of 2nd shift and $0.45 extra for 3rd shift.'' This George's employee
then mentioned he would contact HR managers at another Processor Co-
Conspirator 18 plant, as well as a plant owned by Processor Co-
Conspirator 17.
3. Exchange of Compensation Information Through Consultant Co-
Conspirator 1
133. From at least 2010 to the present, the Processor Defendants
also used another data consultant, Consultant Co-Conspirator 1, to
collaborate with each other on compensation decisions through the
exchange of current, disaggregated, and identifiable information about
their poultry processing plant workers' wages and benefits,
artificially and anticompetitively suppressing this compensation.
134. Consultant Co-Conspirator 1 gathers data from companies and
distributes it to paying customers. Consultant Co-Conspirator 1 does
not sell this data to the public; its reports are only available to its
subscribers.
135. Publicly available information dating from both 2011 and 2020
shows Consultant Co-Conspirator 1 gathered data from over 95 percent of
U.S.
[[Page 34042]]
poultry processors, including all of the Processor Conspirators.
Consultant Co-Conspirator 1 also admitted in Jien (19-cv-2521) that its
subscribers have included all of the Processor Conspirators. Thus, it
is likely that all Processor Defendants exchanged compensation
information through Consultant Co-Conspirator 1 from at least 2010 to
present.
136. The data Consultant Co-Conspirator 1 gathers and sells is
current, disaggregated, and identifiable. Consultant Co-Conspirator 1
claims that it can minimize those risks to make this data ``safer'' to
distribute by anonymizing the companies and processing plants for which
it reports specific wages and salaries per job role. Although the
plants reported in Consultant Co-Conspirator 1's data reports are not
identified by name, they are grouped by region, and the list of all
participants in the region is provided. Accordingly, the number of
employees and other data provided per plant makes this data
identifiable to other processors.
137. Processors are thus likely able to use Consultant Co-
Conspirator 1's data reports to identify the wage and salary rates, as
well as benefits, that each of their competitors is currently setting
for each of its plants.
138. In addition to permitting competing poultry processors to
collaborate on their wages and benefits at the individual plant level,
Consultant Co-Conspirator 1's data reports also provide a means for
processors to monitor whether their collaborators are following through
on the compensation decisions they reported through the WMS Survey
Group and the ad hoc compensation exchanges.
4. Processors' Collaboration and Assistance on Compensation
139. In a patchwork of different combinations, through different
methods, and with respect to different types of compensation
information, the Processor Defendants built a pervasive conspiracy
across the poultry processing industry to collaborate on, and not
merely exchange, poultry processing plant worker wages and benefits
information.
140. As described above, many of the Processor Conspirators,
including Defendants Cargill, Sanderson, and Wayne, as well as
Processor Co-Conspirators 6, 7, 14, 15, 17, and 18, began exchanging
compensation information directly, without involvement from WMS, as
long ago as the 1980s. One employee of Processor Co-Conspirator 6 told
WMS's Jonathan Meng that ``executives from each of those poultry
processors would meet in a private room and bring enough copies of
their salary and wage data to distribute to all the other attendees,''
and ``the attendees would then exchange and discuss their compensation
schedules.'' According to one participant, these pre-2000 exchanges
included an understanding between participants that they would not use
the information they exchanged about each other's salaried compensation
to attempt to hire away each other's salaried employees. This early
conspiracy to collaborate helped foster the mutual understanding in
which processors agreed to collaborate on, rather than compete over,
poultry processing plant worker compensation.
141. In December 2008, for example, an executive at Processor Co-
Conspirator 4 emailed Defendants Cargill, George's, Sanderson, and
Wayne and Processor Co-Conspirators 6, 7, 8, and 14, seeking details of
each competitor's dental plan benefits, which her company was
``currently reviewing.'' The Processor Co-Conspirator 4 executive made
clear that her company would use the information provided by its
competitors to shape its own compensation decisions, explaining that
``[y]our responses to the questions below would greatly help us ensure
we stay competitive within the industry.'' The questions she included
related to eligibility for coverage, services included in the plan,
``annual deductible,'' and ``annual max per person.''
142. In September 2009, an executive at Defendant Wayne emailed
Defendants Cargill, George's, and Sanderson and Processor Co-
Conspirators 6, 7, 14, 15, and 18 informing them that ``[i]t's that
time of year already'' because Wayne was ``working on 2010 budget
increase recommendations.'' The executive then asked Wayne's
competitors to send future, disaggregated, directly-exchanged (and thus
identifiable) compensation information: ``What is your companies
projected salary budget increase recommendation for 2010?'' Later in
this email chain to the same group, the Wayne executive noted that her
colleague's ``sanity is depending on your response. Seriously--any info
you can give us will be helpful, we appreciate your help.'' Defendant
George's and Processor Co-Conspirator 14 both responded to this email
chain with their competitors and directly disclosed a projected
(future) recommendation to increase their budgets for salaries by three
percent.
143. In July 2015, an executive for Processor Co-Conspirator 14
emailed her peers at Defendant Sanderson and Processor Co-Conspirator
18, explaining that Processor Co-Conspirator 14 was ``in the midst of
completely revamping our Plant Management Trainee program.'' Her email
continued, ``and I was wondering if you would be willing to share with
me . . . what your starting rate is for these kids hired right out of
college?'' The Processor Co-Conspirator 14 employee sought current,
disaggregated, and identifiable wage information from her competitors
for the explicit purpose of assisting Processor Co-Conspirator 14 to
make its own wage decisions for this cohort. Her peer at Sanderson
responded the very next day to both Processor Co-Conspirator 14 and
Processor Co-Conspirator 18, disclosing, among other information, that
Sanderson's Beginning Trainee Program paid ``from 36,000 to 38,000, no
signing bonuses'' and that Sanderson's Advance Trainee program paid
``from $48,000 to $87,000, no signing bonuses.''
144. In February 2016, the Director of Compensation at Processor
Co-Conspirator 4 emailed Defendants Cargill, George's, and Wayne, as
well as Processor Co-Conspirators 3, 6, 7, 14, 15, 17, and 18. She
thanked a Wayne employee and noted, ``that reminded me that I had a
question for the group also. We are trying to determine what is
reasonable for salaried employee to be compensated for working 6 and/or
7 days in a work week when the plant is running.'' The questions she
asked included ``Do you pay extra for these extra days worked for
salaried (exempt) employees?'' and ``If so, how is that calculated?''
The statement that Processor Co-Conspirator 4 was in the midst of
``trying to determine'' overtime pay decisions, and wanted to know what
its competitors did in the same circumstances, likely made clear to the
recipients that Processor Co-Conspirator 4 planned to use the
information it gathered in its own decision-making. An employee from
Processor Co-Conspirator 10 responded to all recipients, noting, ``We
pay \1/5\ of the weekly salary for the sixth and seventh days if
working due to production. This includes supervisors and managers below
the plant manager level and all are paid the same. If the day off is
compensated by a paid benefit, other than sick time, we pay the sixth
and seventh days. Sanitation and maintenance only get paid for the
seventh day worked.''
145. In September 2016, an executive from Processor Co-Conspirator
7 sought future compensation information from Defendants Cargill,
George's, and Wayne and Processor Co-Conspirators 3, 6, 14, 15, 17, and
18 related to a new Fair Labor Standards Act salary threshold for
[[Page 34043]]
exempt status, a federal requirement determining to which workers the
processors would have to pay overtime wages based on salary. The
Processor Co-Conspirator 7 executive asked his competitors to fill out
a directly-exchanged survey form to indicate how they would change
compensation plans for all employees and, more specifically, for first-
line supervisor roles. Within a week, Defendants Cargill and George's
and Processor Co-Conspirators 6, 15, and 17 responded by sharing their
future compensation plans, which the Processor Co-Conspirator 7
executive passed on (labeled by processor) to the entire group,
reflecting, ``If more respond, I'll republish, but the target grouping
pattern already appears pretty tight.''
146. The chart attached to the executive's email showed that eight
of the ten processors selected ``most employees are receiving base
salary increases to bring them to the threshold salary,'' thus ending
the processors' obligation to provide these workers with overtime pay,
and ``a smaller number will not receive a base increase but will
receive overtime.'' Similarly, eight of the ten respondents selected,
as to the first-line supervisors, ``are either above the salary
threshold or will receive a base salary increase to the threshold.''
147. The Processor Defendants' collaboration also involved forms of
compensation other than wages. In January 2010, an executive for
Processor Co-Conspirator 18 wrote to Defendants Cargill, George's,
Sanderson, Wayne, and WMS and Processor Co-Conspirators 6, 7, 15, and
17 for help because Processor Co-Conspirator 18 was ``considering a
change to convert'' some of its plant worker jobs to a category that
would provide them with fewer benefits: ``Production workers on the
line do not get quite the same as our technical support jobs, nurses
and clerical. The difference is 5 days daily sick pay, better vacation
schedule, higher short-term disability pay and the ability to use our
flexible (pre-tax) benefits saving plan.'' Processor Co-Conspirator 18
noted that a ``prompt response would be much appreciated'' from its
competitors about whether ``any of you have a difference in benefits
between'' these two job categories, to assist it in making this
decision. Processor Co-Conspirator 7 responded to Processor Co-
Conspirator 18's question, stating it did not.
148. A 2015 email exchange between Defendant George's and Processor
Co-Conspirator 18 provides detail on how the competitors may have
viewed their relationships with each other as collaborators. On October
6, 2015, Processor Co-Conspirator 18 received an email from a George's
executive asking, ``Would you mind sending me your current Health
Insurance Rates? Also do you plan on raising them in 2016? Thanks you
so much for your help.'' Processor Co-Conspirator 18 then discussed
this request internally, noting, ``We don't count on them [George's]
for much so we don't owe them anything from our side.'' This view of
the request for future and directly exchanged compensation information
as part of a quid pro quo calculation--that to get the helpful
information, you have to give the helpful information--helps explain
why the competing processors were so willing to share compensation
information when their competitors asked for it.
149. In designing the WMS survey, the WMS Survey Group participants
collaborated to ensure the exchanged data included the type of
disaggregated compensation information that antitrust agencies warned
against as a risk factor for identifying information exchanges not
designed in accordance with the antitrust laws. For example, in 2012,
the Steering Committee, which then included Processor Co-Conspirators
6, 7, 14, 15, and 18, decided to distribute disaggregated and
identifiable data regarding hourly plant workers. WMS's Jonathan Meng
warned the Steering Committee that distributing this data would violate
the guidance and proposed ways of presenting the data that would make
it less identifiable. Processor Co-Conspirator 18, however, instructed
Meng to let the WMS survey group know of the change to the survey
design but not to ``call out'' Meng's concerns. Meng followed Processor
Co-Conspirator 18's instructions and simply advised the Survey Group of
the changes, stating that ``The Steering Committee has requested that
the hourly wage information included in the report be expanded to
include the raw data for each state. . . . The steering committee needs
to know if you are in agreement with the proposed changes.'' Meng noted
that under this plan, which he asked each WMS Group Participant to
agree to explicitly, he would include disaggregated, identifiable wage
data from Alabama, Arkansas, Georgia, Missouri, Mississippi, North
Carolina, Tennessee, and Virginia. Later, Meng stated that ``everyone
is in agreement with the change except [Processor Co-Conspirator 4] and
[Processor Co-Conspirator 13], who have not responded yet.''
150. The WMS Survey Group participants, competitors in the market
for poultry processing plant labor, also collaborated to standardize
the job categories for which they each reported compensation data,
ensuring they could match each other's compensation decisions. The
Processor Defendants also may have worked, with assistance from
Defendant WMS, to standardize job types and categories across their
different enterprises. This made a comparison between each
participant's jobs easier, and thus made the information swapped about
each job category's compensation more accessible for use. With respect
to salaried positions, the annual survey questionnaire was intended to
permit participants to match all jobs to defined job categories while
indicating when the matched job was, in the view of the participant,
``larger'' or ``smaller'' than the job as described in the
questionnaire. Survey results reported the percentages of respondents
indicating inexact job matches. In 2012, an employee for Processor Co-
Conspirator 14 employee described in an email to a Processor Co-
Conspirator 18 employee the prior year's WMS Survey Group in-person
meeting, at which ``the discussion around the room was that some
companies call this single incumbent job a Plant Safety Manager and
some a Complex Safety Manager.'' This standardization for purposes of
collaboration, enabled by WMS, made it easier for the Processor
Defendants to determine and monitor consensus among themselves for
compensation, enabling their conspiracy, which suppressed compensation.
5. Processors Recognize Their Agreement Likely Violated the Antitrust
Laws and Attempt To Cover It Up
151. The Defendants at times expressed concern that their agreement
was unlawful. Sometimes, fear of discovery or other outside events
prompted them to change their views of the risk they were each engaged
in. Nonetheless, they maintained secrecy throughout the conspiracy.
152. On February 14, 2012, Defendant Sanderson's HR Manager emailed
Defendants Cargill, George's, and Wayne and Processor Co-Conspirators
7, 15, and 17 along with Defendant WMS, notifying them that Sanderson
would be ending its relationship with the WMS Survey Group. The HR
Manager stated, ``On the advice of legal counsel, our Executives have
decided that we can no longer participate in this type of survey.'' If
the Defendants had not been previously aware of the legal risk involved
in the WMS Survey Group exchange, this email put them on notice.
153. Private class actions related to this conduct and other
allegedly anticompetitive behavior in the poultry
[[Page 34044]]
industry caused the members of the WMS Survey Group to change some of
their behavior. As noted above, at their 2017 in-person meeting, the
participating Processor Conspirators, in the words of WMS's Jonathan
Meng, ``all agreed that moving forward all questions about future
increases would be removed from the survey. . . . It was also
recommended by counsel for [Processor Co-Conspirator 7] to have an
Antitrust Attorney present for the general group discussions (post
survey results).''
154. As Processor Co-Conspirator 7 described in October 2017, the
Processor Conspirators would thereafter treat Meng as an ``Antitrust
Guidon.'' In military terminology, a guidon is a flag flown at the head
of a unit to signify that the commander is present. An executive at
Defendant George's put it more bluntly, commenting that ``One thing
that has changed is that the group will now have an attorney present
for the full meeting to make sure no collusion and that the Safe Harbor
provisions are all met and followed.'' Meng acknowledged in January
2018 to an executive for Processor Co-Conspirator 17 that ``I will be
present at all sessions this year (which did satisfy [Processor Co-
Conspirator 7's] counsel).''
155. But Meng's presence at meetings did not ultimately quell the
Processor Conspirators' fears that their conduct was unlawful. From
2017 to 2020, spooked processors began dropping out of the WMS Survey
Group due to, as an employee of Processor Co-Conspirator 14 put it,
``the `big scare' ''--i.e., a private class action alleging a broiler
chickens price-fixing conspiracy.
156. In response to the elimination of disaggregated data from the
survey, an executive for Processor Co-Conspirator 7 complained, ``how
useful is the `average rate report' now anyway? It has suffered
significant obscuring of results due to aggregating, and I would ask--
Is it still useful information any longer?''
157. Processor Co-Conspirator 13 left in 2018; that year, Defendant
Wayne also considered leaving, but decided to remain in the group after
heavy lobbying by Meng. Defendant George's and Processor Co-
Conspirators 1 and 17 left in 2019.
158. In a 2019 email, an executive for Processor Co-Conspirator 7
noted that Defendant ``Georges was skittish very early on in the anti-
trust concerns, including their attorneys contacting other companies to
warn about attending our conference.''
159. In July 2019, an executive from Processor Co-Conspirator 7
sent an alert to Processor Co-Conspirator 14 and WMS describing a call
his colleague received ``from someone representing themselves as a
private investigator from New York. The caller had questions about the
types of information we shared at our meeting, the survey and other
questions that I will simply call `general anti-trust fishing'
questions. . . . So just a little reminder that the bad-guys are still
out there, and why we hold strict confidences about discussing wages--
and have Jon [Meng] at our entire meeting.'' Notably, the Processor Co-
Conspirator 7 executive did not say the competing processors should
take care not to discuss wages, but rather take care to keep such
discussions in ``strict confidence.''
160. And if there were any question whom the WMS participants
considered the ``bad-guys,'' Defendant WMS's presentation for the 2019
WMS Survey Group meeting features, at the top of the presentation's
first slide, a quote from Shakespeare: ``The first thing we do, let's
kill all the lawyers.''
161. The WMS Survey Group did not meet again after this 2019
meeting.
C. Defendants Sanderson's and Wayne's Deceptive Practices Toward
Growers
162. Growers sign contracts with Sanderson and Wayne, respectively,
to raise chickens. Growers often make substantial financial investments
including building or upgrading their facilities. The success of those
investments depends on the compensation system they receive.
163. Under the compensation system known as the tournament system,
each contract provides an average or base price that the grower
receives. But the average or base price is not necessarily what the
grower actually receives. The growers' compensation depends on how each
grower performs relative to other growers--in particular, on their
performance relative to other growers at converting the inputs to bird
weight. Growers who overperform the average are paid a bonus, while
those that underperform the average are penalized. Sanderson and Wayne,
however, control the major inputs the grower receives, including the
chicks and feed. As a result, growers cannot reasonably assess the
range of expected financial outcomes, effectively manage their risks,
and properly compare contracts from competing processors.
164. Sanderson and Wayne do not adequately disclose the risk
inherent in this system to the growers. Their contracts with growers
omit or inadequately describe material key terms and risks that
mislead, camouflage, conceal, or otherwise inhibit growers' ability to
assess the financial risks and expected return on investment. For
example, the grower contracts disclose neither the minimum number of
placements nor the minimum stocking density that the grower is
guaranteed. The contracts also lack material financial disclosures
regarding poultry grower performance, including the range of that
performance, and other terms relevant to the financial impact of the
grower's investment.
165. Similarly, the contracts omit material information relating to
the variability of inputs that can influence grower performance,
including breed, sex, breeder flock age, and health impairments, on an
ongoing basis, including at input delivery and at settlement (including
information to determine the fairness of the tournament). Without this
information, growers are impaired in their ability to manage any
differences in inputs, or evaluate whether to invest in new
infrastructure, that may arise from the Sanderson's and Wayne's
operation of the tournament system. This failure to disclose is
deceptive and violates the Section 202(a) of the Packers and Stockyards
Act, 1921, as amended and supplemented, 7 U.S.C. 192(a). These
deceptions should be enjoined.
VI. Elements of the Sherman Act Claim
A. The Agreement To Collaborate on Compensation Decisions, Exchange
Compensation Information, and Facilitate Such Collaboration and
Exchanges
166. As detailed above, the Processor Defendants collaborated on
what should have been independent decisions about poultry processing
plant worker compensation. As reflected by in-person meetings,
correspondence, and the regular exchange of compensation information,
the Processor Defendants and their co-conspirators had a mutual
understanding that they would contact each other for advice,
discussion, and competitively-sensitive compensation information to
help each other make decisions about worker compensation at the
nationwide and local level. This agreement undermined the competitive
process, distorted the ordinary, free-market bargaining and
compensation-setting mechanisms, and suppressed competition and
compensation for poultry processing plant workers.
167. The Processor Defendants' exchanges of current and future,
disaggregated, and identifiable information about poultry processing
plant worker wages and benefits, through the facilitation provided by
the Consultant Defendants and through direct exchanges with each other,
supported this conspiracy to
[[Page 34045]]
collaborate. However, even standing alone, these exchanges allowed each
participant to more closely align its wage and benefit offerings with
its competitors, harmed the competitive process, distorted the
competitive mechanism, and suppressed competition and compensation for
their poultry processing plant workers.
B. Primary Poultry Processing Plant Employment Is a Relevant Labor
Market
168. The market for primary poultry processing plant labor is a
relevant antitrust labor market. If a single employer controlled all
the primary poultry processing plant jobs in a geographic market, it
could profitably suppress compensation (either in wages or benefits) by
a small but significant and non-transitory amount. In other words, if a
poultry processing employer with buyer market power (monopsony power)
chose to reduce or forgo raising its workers' wages and benefits, or
otherwise worsen the compensation offered to workers, too few poultry
processing workers would switch to other jobs to make the employer's
choice unprofitable.
169. Labor markets are inextricably connected to the most personal
choices workers make: how and where to live, work, and raise a family.
In labor markets, employers compete to purchase labor from a pool of
potential and actual workers by setting wages, benefits, and working
conditions.
170. In choosing among potential employers, workers who may be
different from each other--for example, who fill different types of
jobs--may be similarly positioned with respect to potential employers.
While hourly and salaried poultry processing jobs may attract different
job applicants, poultry processing plants may constitute potential
employers for those workers because of commonalities shared among
hourly and salaried workers (and among workers filling different roles
within those categories).
171. To poultry processing plant workers, all of the Processor
Conspirators are close competitors for their labor. From the
perspective of workers, poultry processing jobs are distinguishable
from, and not reasonable substitutes for, jobs in other industries.
Many processing plant workers share common constraints that make
poultry processing plant jobs accessible to them while other year-
round, full-time jobs are not. Poultry processing plant workers also
share common attributes and learn job-specific skills, which the
poultry industry compensates more than other industries would. Thus,
these particular employers compete to offer jobs to this pool of labor
that these workers both have access to and that offer value for their
common attributes in a way that other industries might not. Many of
these workers are able to find work in the poultry industry but not in
other industries that seek workers with different skills, experience,
and attributes.
172. Although poultry processing plants employ varied types of
workers, they occupy a common labor market. All the workers were the
target of a single overarching information-sharing conspiracy. All the
workers have thus had their compensation information distributed
without their consent by their employer to other employers who might
hire them. All the workers have developed experience, familiarity, and
expertise in poultry processing plants, and all or nearly all the
workers have located their households near poultry processing plants,
acquired friends or colleagues in poultry plants, and have or have
developed the types of personal characteristics that enable them to
tolerate the harsh conditions of poultry processing plants. As a
result, workers who are unsatisfied with their current employer would
normally seek, or at least consider, alternative employment in the
poultry processing plants owned by their employer's co-conspirators.
173. Each of the Processor Conspirators sees poultry processing
workers as sufficiently alike to find it worthwhile to place them in a
common worksite, creating a cluster of jobs associated with particular
market activity (poultry processing), just as grocery stores sell
multiple products to customers who prefer the convenience of one-stop
shopping. The common characteristics of the employees as required by
the logistics of processing poultry explain why Defendants treat the
employees together in the conspiracy. For these reasons, it is
appropriate to consider all the poultry processing workers as a common
group of harmed parties for the purpose of this action, even though the
jobs in poultry processing plants differ.
174. Both chicken processing plants and turkey processing plants
compete to purchase labor in this market because the jobs they seek to
fill are similar. These industries use similar facilities, materials,
tools, methods, job categories, and vertically-integrated processes to
produce downstream products. These industries also exhibit similar
difficult working conditions.
175. In addition, the poultry industry itself recognizes that
poultry processing workers are a distinct market. The Processor
Defendants' and Processor Conspirators' agreement to collaborate on
compensation decisions included the exchange of information about both
hourly and salaried plant jobs. The WMS Survey Group set criteria for
membership that permitted both chicken and turkey processors to
participate, but not other meat processors or other employers. When one
member of the WMS Survey Group proposed including processors of red
meat, this idea was rejected by the group because, according to
Defendant Jonathan Meng, as he was informed by members of the WMS
Survey Group, ``the poultry processing labor market is distinct from
the red meat processing labor market.'' Informed by their knowledge and
experience, the Processor Conspirators chose to include poultry
processors in the WMS Survey Group and exclude other industries.
C. The Geographic Markets for Poultry Processing Plant Labor
176. The relevant geographic markets for poultry processing plant
labor include both local submarkets and a nationwide market.
177. Local markets for poultry processing plant labor are relevant
geographic markets. Many poultry processors adjust wages and benefits
at a local level and based on local factors, meaning that a particular
processor's compensation for job categories between different plants in
different locations may differ. The Processor Conspirators made
decisions affecting competition and competed on a local basis. Poultry
processing workers reside within commuting distance from their plants.
178. The Processor Conspirators' anticompetitive agreement to
collaborate on compensation decisions included the exchange of local
data through the Consultant Defendants and Consultant Co-Conspirator 1
and the direct exchange of such data with the other Defendants and co-
conspirators. For example, as Processor Co-Conspirator 18 noted in
describing the CHIWI survey, ``With this information, we feel that we
are in a better position to strategically evaluate wages on a location
by location level.''
179. Employed poultry processing plant workers reside within
commuting distance from the plant at which they work. In addition, many
applicants to these jobs reside within commuting distance from the
plant to which they have applied, at the time they have applied. Thus,
if multiple processing plants are located within a worker's commuting
boundary, those plants are potential competitors for that worker's
labor.
[[Page 34046]]
180. The relevant local submarkets can be identified according to
workers' willingness and ability to commute. The local submarkets here
are those in which, according to data from the United States Department
of Agriculture, at least two Processor Conspirators compete with each
other for primary poultry processing plant workers. In these relevant
local submarkets, it is likely that the Processor Conspirators together
hold market power, because they control over 80 percent, and in many
local submarkets, control 100 percent, of primary poultry processing
plant jobs. A hypothetical monopsonist of poultry processing plant
labor jobs in each local labor submarket would likely be able to
suppress compensation for poultry processing plant workers by a small,
but significant, amount.
181. The local labor submarkets in which the Processor Defendants
and Processor Conspirators have suppressed competition, which
suppressed poultry processing plant workers' compensation, include:
a. the ``Eastern Shore Poultry Region'': containing eleven primary
poultry processing facilities \7\ in Hurlock, MD; Salisbury, MD;
Princess Anne, MD; Harbeson, DE; Millsboro, DE; Selbyville, DE;
Georgetown, DE; Milford, DE; Norma, NJ; Accomac, VA; and
Temperanceville, VA, four of which are owned by Processor Co-
Conspirator 14, five of which are owned by other Processor
Conspirators, and two of which are owned by other poultry processors;
---------------------------------------------------------------------------
\7\ The number of primary poultry processing facilities in the
Amended Complaint is based on data from the United States Department
of Agriculture on chicken and turkey slaughtering from 2022 and
excludes facilities designated as ``Very Small.''
---------------------------------------------------------------------------
b. the ``Central Valley Poultry Region'': containing three primary
poultry processing facilities in Fresno, CA and Sanger, CA, two of
which are owned by Processor Co-Conspirator 7, and one of which is
owned by another Processor Conspirator;
c. the ``West-Central Missouri Poultry Region'': containing two
primary poultry processing facilities in California, MO and Sedalia,
MO, one of which is owned by Defendant Cargill, and one of which is
owned by another Processor Conspirator;
d. the ``Ozark Poultry Region'': containing nineteen primary
poultry processing facilities in Huntsville, AR; Ozark, AR; Springdale,
AR; Fort Smith, AR; Clarksville, AR; Dardanelle, AR; Green Forest, AR;
Waldron, AR; Danville, AR; Carthage, MO; Cassville, MO; Southwest City,
MO; Monett, MO; Noel, MO; Heavener, OK; and Jay, OK, two of which are
owned by Defendant George's, one of which is owned by Processor Co-
Conspirator 17, one of which is owned by Defendant Wayne, one of which
is owned by Defendant Cargill, thirteen of which are owned by other
Processor Conspirators, and one of which is owned by another poultry
processor;
e. the ``Ouachita Poultry Region'': containing five primary poultry
processing facilities in De Queen, AR; Grannis, AR; Hope, AR;
Nashville, AR; and Broken Bow, OK, one of which is owned by Processor
Co-Conspirator 15, and four of which are owned by another Processor
Conspirator;
f. the ``East Texas Poultry Region'': containing four primary
poultry processing facilities in Lufkin, TX; Nacogdoches, TX; Carthage,
TX; and Center, TX, two of which are owned by Processor Co-Conspirator
15, and two of which are owned by another Processor Conspirator;
g. the ``River Valley Poultry Region'': containing three primary
poultry processing facilities in Union City, TN; Humboldt, TN; and
Hickory, KY, one of which is owned by Processor Co-Conspirator 15, and
two of which are owned by another Processor Conspirator;
h. the ``Western Coal Fields Poultry Region'': containing two
primary poultry processing facilities in Cromwell, KY and Robards, KY,
one of which is owned by Processor Co-Conspirator 14, and one of which
is owned by another Processor Conspirator;
i. the ``North/South Carolina Poultry Region'': containing seven
primary poultry processing facilities in Lumber Bridge, NC; Rockingham,
NC; Marshville, NC; St. Pauls, NC; Monroe, NC; and Dillon, SC, two of
which are owned by Processor Co-Conspirator 14, two of which are owned
by Processor Co-Conspirator 15, one of which is owned by Defendant
Sanderson, two of which are owned by other Processor Conspirators, and
one of which is owned by another poultry processor;
j. the ``Northern Georgia Poultry Region'': containing eleven
primary poultry processing facilities in Cornelia, GA; Murrayville, GA;
Gainesville, GA; Athens, GA; Canton, GA; Ellijay, GA; Cumming, GA;
Bethlehem, GA; Marietta, GA; and Pendergrass, GA, two of which are
owned by Processor Co-Conspirator 7, four of which are owned by
Processor Co-Conspirator 15, one of which is owned by Defendant Wayne,
two of which are owned by other Processor Conspirators, and two of
which are owned by other poultry processors;
k. the ``Central Georgia Poultry Region'': containing two primary
poultry processing facilities in Perry, GA and Vienna, GA, one of which
is owned by Processor Co-Conspirator 14, and one of which is owned by
another Processor Conspirator;
l. the ``Chattanooga Poultry Region'': containing two primary
poultry processing facilities in Chattanooga, TN, one of which is owned
by Processor Co-Conspirator 15, and one of which is owned by another
Processor Conspirator;
m. the ``Central North Carolina Poultry Region'': containing two
primary poultry processing facilities in Sanford, NC; and Siler City,
NC, one of which is owned by Processor Co-Conspirator 15, and one of
which is owned by another Processor Conspirator;
n. the ``Southern Alabama/Georgia Poultry Region'': containing
seven primary poultry processing facilities in Enterprise, AL; Dothan
AL; Jack AL; Union Springs AL; Bakerhill, AL; Montgomery AL; and
Bluffton, GA, one of which is owned by Processor Co-Conspirator 15,
three of which are owned by Defendant Wayne, two of which are owned by
other Processor Conspirators, and one of which is owned by another
poultry processor;
o. the ``Northern Alabama Poultry Region'': containing eleven
primary poultry processing facilities in Guntersville, AL;
Russellville, AL; Albertville, AL; Decatur, AL; Blountsville, AL;
Collinsville, AL; Gadsden, AL; Jasper, AL; Cullman, AL; and Tuscaloosa
AL, two of which are owned by Processor Co-Conspirator 15, two of which
are owned by Defendant Wayne, five of which are owned by other
Processor Conspirators, and two of are owned by other poultry
processors;
p. the ``Western North Carolina Poultry Region'': containing four
primary poultry processing facilities in Dobson, NC; Wilkesboro, NC;
Morganton, NC; and Winston-Salem, NC, one of which is owned by
Defendant Wayne, two of which are owned by other Processor
Conspirators, and one of which is owned by another poultry processor;
q. the ``Virginia/West Virginia Poultry Region'': containing eight
primary poultry processing facilities in Timberville, VA; Moorefield,
WV; Dayton, VA; Edinburg, VA; Harrisonburg, VA; New Market, VA; and
Hinton, VA, one of which is owned by Defendant Cargill, two of which
are owned by Defendant George's, two of which are owned by Processor
Co-
[[Page 34047]]
Conspirator 15, two of which are owned by other Processor Conspirators,
and one of which is owned by other poultry processors;
r. the ``Laurel Poultry Region'': containing six primary poultry
processing facilities in Collins, MS; Laurel, MS; Hattiesburg, MS; Bay
Springs, MS: and Moselle MS, two of which are owned by Defendant
Sanderson, one of which was owned by Defendant Wayne until 2021 and is
now owned by another Processor Conspirator, one of which is owned by
another Processor Conspirator, and at least two of which are owned by
other poultry processors; and
s. the ``Southern Georgia Poultry Region'': containing three
primary poultry processing facilities in Moultrie, GA; Camilla, GA; and
Bluffton, GA, one of is was owned by Defendant Sanderson, one of which
is owned by another Processor Conspirator, and one of which is owned by
another poultry processor.
182. The United States is also a relevant geographic market for
primary poultry processing plant labor. Poultry processing plant jobs
outside the United States are not reasonable substitutes for workers
seeking employment in the United States.
183. Many poultry processors make significant compensation
decisions at a nationwide level. The executives in charge of such
decisions often set nationwide policies or budgets for processors'
wages and benefits. These nationwide decisions then influence local
decisions, such as setting different wage base rates between particular
local plants. At least one Processor Conspirator, Defendant Sanderson,
sets its processing plant workers' wages at a nationwide level, meaning
workers in the same position at different plants in different local
areas receive the same base compensation.
184. Poultry processors also sometimes recruit workers from beyond
the local regions where particular plants are located. For example,
they may make use of their current workers' personal connections to
recruit their friends or family members internationally, such as by
giving referral bonuses to current workers. And some workers move
between states or internationally to take processing plant jobs.
185. The Processor Defendants also viewed themselves as part of a
nationwide market for poultry processing plant work. They gave
significant time, expertise, and money over at least two decades to
participate in the nationwide WMS Survey Group, including traveling to
Florida (or another resort destination) to meet in person and swap
compensation information about both hourly and salaried workers with
poultry processors from across the country. The Steering Committee of
the WMS Survey Group restricted the Group's membership to poultry
processors with at least three plant locations nationwide.
186. Informed by their knowledge of and experience with their labor
pool of potential and actual poultry processing plant workers, the
Processor Conspirators chose to compose the WMS Survey Group to include
poultry processors nationwide. The Processor Conspirators are not
likely to have wasted their time and money on useless information
exchanges. Thus, the Processor Conspirators, with the help of
Defendants WMS and Meng and Consultant Co-Conspirator 1, formed their
agreement to collaborate on compensation decisions, including through
the anticompetitive exchange of compensation information, at a
nationwide level.
187. The Processor Conspirators together control more than 90
percent of poultry processing plant jobs nationwide. A hypothetical
monopsonist of poultry labor jobs nationwide would likely be able to
suppress compensation for poultry workers by a small, but significant,
amount.
D. Market Power
188. Together, the Processor Conspirators control over 90 percent
of poultry processing plant jobs nationwide; the four largest of the
Processor Conspirators control about half of that share. The Processor
Conspirators also control at least 80 percent of poultry processing
jobs in relevant local submarkets.
189. Further, many poultry processing plants are located in rural
areas near poultry grower operations. The processors likely have even
greater buyer market power in these markets, in which there are often
fewer full-time, year-round jobs available than in more heavily
populated areas.
190. Finally, the nature of labor markets generally means employers
have market power at far lower levels of market share than the
Processor Conspirators have here. Labor markets are matching markets--
employees cannot simply switch jobs like a customer switches from one
beverage to another. Finding a new job takes time, effort, and often,
money. The new employer has to offer the job to the worker, while the
employee must overcome the inertia provided by an existing job, even if
it is an unfavorable one, to seek out and find, interview for, and
accept the new job. Employees often have less freedom to move to take a
new job due to family commitments such as their spouse's employment,
their children's education, or the need to provide care to family
members. Thus, workers are more likely to stay in the jobs they already
have than consumers are to continue to buy the same product; labor
markets come with a level of ``stickiness'' that many product markets
do not.
E. Anticompetitive Effects: Processor Conspirators' Conspiracy
Anticompetitively Affected Decisions About Compensation for Plant
Processing Workers
191. The Processor Conspirators' pervasive and decades-long
conspiracy and anticompetitive exchange of current and future,
disaggregated, and identifiable information, facilitated and furthered
by the Consultant Defendants, suppressed compensation for poultry
processing plant workers nationwide. This anticompetitive agreement
distorted the competitive mechanism for wage-setting and robbed poultry
processing plant workers of the benefits of full and fair competition
for their labor.
192. In labor markets, reductions to absolute compensation are
unusual. Thus, the anticompetitive effects of agreements in such
markets are most likely to be reflected in compensation remaining flat
or increasing at a lower rate than would have occurred without the
anticompetitive conduct.
193. The Processor Defendants' anticompetitive information sharing
about poultry processing plant worker compensation supported their
larger conspiracy to collaborate with competitors on their own
compensation decisions. Both their broader conspiracy to collaborate
and their information sharing suppressed competition among them and led
to compensation that was lower than it would have been without either
the larger conspiracy or the information sharing alone.
194. As the Processor Defendants themselves admitted to each other
in emails, they used the current and future, disaggregated, and
identifiable compensation data they exchanged directly and through
consultants when making compensation decisions company-wide and for
specific positions and plant locations. Because the shared information
allowed the Processor Defendants to understand how their competitors
currently compensated plant workers, or were planning to in the future,
the
[[Page 34048]]
information they exchanged allowed the Processor Defendants to offer
lower compensation than they would have had to absent their agreement.
The Processor Defendants' collaboration distorted the typical
competitive process in which they would have had to fully and fairly
compete by making their own independent choices about what wages and
benefits to offer workers.
195. Further, because of the length of time the Processor
Defendants were able to engage in their conspiracy and their financial
interest in keeping their labor costs below competitive levels, they
are likely to continue collaborating and exchanging compensation
information unless they are enjoined from doing so.
196. Conduct by multiple Defendants in 2009 illustrates the types
of effects likely to have occurred as a result of the Defendants'
conduct.
197. In January 2009, an executive at Processor Co-Conspirator 14
emailed Defendants Cargill, George's, Sanderson, and Wayne and
Processor Co-Conspirators 6, 7, 15, and 18 seeking her competitors'
help on the question of ``plant and merit increases'' for the next
year. She described to her competitors that ``Our fiscal year begins
03/30/09, and, we have recently started talking about delaying.'' She
asked these competitors, ``I am curious to find out if anyone has (or
is in discussions) about postponing plant or merit increases.'' In
addition, in the same email, she noted, ``I know there has been some
previous dialogue about plant and merit increases.'' This
correspondence both makes clear that Processor Co-Conspirator 14 was
seeking its competitors' assistance in making its own wage decisions
and suggests that the competitors had held similar discussions before.
The Processor Co-Conspirator 14 executive sent her email directly in
response to a question from an executive for Processor Co-Conspirator 6
about making travel and scheduling arrangements to meet in person for
the annual WMS Survey Group meeting.
198. In July 2009, a strikingly similar discussion took place
between Defendant George's and Processor Co-Conspirators 17 and 18.
George's Vice President of Human Resources emailed at least two of
George's competitors, Processor Co-Conspirator 17 and Processor Co-
Conspirator 18, disclosing to Processor Co-Conspirator 17 that ``we are
working on budgets for our next fiscal year. . . . We are looking at a
raise in September/Oct. and have not decided on the amount yet . . .
we're surveying the other poultry companies to get a feel for what they
are going to do.'' As a result, he asked Processor Co-Conspirator 17,
``Do you know what [Processor Co-Conspirator 17] is planning on giving
in the way of % or $ amount for your processing plants? What month will
the raise go into effect?'' He concluded, ``I will be happy to let you
know our decision within the next week.'' Processor Co-Conspirator 17's
VP of People Services responded to the George's executive that ``We
have no plans at this time to give increases.''
199. The George's executive made a similar disclosure to Processor
Co-Conspirator 18--``We are budgeting for our next fiscal year''--as
well as a similar request--``and was wondering what [Processor Co-
Conspirator 18] is going to do as far as Plant Wages in November? Do
you know the % amount or $ amount that [Processor Co-Conspirator 18]
will be giving in Springdale and Monett, MO?'' The George's executive
also, as he did with Processor Co-Conspirator 17, promised an exchange:
``I will be able to give you ours within the next week or so as well.''
The Processor Co-Conspirator 18 executive responded, ``Sorry, we don't
know yet what we are going to do,'' to which the George's executive
replied ``will you please share with me once you know?''
200. A later document from July 2010 states that the effective date
of Processor Co-Conspirator 18's last plant-wide wage raise was in
November 2008, suggesting that Processor Co-Conspirator 18, like
Processor Co-Conspirator 17, did not raise its wages in 2009.
201. While in the years before and after 2009, George's typically
raised its hourly plant worker wages, in 2009 itself, after hearing
directly from its competitor Processor Co-Conspirator 17, and
potentially also from its competitor Processor Co-Conspirator 18,
George's chose not to raise its hourly worker wages. Thus, because
George's collaborated with its competitors through the direct sharing
of future compensation information, and received comfort from those
competitors that they did not plan to raise their employees' wages,
George's processing plant employees suffered a harmful effect.
202. Evidence of harmful effects from an information-sharing
conspiracy is not restricted to denials of wage raises or choices not
to grant benefits. If each participant in a labor market is suppressing
its compensation levels by using information about its competitors'
compensation plans to make smaller and more targeted wage increases
than it would have absent such information sharing, wages will rise
more slowly, and for fewer workers, than they would have without the
conspiracy.
203. For example, in 2013, Processor Co-Conspirator 18's Director
of Labor Compensation informed her coworkers that in preparation for
internal decision-making about plant wages, Processor Co-Conspirator 18
``completed a third-party survey with competing poultry companies. With
this information, we feel that we are in a better position to
strategically evaluate wages on a location by location level.''
Attached to this email are charts using data exchanged about competing
processors' base wage rates through the WMS Survey Group, as well as
other documents to which ``We [Processor Co-Conspirator 18] have added
the [Consultant Co-Conspirator 1] wages and ranking'' and ``maintenance
start and base rates by [Consultant Co-Conspirator 1] region.'' At
least three of these charts marked specific plants for which Processor
Co-Conspirator 18, as compared to the averages of other processors'
plants in that region, was paying below median wages for the industry.
204. The information exchange informed Processor Co-Conspirator 18
exactly where and by how much it would have to increase wages to match
its competitors; the exchange deprived plant workers, who lack any
comparable information, of an independent effort by Processor Co-
Conspirator 18 to recruit and hire workers by competing against other
processors.
205. Defendant Wayne has admitted that it used its collaboration
with the Processor Conspirators, and the information they exchanged
with each other, in this way. Wayne's compensation strategy was to pay
wages at or near the midpoint of compensation (i.e., 50%) for its
workers as compared to its competitors. Wayne's discussions and
exchange of compensation information with the Processor Conspirators
allowed it to more precisely target what the mid-point of compensation
would be, suppressing the rise in compensation that might otherwise
have occurred if Wayne had less ability to target that mid-point.
206. Similarly, Defendant Cargill used discussions and exchange of
compensation information with the Processor Conspirators to assist in
determining the ``salary bands'' it would set for salaried worker
positions. Cargill sent these band amounts to local plant managers to
inform the setting of local wages. Cargill admitted that on at least
one occasion the WMS Survey Group compensation data influenced
Cargill's decision to lower the salary band range
[[Page 34049]]
for plant supervisors from where it had originally set that band.
207. The Processor Conspirators' compensation information exchanges
therefore distorted compensation-setting processes in the poultry
processor plant worker labor market and harmed the competitive process.
VII. Violations Alleged
Count I: Sherman Act Section 1 (By the United States Against All
Defendants)
208. Paragraphs 1 through 207 are repeated and realleged as if
fully set forth herein.
209. The Processor Defendants violated Section 1 of the Sherman
Act, 15 U.S.C. 1, by agreeing to collaborate with and assist their
competitors in making poultry processing worker compensation decisions,
to exchange current and future, disaggregated, and identifiable
information about their compensation of poultry processing plant
workers, and to facilitate this collaboration and such exchanges. This
agreement suppressed compensation for poultry processing workers for
decades.
210. This agreement included more than 20 years of discussions
between and among these competitors about wage and benefit policies and
amounts, which went well beyond the sharing of information and included
consultation and advice-giving--as one processor put it, ``a
collaborative working relationship''--on decisions that were
competitively sensitive and should have been made independently.
211. The agreement also included exchanging (or, for the Consultant
Defendants, facilitating the exchange of) competitively sensitive
information about poultry processing plant workers' wages and benefits
at both local levels and the national level. Such exchanges allowed
these competitors to understand wages and benefits paid or planned by
specific competitors, in specific places, to specific types of workers.
(Standing alone, these exchanges of information would constitute a
violation of Section 1 of the Sherman Act.)
212. The Processor Defendants themselves understood that their
anticompetitive agreement likely raised serious legal concerns. They
went to great lengths to keep their exchanges confidential. Some
expressed their concerns explicitly; others abandoned some of the
larger-group exchanges once antitrust investigations and private
lawsuits began to uncover their behavior. The Processor Defendants and
Processor Conspirators nonetheless continued exchanging information
through less observable methods, for example through Consultant Co-
Conspirator 1.
213. The Processor Conspirators' market power increases their
agreement's likely anticompetitive effects. In relevant local labor
submarkets, they control more than 80 percent of poultry processing
jobs--in some areas, likely 100 percent of poultry processing jobs--and
thus have market power in local markets for poultry processing plant
workers. They enjoy outsize market power over the supply of poultry
processing plant jobs in these local areas, in which they are often
among the largest employers. In the national market, they control over
90 percent of poultry processing jobs nationwide, and thus have buyer
market power in the nationwide market for poultry processing plant
workers. Their choice to collaborate on compensation decisions and to
exchange information, even though they had buyer market power,
disrupted the competitive mechanism for negotiating and setting wages
and benefits for poultry processing plant workers and harmed the
competitive process.
214. As described in more detail in paragraphs 1 through 213 above,
from 2000 or earlier to the present, Defendants Cargill, George's,
Sanderson, Wayne, WMS, and G. Jonathan Meng agreed to collaborate with
and assist their competitors in making compensation decisions and to
exchange current and future, disaggregated, and identifiable
compensation information, or to facilitate this anticompetitive
agreement, an unlawful restraint of trade under Section 1 of the
Sherman Act, 15 U.S.C. 1.
215. There is no justification, procompetitive or otherwise, for
large, profitable, and sophisticated competitors collaborating with the
effect of suppressing wages and benefits for their workers.
216. The Defendants' agreement to collaborate on compensation
decisions, exchange current and future compensation information, and
facilitate those collaborations and exchanges suppressed poultry
processing plant worker compensation. It constitutes an unreasonable
restraint of interstate trade and commerce in the nationwide and in
local labor markets for hourly and salaried poultry processing plant
workers. This offense is likely to continue and recur unless this court
grants the requested relief.
Count II: Packers and Stockyards Act Section 202(a) (By the United
States Against Sanderson and Wayne Only)
217. Paragraphs 1 through 216 are repeated and realleged as if
fully set forth herein.
218. Defendants Sanderson and Wayne violated Section 202(a) of the
Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C.
192(a), by engaging in deceptive practices regarding their contracts
with growers. These deceptions deprived growers of material information
necessary to make informed decisions about their contracting
opportunities and to compare offers from different poultry processors.
219. Defendants Sanderson and Wayne are ``live poultry dealers''
under 7 U.S.C. 182(10), because each is engaged in the business of
obtaining live poultry under a poultry growing arrangement for the
purpose of slaughtering it.
220. Defendants Sanderson's and Wayne's grower contracts concern
``live poultry'' under 7 U.S.C. 182(6), 192, because the contracts
concerned the raising of live chickens.
221. Defendants Sanderson and Wayne each engaged in deceptive
practices through their grower contracts, which omitted material
disclosures about how each compensates growers. Those disclosures would
have provided information the grower needs to effectively compete in
the tournament system and allowed growers to evaluate their likely
return and risks, including, among other things the variability of
inputs the grower would receive, the risks regarding downside penalties
for underperforming relative to other growers in the tournament system.
222. Defendants Sanderson's and Wayne's deceptive practices are
ongoing and likely to continue and recur unless the court grants the
requested relief.
VIII. Requested Relief
223. The United States requests that this Court:
a. rule that Defendants' conspiracy to collaborate on processing
plant compensation decisions, including through the exchange of
compensation information, has unreasonably restrained trade and is
unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1;
b. rule that Defendants' exchange of compensation information
itself, without more, has unreasonably restrained trade and is unlawful
under Section 1 of the Sherman Act, 15 U.S.C. 1;
c. permanently enjoin and restrain all Defendants from
collaborating on
[[Page 34050]]
decisions related to worker wages and benefits with any other company
engaged in poultry growing or processing or the sale of poultry
products;
d. permanently enjoin and restrain all Defendants from sharing, or
facilitating the sharing of, information about compensation for their
workers with any other company engaged in poultry growing or processing
or the sale of poultry products, whether that sharing is direct or
indirect;
e. require all Defendants to take such internal measures as are
necessary to ensure compliance with that injunction;
f. impose on all Defendants a Monitoring Trustee to ensure
compliance with the antitrust laws;
g. grant equitable monetary relief;
h. permanently enjoin and restrain Defendants Sanderson and Wayne
from engaging in deceptive practices regarding their contracts with
growers;
i. require Defendants Sanderson and Wayne to make appropriate
disclosures to growers before entering into contracts concerning live
poultry, in order to provide sufficient information for the growers to
understand the scope of the contract and the potential risks;
j. require Defendants Sanderson and Wayne to modify their grower
compensation systems to eliminate the harm arising from each firm's
failure to disclose to growers all of the potential risks associated
with that firm's compensation system;
k. grant other relief as required by the nature of this case and as
is just and proper to prevent the recurrence of the alleged violation
and to dissipate its anticompetitive effects, including such structural
relief as may be necessary to prevent the anticompetitive effects
caused by the challenged conduct and described in this Amended
Complaint;
l. award the United States the costs of this action; and
m. award such other relief to the United States as the Court may
deem just and proper.
Dated: May 17, 2023
Respectfully submitted,
For Plaintiff United States of America,
Jonathan Kanter,
Assistant Attorney General.
Doha Mekki,
Principal Deputy Assistant Attorney General.
Michael Kades,
Deputy Assistant Attorney General.
Hetal J. Doshi,
Deputy Assistant Attorney General for Litigation.
Ryan Danks,
Director of Civil Enforcement.
Miriam R. Vishio (USDC Md. Bar No. 17171),
Deputy Director of Civil Enforcement.
Daniel Guarnera,
Acting Chief, Civil Conduct Task Force.
Kate M. Riggs (USDC Md. Bar No. 18154),
Acting Assistant Chief, Civil Conduct Task Force.
United States Department of Justice, Antitrust Division.
By:--------------------------------------------------------------------
Kathleen Simpson Kiernan,
Jessica J. Taticchi,
Jeremy C. Keeney,
Eun Ha Kim,
United States Department of Justice, Antitrust Division, Civil
Conduct Task Force, 450 Fifth Street NW, Suite 8600, Washington, DC
20530, Tel: 202-353-3100, Fax: 202-616-2441,
[email protected].
Erek L. Barron,
United States Attorney.
Ariana Wright Arnold,
USDC Md. Bar No. 23000,
Assistant United States Attorney, 36 S Charles St., 4th Floor,
Baltimore, Maryland 21201, Tel: 410-209-4813, Fax: 410-962-2310,
[email protected].
United States District Court for the District of Maryland
United States of America, Plaintiff, v. Cargill Meat Solutions
Corporation, et al., Defendants.
Civil Action No.: 22-cv-1821
(Gallagher, J.)
[Proposed] Final Judgment
Whereas, Plaintiff, the United States of America, moved to amend
its Complaint on May 17, 2023, alleging that Defendants George's, Inc.
and George's Foods, LLC (collectively, ``Settling Defendants'')
violated Section 1 of the Sherman Act, 15 U.S.C. 1;
And whereas, the United States and Settling Defendants have
consented to the entry of this Final Judgment without the taking of
testimony, without trial or adjudication of any issue of fact or law,
and without this Final Judgment constituting any evidence against or
admission by any party relating to any issue of fact or law;
And whereas, Settling Defendants agree to undertake certain actions
and refrain from certain conduct for the purpose of remedying the
anticompetitive effects alleged in the Amended Complaint;
And whereas, Settling Defendants agree to be bound by the
provisions of this Final Judgment pending its approval by the Court;
Now therefore, it is ordered, adjudged, and decreed:
I. Jurisdiction
This Court has jurisdiction over the subject matter of this action
and each of the parties named herein. The Amended Complaint states a
claim upon which relief may be granted against the Settling Defendants
under Section 1 of the Sherman Act, 15 U.S.C. 1.
II. Definitions
As used in this Final Judgment:
A. ``Agreement'' means any contract, arrangement, or understanding,
formal or informal, oral or written, between two or more persons.
B. ``George's, Inc.'' means Defendant George's, Inc., a privately-
held company headquartered in Springdale, Arkansas, its successors and
assigns, subsidiaries, divisions, groups, affiliates, partnerships, and
joint ventures, and their directors, officers, managers, agents, and
employees.
C. ``George's Foods'' means Defendant George's Foods, LLC, a
company headquartered in Edinburg, Virginia that is an affiliate of
George's, Inc., and its successors and assigns, subsidiaries,
divisions, groups, affiliates, partnerships, and joint ventures, and
their directors, officers, managers, agents, and employees.
D. ``Communicate'' means to discuss, disclose, transfer,
disseminate, circulate, provide, request, solicit, send, receive or
exchange information or opinion, formally or informally, directly or
indirectly, in any manner, and regardless of the means by which it is
accomplished, including orally or by written means of any kind, such as
electronic communications, emails, facsimiles, telephone
communications, voicemails, text messages, audio recordings, meetings,
interviews, correspondence, exchange of written or recorded
information, including surveys, or face-to-face meetings.
E. ``Compensation'' means all forms of payment for work, including
salaried pay, hourly pay, regular or ad hoc bonuses, over-time pay, and
benefits, including healthcare coverage, vacation or personal leave,
sick leave, and life insurance or disability insurance policies.
F. ``Competitively Sensitive Information'' means information that
is relevant to, or likely to have an impact on, at least one dimension
of competition, including price, cost (including Compensation), output,
quality, and innovation. Competitively Sensitive Information includes
prices, strategic plans, amounts and types of Compensation, formula and
algorithms used for calculating Compensation or proposed Compensation,
other information related to costs or profits, markets, distribution,
business relationships, customer lists, production capacity, and any
confidential information the exchange of which could harm competition.
G. ``Consulting Firm'' means any organization, including Webber,
Meng, Sahl & Company, Inc. and Agri Stats,
[[Page 34051]]
Inc., that gathers, sorts, compiles, and/or sells information about
Compensation for Poultry Processing Workers, or provides advice
regarding Compensation for Poultry Processing Workers; ``Consulting
Firm'' does not include job boards, employment agencies or other
entities that facilitate employment opportunities for employees.
H. ``Grower'' means any person engaged in the business of raising
and caring for live Poultry for slaughter by another, whether the
Poultry is owned by such a person or by another, but not an employee of
the owner of such Poultry.
I. ``Human Resources Staff'' means any and all full-time, part-
time, or contract employees of Settling Defendants, wherever located,
whose job responsibilities relate in any way to hiring or retaining
workers, employment, or evaluating, setting, budgeting for,
administering, or otherwise affecting Compensation for Poultry
Processing Workers, and any other employee or agent working at any of
those employees' direction.
J. ``Including'' means including, but not limited to.
K. ``Jien'' means the case Jien v. Perdue Farms, Inc., No. 1:19-cv-
2521 (D. Md.).
L. ``Management'' means all directors and executive officers of
Settling Defendants, or any other of Settling Defendants' employees
with management or supervisory responsibilities related to hiring,
employment, or Compensation of Poultry Processing plant labor,
including Poultry Processing plant managers.
M. ``Person'' means any natural person, corporation, firm, company,
sole proprietorship, partnership, joint venture, association,
institute, governmental unit, or other legal entity.
N. ``Poultry'' means chicken or turkey.
O. ``Poultry Processing'' means the business of raising,
slaughtering, cleaning, packing, packaging, and related activities
associated with producing Poultry, including activities conducted by
Poultry Processors at integrated feed mills, hatcheries, and processing
plant facilities and the management of those activities.
P. ``Poultry Processing Worker'' means anyone paid any
Compensation, directly or indirectly (such as through a temporary
employment agency or third-party staffing agency), by a Poultry
Processor related to Poultry Processing, including temporary workers,
permanent workers, employees, workers paid hourly wages, workers paid
salaried wages, and workers paid benefits.
Q. ``Poultry Processor'' means any person (1) who is engaged in
Poultry Processing or (2) that has full or partial ownership or control
of a Poultry Processing facility, or (3) that provides Compensation to
Poultry Processing Workers; ``Poultry Processor'' does not include
staffing agencies or other entities that are not owned, operated, or
controlled by a person engaged in Poultry Processing or that owns or
controls, in full or part, Poultry Processing facilities, that make
individuals available to work at Poultry Processing facilities.
R. ``Restitution Amount'' means $5.8 million for Settling
Defendants.
III. Applicability
This Final Judgment applies to Settling Defendants and all other
persons in active concert or participation with them who receive actual
notice of this Final Judgment.
IV. Prohibited Conduct
A. Management and Human Resources Staff of each Settling Defendant
must not, whether directly or indirectly, including through a
Consulting Firm or other person:
1. participate in any meeting or gathering (including in-person,
virtual, and telephonic meetings and gatherings) related to
Compensation for Poultry Processing Workers, or for any purpose related
to Compensation for Poultry Processing Workers, at which any other
Poultry Processor not owned or operated by Settling Defendants is
present;
2. Communicate Competitively Sensitive Information about
Compensation for Poultry Processing Workers with any Poultry Processor
not owned or operated by one or both Settling Defendants, including
about types, amounts, or methods of setting or negotiating Compensation
for Poultry Processing Workers;
3. attempt to enter into, enter into, maintain, or enforce any
Agreement with any Poultry Processor not owned or operated by one or
both Settling Defendants about Poultry Processing Worker Compensation
information, including how to set or decide Compensation or the types
of Compensation for Poultry Processing Workers;
4. Communicate Competitively Sensitive Information about
Compensation for Poultry Processing Workers to any Poultry Processor
not owned or operated by one or both Settling Defendants, including
Communicating Competitively Sensitive Information about Compensation
for Poultry Processing Workers to any Consulting Firm that produces
reports regarding Compensation for Poultry Processing Workers that are
shared with other Poultry Processors;
5. use non-public, Competitively Sensitive Information about
Compensation for Poultry Processing Workers from or about any Poultry
Processor not owned or operated by one or both Settling Defendants; or
6. encourage or facilitate the communication of Competitively
Sensitive Information about Compensation for Poultry Processing Workers
to or from any Poultry Processor not owned or operated by one or both
Settling Defendants.
B. Settling Defendants must not knowingly use from any Poultry
Processor not owned or operated by one or both Settling Defendants or
any of that Poultry Processor's officers, consultants, attorneys, or
other representatives any Competitively Sensitive Information about
Compensation for Poultry Processing Workers except as set forth in
Section V or in connection with pending or threatened litigation as a
party or fact witness, pursuant to court order, subpoena, or similar
legal process, or for which any Settling Defendant has received
specific prior approval in writing from the Division.
C. The Settling Defendants must not retaliate against any employee
or third party for disclosing information to the monitor described in
Section VI, a government antitrust enforcement agency, or a government
legislature.
V. Conduct Not Prohibited
A. Nothing in Section IV prohibits a Settling Defendant from
Communicating, using, or encouraging or facilitating the Communication
of, its Competitively Sensitive Information with an actual or
prospective Poultry Processing Worker, or with the Poultry Processing
Worker's labor union or other bargaining agent, except that, if a
prospective Poultry Processing Worker is employed by another Poultry
Processor, Settling Defendants' Communicating, using, or encouraging or
facilitating the Communication of, Competitively Sensitive Information
is excluded from the prohibitions of Section IV only insofar as is
necessary to negotiate the Compensation of a prospective Poultry
Processing Worker. Settling Defendants are not prohibited from
internally using Competitively Sensitive Information received from a
prospective Poultry Processing Worker who is employed by a Poultry
Processor in the ordinary course of a legitimate
[[Page 34052]]
hiring, retention, or off-boarding process, but Settling Defendants are
prohibited from Communicating that Competitively Sensitive Information
about Compensation for Poultry Processing Workers to another Poultry
Processor.
B. Nothing in Section IV prohibits the Settling Defendants from (1)
sharing information with or receiving information from a staffing
agency or entity that is not owned or controlled by any Poultry
Processor, that facilitates employment, if necessary to effectuate an
existing or potential staffing Agreement between the staffing agency or
entity and the Settling Defendants; and (2) advertising Compensation
through public job postings, billboards or help wanted advertisements.
C. Nothing in Section IV prohibits Settling Defendants from, after
securing advice of counsel and in consultation with their respective
antitrust compliance officers, Communicating, using, encouraging or
facilitating the Communication of, or attempting to enter into,
entering into, maintaining, or enforcing any Agreement to Communicate
Competitively Sensitive Information relating to Compensation for
Poultry Processing Workers with any Poultry Processor when such
Communication or use is for the purpose of evaluating or effectuating a
bona fide acquisition, disposition, or exchange of assets:
1. For all Agreements under Paragraph V(C) with any other Poultry
Processor to Communicate Competitively Sensitive Information relating
to Compensation for Poultry Processing Workers that a Settling
Defendant enters into, renews, or affirmatively extends after the date
of entry of this Final Judgment, the Settling Defendant must maintain
documents sufficient to show:
i. the specific transaction or proposed transaction to which the
sharing of Competitively Sensitive Information relating to Compensation
for Poultry Processing Workers relates;
ii. the employees, identified with reasonable specificity, who are
involved in the sharing of Competitively Sensitive Information relating
to Compensation for Poultry Processing Workers;
iii. with specificity the Competitively Sensitive Information
relating to Compensation for Poultry Processing Workers Communicated;
and
iv. the termination date or event of the sharing of Competitively
Sensitive Information relating to Compensation for Poultry Processing
Workers.
2. For Communications under Paragraph V(C), Settling Defendants
must maintain copies of all materials required under Paragraph V(C)(1)
for the duration of the Final Judgment, following entry into any
Agreement to Communicate or receive Competitively Sensitive Information
relating to Compensation for Poultry Processing Workers, and must make
such documents available to the United States and the monitor appointed
under Section VI upon request.
D. Nothing in Section IV prohibits Settling Defendants, after
securing the advice of counsel and in consultation with the antitrust
compliance officer, from engaging in conduct in accordance with the
doctrine established in Eastern Railroad Presidents Conference v. Noerr
Motor Freight, Inc., 365 U.S. 127 (1961), United Mine Workers v.
Pennington, 381 U.S. 657 (1965), and their progeny.
E. Nothing in Paragraph IV(A)(1) prohibits Settling Defendants from
participating in meetings and gatherings in which they receive (but do
not provide) information relating to Compensation that does not reflect
or reveal information received from or about one or more Poultry
Processors.
VI. Monitor
A. Upon application of the United States, which Settling Defendants
may not oppose, the Court will appoint a monitor selected by the United
States and approved by the Court. Within 30 calendar days after entry
of the Stipulation and Order in this case, the Settling Defendants may
together propose to the United States a pool of three candidates to
serve as the monitor, and the United States may consider the Settling
Defendants' perspectives on the Settling Defendants' three proposed
candidates or any other candidates identified by the United States. The
United States retains the right, in its sole discretion, either to
select the monitor from among the three candidates proposed by the
Settling Defendants or to select a different candidate for the monitor.
B. The monitor will have the power and authority to monitor: (1)
Settling Defendants' compliance with the terms of this Final Judgment
entered by the Court, including compliance with Paragraph IV(C), and
(2) Settling Defendants' compliance, regarding events occurring after
entry of the Stipulation and Order in this case (even if such events
began before that date), with the U.S. federal antitrust laws relating
to Poultry Processing, Poultry Processing Workers, Growers, integrated
Poultry feed, hatcheries, the transportation of Poultry and Poultry
products, and the sale of Poultry and Poultry Processing products. The
monitor may also have other powers as the Court deems appropriate. The
monitor's power and authority will not extend to monitoring the
processing of meat or material other than Poultry, even if such
processing of meat or material other than Poultry takes place in a
facility or location that also engages in Poultry Processing. The
monitor will have no right, responsibility or obligation for the
operation of Settling Defendants' businesses, and the Settling
Defendants do not have any obligation to seek the monitor's approval or
authorization before making business decisions. No attorney-client
relationship will be formed between the Settling Defendants and the
monitor.
C. The monitor will serve at the cost and expense of Settling
Defendants pursuant to a written Agreement, on terms and conditions,
including confidentiality requirements and conflict-of-interest
certifications, approved by the United States in its sole discretion.
D. The monitor may hire, at the cost and expense of Settling
Defendants, any agents and consultants, including attorneys and
accountants, that are reasonably necessary in the monitor's judgment to
assist with the monitor's duties. These agents or consultants will be
solely accountable to the monitor and will serve on terms and
conditions, including confidentiality requirements and conflict-of-
interest certifications, approved by the United States in its sole
discretion.
E. The compensation of the monitor and agents or consultants
retained by the monitor must be on reasonable and customary terms
commensurate with the individuals' experience and responsibilities. If
the monitor and Settling Defendants are unable to reach agreement on
the monitor's compensation or other terms and conditions of engagement
within 14 calendar days of the appointment of the monitor, the United
States, in its sole discretion, may take appropriate action, including
by making a recommendation to the Court. Within three business days of
hiring any agents or consultants, the monitor must provide written
notice of the hiring and the rate of compensation to Settling
Defendants and the United States.
F. The monitor must account for all costs and expenses incurred.
G. The monitor will have the authority to take such reasonable
steps as, in the United States' view, may be necessary to accomplish
the monitor's duties. The monitor may seek information from Settling
Defendants' personnel, including in-house counsel, compliance
personnel, and internal
[[Page 34053]]
auditors. If the monitor has confidence in the quality of the
resources, the monitor may consider the products of Settling
Defendants' processes, such as the results of studies, reviews,
sampling and testing methodologies, audits, and analyses conducted by
or on behalf of any Settling Defendant, as well as any of Settling
Defendants' internal resources (e.g., legal, compliance, and internal
audit), which may assist the monitor in carrying out the monitor's
duties). The monitor may take into account (a) the extent to which the
Settling Defendants have dedicated internal personnel to ensure
compliance with this Order, (b) the quality of the compliance work
performed by such internal personnel, and (c) the availability and
quality of analyses conducted by such internal personnel in determining
or modifying an appropriate work plan that enables the monitor to
accomplish his or her duties without unnecessary involvement in the
day-to-day operation of the business. The Settling Defendants will
establish a policy, annually communicated to all employees, that
employees may disclose any information to the monitor, without reprisal
for such disclosure.
H. Settling Defendants must use best efforts to cooperate fully
with the monitor. Subject to reasonable protection for trade secrets
and confidential research, development, or commercial information, or
any applicable privileges or laws, Settling Defendants must (1) provide
the monitor and agents or consultants retained by the monitor with full
and complete access to all personnel, books, records, and facilities,
and (2) use reasonable efforts to provide the monitor with access to
Settling Defendants' former employees, Growers, third-party vendors,
agents, and consultants. Settling Defendants may not take any action to
interfere with or to impede accomplishment of the monitor's
responsibilities.
I. If Settling Defendants seek to withhold from the monitor access
to anything or anyone on the basis of attorney-client privilege or the
attorney work-product doctrine, or because Settling Defendants
reasonably believe providing the monitor with access would be
inconsistent with applicable law, the Settling Defendants must work
cooperatively with the monitor to resolve the issue to the satisfaction
of the monitor. If Settling Defendants and the monitor do not reach a
resolution of the issue to the satisfaction of the monitor within 21
calendar days, Settling Defendants must immediately provide written
notice to the United States and the monitor. The written notice must
include a description of what is being withheld and the Settling
Defendants' legal basis for withholding access.
J. Except as specifically provided by Paragraph VI(I), Settling
Defendants may not object to requests made or actions taken by the
monitor in fulfillment of the monitor's responsibilities under this
Final Judgment or any other Order of the Court on any ground other than
malfeasance by the monitor; provided, however, that if Settling
Defendants believe in good faith that a request or action by the
monitor pursuant to the monitor's authority under Paragraph VI(B)(2)
exceeds the scope of the monitor's authority or is unduly burdensome,
the Settling Defendants may object to the United States. Objections by
Settling Defendants under this Paragraph VI(J) regarding a request or
action exceeding the monitor's scope must be conveyed in writing to the
United States and the monitor within 10 calendar days of the monitor's
request or action that gives rise to Settling Defendants' objection.
Objections by Settling Defendants under this Paragraph VI(J) regarding
a request or action being unduly burdensome must be made, with
specificity, to the monitor within seven calendar days of the request
or action; if the Settling Defendants and the monitor cannot resolve
the objections regarding a request or action being unduly burdensome,
within 21 days of the request or action the Settling Defendants must
convey their objections in writing to the United States. All objections
will be resolved by the United States, in its sole discretion.
K. The monitor must investigate and report on Settling Defendants'
compliance with this Final Judgment, including those provisions
governing Settling Defendants' communications with Poultry Processors
and third parties related to Poultry Processing Worker Compensation
information, and Settling Defendants' compliance, regarding events
occurring after entry of the Stipulation and Order in this case (even
if such events began before that date), with the U.S. federal antitrust
laws relating to Poultry Processing, Poultry Processing Workers,
Growers, integrated Poultry feed, hatcheries, the transportation of
Poultry and Poultry products, and the sale of Poultry and Poultry
Processing products.
L. The monitor must provide periodic written reports to the United
States and the Settling Defendants setting forth Settling Defendants'
efforts to comply with their obligations under this Final Judgment and
the U.S. federal antitrust laws relating to Poultry Processing, Poultry
Processing Workers, Growers, integrated Poultry feed, hatcheries, the
transportation of Poultry and Poultry products, and the sale of Poultry
and Poultry Processing products. The monitor must provide written
reports every six months for the first two years of the term of the
monitor's appointment after which the monitor must provide written
reports on an annual basis. The monitor must provide the first written
report within six months of the monitor's appointment by the Court. The
United States, in its sole discretion, may change the frequency of the
monitor's written reports at any time, communicate or meet with the
monitor at any time, and make any other requests of the monitor as the
United States deems appropriate.
M. Within 30 days after appointment of the monitor by the Court,
and on a yearly basis thereafter, the monitor must provide to the
United States and Settling Defendants a written work plan for the
monitor's proposed review. Settling Defendants may provide comments on
a written work plan to the United States and the monitor within 14
calendar days after receipt of the written work plan. The United States
retains the right, in its sole discretion, to request changes or
additions to a work plan at any time. Any disputes between Settling
Defendants and the monitor with respect to any written work plan will
be decided by the United States in its sole discretion.
N. The monitor will serve for the full term of this Final Judgment,
unless the United States, in its sole discretion, determines a
different period is appropriate. After three years from the date this
Final Judgment was entered, the United States, in its sole discretion,
will determine whether continuation of the monitor's full term is
appropriate, or whether to suspend the remainder of the term.
O. If the United States determines that the monitor is not acting
diligently or in a reasonably cost-effective manner or if the monitor
becomes unable to continue in their role for any reason, the United
States may recommend that the Court appoint a substitute.
VII. Required Conduct
A. Within 10 days of entry of this Final Judgment, Settling
Defendants must appoint an antitrust compliance officer who is an
internal employee or officer of the Settling Defendants and identify to
the United States the antitrust compliance officer's name, business
address, telephone number, and email address. Within 45 days of a
vacancy in the antitrust compliance
[[Page 34054]]
officer position, Settling Defendants must appoint a replacement, and
must identify to the United States the antitrust compliance officer's
name, business address, telephone number, and email address. Settling
Defendants' initial or replacement appointment of an antitrust
compliance officer is subject to the approval of the United States, in
its sole discretion.
B. Settling Defendants' antitrust compliance officer must have, or
must retain outside counsel who has, the following minimum
qualifications:
1. be an active member in good standing of the bar in any U.S.
jurisdiction; and
2. have at least five years' experience in legal practice,
including experience with antitrust matters.
C. Settling Defendants' antitrust compliance officer must, directly
or through the employees or counsel working at the direction of the
antitrust compliance officer:
1. within 14 days of entry of the Final Judgment, furnish to the
relevant Settling Defendants' Management, all Human Resources Staff,
and Settling Defendants' retained Consulting Firms and utilized
temporary employment agencies a copy of this Final Judgment, the
Competitive Impact Statement filed by the United States with the Court,
and a cover letter in a form attached as Exhibit 1;
2. within 14 days of entry of the Final Judgment, in a manner to be
devised by Settling Defendants and approved by the United States, in
its sole discretion, provide Settling Defendants' Management, all Human
Resources Staff, and Settling Defendant's retained Consulting Firms and
utilized temporary employment agencies reasonable notice of the meaning
and requirements of this Final Judgment;
3. annually brief Settling Defendants' Management, Human Resources
Staff, and Settling Defendants' retained Consulting Firms and utilized
temporary employment agencies on the meaning and requirements of this
Final Judgment and the U.S. federal antitrust laws;
4. brief any person who succeeds a person in any position
identified in Paragraph VII(C)(3) within 60 days of such succession;
5. obtain from each person designated in Paragraph VII(C)(3) or
VII(C)(4), within 30 days of that person's receipt of the Final
Judgment, a certification that the person (i) has read and understands
and agrees to abide by the terms of this Final Judgment; (ii) is not
aware of any violation of the Final Judgment or of any violation of any
U.S. antitrust law that has not been reported to Settling Defendants'
Management; and (iii) understands that failure to comply with this
Final Judgment may result in an enforcement action for civil or
criminal contempt of court;
6. annually communicate to Settling Defendants' Management and
Human Resources Staff, and Settling Defendants' retained Consulting
Firms and utilized temporary employment agencies that they may disclose
to the antitrust compliance officer, without reprisal for such
disclosure, information concerning any violation or potential violation
of this Final Judgment or the U.S. federal antitrust laws by Settling
Defendants; and
7. maintain for five years or until expiration of the Final
Judgment, whichever is longer, a copy of all materials required to be
issued under Paragraph VII(C), and furnish them to the United States
within 10 days if requested to do so, except documents protected under
the attorney-client privilege or the attorney work-product doctrine.
D. Each Settling Defendant must:
1. within 30 days of the filing of the Amended Complaint, Proposed
Final Judgment, or Competitive Impact Statement in this action,
whichever is latest, provide notice to every Poultry Processor and to
every Consulting Firm with which that Settling Defendant has a contract
or Agreement in place relating to Compensation for Poultry Processing
Workers, of the Amended Complaint, Proposed Final Judgment, and
Competitive Impact Statement in a form and manner to be proposed by
Settling Defendants and approved by the United States, in its sole
discretion. Settling Defendants must provide the United States with
their proposals, including their lists of recipients, within 10 days of
the filing of the Amended Complaint;
2. for all materials required to be furnished under Paragraph
VII(C) that Settling Defendants claim are protected under the attorney-
client privilege or the attorney work-product doctrine, Settling
Defendants must furnish to the United States a privilege log;
3. upon Management or the antitrust compliance officer learning of
any violation or potential violation of any of the terms and conditions
contained in this Final Judgment, promptly take appropriate action to
terminate or modify the activity so as to comply with this Final
Judgment and maintain, and produce to the United States upon request,
all documents related to any violation or potential violation of this
Final Judgment;
4. file with the United States a statement describing any violation
or potential violation within 30 days of a violation or potential
violation becoming known to Management or the antitrust compliance
officer. Descriptions of violations or potential violations of this
Final Judgment must include, to the extent practicable, a description
of any communications constituting the violation or potential
violation, including the date and place of the communication, the
persons involved, and the subject matter of the communication;
5. have their Chief Executive Officers or President certify to the
United States annually on the anniversary date of the entry of this
Final Judgment that the Settling Defendants have complied with all of
the provisions of this Final Judgment, and list all Agreements subject
to Paragraph V(C) from the prior year; and
6. maintain and produce to the United States upon request: (i) a
list identifying all employees having received the antitrust briefings
required under Paragraphs VII(C)(3) and VII(C)(4); and (ii) copies of
all materials distributed as part of the antitrust briefings required
under Paragraph VII(C)(3) and VII(C)(4). For all materials requested to
be produced under this Paragraph VII(D)(6) that a Settling Defendant
claims is protected under the attorney-client privilege or the attorney
work-product doctrine, Settling Defendant must furnish to the United
States a privilege log.
G. The term ``potential violation'' as used in this Section VII
does not include the discussion with counsel, the antitrust compliance
officer, or anyone working at counsel's or the antitrust compliance
officer's direction, regarding future conduct.
VIII. Required Cooperation
A. Settling Defendants must cooperate fully and truthfully with the
United States in any investigation or litigation relating to the
sharing of Poultry Processing Worker Compensation information among
Poultry Processors, in violation of Section 1 of the Sherman Act, as
amended, 15 U.S.C. 1. Settling Defendants must use their best efforts
to ensure that all current officers, directors, employees, and agents
also fully and promptly cooperate with the United States and use
reasonable efforts to ensure that all former officers, directors,
employees, and agents also fully and promptly cooperate with the United
States. The full, truthful, and continuing cooperation of Settling
Defendants must include:
1. as requested on reasonable notice by the United States, being
available for interviews, depositions, and providing
[[Page 34055]]
sworn testimony to the United States orally and in writing as the
United States so chooses;
2. producing, upon request of the United States, all documents,
data, information, and other materials, wherever located, not protected
under the attorney-client privilege or attorney work product doctrine,
in the possession, custody, or control of that Settling Defendant, and
a privilege log of any materials the Settling Defendant claims are
protected under the attorney-client privilege or the attorney work-
product doctrine; and
3. testifying at trial and other judicial proceedings fully,
truthfully, and under oath, when called upon to do so by the United
States.
B. The obligations of Settling Defendants to cooperate fully and
truthfully with the United States as required in this Section VIII will
cease upon the conclusion of all investigations and litigation related
to the sharing of Poultry Processing Worker Compensation information in
violation of Section 1 of the Sherman Act, including exhaustion of all
appeals or expiration of time for all appeals of any Court ruling in
this matter, or the expiration of the Final Judgment, whichever is
later.
C. Settling Defendants must take all necessary steps to preserve
all documents and information relevant to the United States'
investigations and litigation alleging that Settling Defendants and
other Poultry Processors shared Poultry Processing Worker Compensation
information in violation of Section 1 of the Sherman Act until the
United States provides written notice to the Settling Defendants that
their obligations under this Section VIII have expired.
D. Subject to the full, truthful, and continuing cooperation of
each Settling Defendant, as required under this Section VIII, Settling
Defendants are fully and finally discharged and released from any civil
or criminal claim by the United States arising from the sharing of
Poultry Processing Worker Compensation information among Poultry
Processors prior to the date of filing of the Amended Complaint in this
action; provided, however, that this discharge and release does not
include any criminal claim arising from any subsequently-discovered
evidence of an Agreement to fix prices or wages or to divide or
allocate markets, including to allocate Poultry Processing Workers.
E. Paragraph VIII(D) does not apply to any acts of perjury or
subornation of perjury (18 U.S.C. 1621-22), making a false statement or
declaration (18 U.S.C. 1001, 1623), contempt (18 U.S.C. 401-402), or
obstruction of justice (18 U.S.C. 1503, et seq.) by any Settling
Defendant.
IX. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment or of determining whether this Final Judgment should be
modified or vacated, upon written request of an authorized
representative of the Assistant Attorney General for the Antitrust
Division, and reasonable notice to Settling Defendants, Settling
Defendants must permit, from time to time and subject to legally
recognized privileges, authorized representatives, including agents
retained by the United States:
1. to have access during Settling Defendants' office hours to
inspect and copy, or at the option of the United States, to require
Settling Defendants to provide electronic copies of all books, ledgers,
accounts, records, data, and documents in the possession, custody, or
control of Settling Defendants relating to any matters contained in
this Final Judgment; and
2. to interview, either informally or on the record, Settling
Defendants' officers, employees, or agents, who may have their
individual counsel present, relating to any matters contained in this
Final Judgment. The interviews must be subject to the reasonable
convenience of the interviewee and without restraint or interference by
Settling Defendants.
B. Upon the written request of an authorized representative of the
Assistant Attorney General for the Antitrust Division, Settling
Defendants must submit written reports or respond to written
interrogatories, under oath if requested, relating to any matters
contained in this Final Judgment.
X. Restitution
A. Within 60 days of entry of this Final Judgment, Settling
Defendants must place funds equal to 10% of their Restitution Amount
into an escrow account selected by the United States, in its sole
discretion.
B. If the Jien Court grants a motion for final approval of a
settlement and certification of a settlement class with respect to
Settling Defendants' settlement with the Jien plaintiffs, the entire
balance of Settling Defendants' escrow account, including any accrued
interest and less any administrative costs, must be returned to
Settling Defendants.
C. If Settling Defendants have not entered into a settlement
agreement with the plaintiffs in Jien before entry of this Final
Judgment, or if preliminary or final approval of a settlement is
denied, or if certification of a settlement class is denied, or if a
settlement is terminated or rescinded for any reason, Settling
Defendants, within 21 days after (1) entry of this Final Judgment in
the case of Settling Defendants having not reached a settlement
agreement with the plaintiffs in Jien, or (2) any order denying
settlement approval or certification of the settlement class or any
termination or rescinding of a settlement, must deposit into their
escrow account an amount equal to their Restitution Amount. This amount
must be in addition to the initial 10% payment made pursuant to
Paragraph X(A) and any accrued interest already present in the Settling
Defendants' escrow account. Upon full funding of the escrow account,
the entire balance of the escrow account, including any accrued
interest, must be released to the United States for distribution to
affected Poultry Processing Workers in the form of restitution and
payment for expenses related to distribution. In the event that
preliminary or final approval of a settlement or class certification is
denied, or the settlement agreement is rescinded or terminated, for
reasons that the United States in its sole discretion believes to be
curable, the United States, in its sole discretion, may agree to one or
more extensions of the 21-day period in this Paragraph X(C).
D. The claims and disbursement process will be established in the
sole discretion of the United States. Settling Defendants must
reimburse the United States for any costs associated with claims
administration or remittance of restitution, including fees payable to
a third-party claims administrator hired at the United States' sole
discretion, that extend beyond the sum of the initial 10% payments made
by Settling Defendants under Paragraph X(A). Contributions beyond the
initial 10% payments will be made on a pro rata basis based on Settling
Defendants' Restitution Amount.
E. Upon completion of the restitution payments, the United States
must return any funds remaining in the escrow account to the Settling
Defendants, on a pro rata basis based on Settling Defendants'
Restitution Amount.
XI. Public Disclosure
A. No information or documents obtained pursuant to any provision
in this Final Judgment, including reports the monitor provides to the
United States pursuant to Paragraphs VI(K) and VI(L), may be divulged
by the United States or the monitor to any person other than an
authorized representative of the executive branch of the United States,
except in the course of legal
[[Page 34056]]
proceedings to which the United States is a party, including grand-jury
proceedings, for the purpose of securing compliance with this Final
Judgment, or as otherwise required by law. In the event that the
monitor should receive a subpoena, court order or other court process
seeking production of information or documents obtained pursuant to any
provision in this Final Judgment, including reports the monitor
provides to the United States pursuant to Paragraphs VI(K) and VI(L),
the applicable disclosing party shall notify Settling Defendants
immediately and prior to any disclosure, so that Settling Defendants
may address such potential disclosure and, if necessary, pursue
alternative legal remedies, including if deemed appropriate by Settling
Defendants, intervention in the relevant proceedings.
B. In the event of a request by a third party, pursuant to the
Freedom of Information Act, 5 U.S.C. 552, for disclosure of information
obtained pursuant to any provision of this Final Judgment, the
Antitrust Division will act in accordance with that statute, and the
Department of Justice regulations at 28 CFR part 16, including the
provision on confidential commercial information, at 28 CFR 16.7.
Settling Defendants submitting information to the Antitrust Division
should designate the confidential commercial information portions of
all applicable documents and information under 28 CFR 16.7.
Designations of confidentiality expire 10 years after submission,
``unless the submitter requests and provides justification for a longer
designation period.'' See 28 CFR 16.7(b).
C. If at the time that Settling Defendants furnish information or
documents to the United States pursuant to any provision of this Final
Judgment, Settling Defendants represent and identify in writing
information or documents for which a claim of protection may be
asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil
Procedure, and Settling Defendants mark each pertinent page of such
material, ``Subject to claim of protection under Rule 26(c)(1)(G) of
the Federal Rules of Civil Procedure,'' the United States must give
Settling Defendants 10 calendar days' notice before divulging the
material in any legal proceeding (other than a grand jury proceeding).
XII. Retention of Jurisdiction
The Court retains jurisdiction to enable any party to this Final
Judgment to apply to the Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
XIII. Enforcement of Final Judgment
A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including the right to seek an order
of contempt from the Court. Settling Defendants agree that in a civil
contempt action, a motion to show cause, or a similar action brought by
the United States relating to an alleged violation of this Final
Judgment, the United States may establish a violation of this Final
Judgment and the appropriateness of a remedy therefor by a
preponderance of the evidence, and Settling Defendants waive any
argument that a different standard of proof should apply.
B. This Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore the
competition the United States alleges was harmed by the challenged
conduct. Settling Defendants agree that they may be held in contempt
of, and that the Court may enforce, any provision of this Final
Judgment that, as interpreted by the Court in light of these
procompetitive principles and applying ordinary tools of
interpretation, is stated specifically and in reasonable detail,
whether or not it is clear and unambiguous on its face. In any such
interpretation, the terms of this Final Judgment should not be
construed against either party as the drafter.
C. In an enforcement proceeding in which the Court finds that any
Settling Defendant has violated this Final Judgment, the United States
may apply to the Court for an extension of this Final Judgment,
together with other relief that may be appropriate. In connection with
a successful effort by the United States to enforce this Final Judgment
against a Settling Defendant, whether litigated or resolved before
litigation, that Settling Defendant agrees to reimburse the United
States for the fees and expenses of its attorneys, as well as all other
costs including experts' fees, incurred in connection with that effort
to enforce this Final Judgment, including in the investigation of the
potential violation.
D. For a period of four years following the expiration of this
Final Judgment, if the United States has evidence that a Settling
Defendant violated this Final Judgment before it expired, the United
States may file an action against that Settling Defendant in this Court
requesting that the Court order: (1) Settling Defendant to comply with
the terms of this Final Judgment for an additional term of at least
four years following the filing of the enforcement action; (2) all
appropriate contempt remedies; (3) additional relief needed to ensure
the Settling Defendant complies with the terms of this Final Judgment;
and (4) fees or expenses as called for by this Section XIII.
XIV. Expiration of Final Judgment
Unless the Court grants an extension, this Final Judgment will
expire seven years from the date of its entry, except that after three
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Settling Defendants
that continuation of this Final Judgment is no longer necessary or in
the public interest. Provided, however, that the obligations under
Section X will continue as long as one or more of the escrow accounts
created under Section X remain open.
XV. Reservation of Rights
The Final Judgment terminates only the claims expressly stated in
the Amended Complaint. The Final Judgment does not in any way affect
any other charges or claims filed by the United States subsequent to
the commencement of this action, including any charges or claims
relating to Growers, integrated Poultry feed, hatcheries, Poultry
products, the transportation of Poultry and Poultry products, and the
sale of Poultry and Poultry products.
XVI. Notice
For purposes of this Final Judgment, any notice or other
communication required to be filed with or provided to the United
States must be sent to the address set forth below (or such other
address as the United States may specify in writing to any Settling
Defendant): Chief, Civil Conduct Task Force, U.S. Department of
Justice, Antitrust Division, 450 Fifth Street, Washington, DC 20530,
[email protected].
XVII. Public Interest Determination
Entry of this Final Judgment is in the public interest. The
Settling Defendants have complied with the requirements of the
Antitrust Procedures and Penalties Act, 15 U.S.C. 16, including by
making available to the public copies of this Final Judgment and the
Competitive Impact Statement, public comments thereon, and any response
to comments by the United States. Based upon the record before the
Court, which includes the Competitive Impact Statement and, if
applicable, any comments and response to comments filed with the
[[Page 34057]]
Court, entry of this Final Judgment is in the public interest.
Date:------------------------------------------------------------------
[Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16]
United States District Judge-------------------------------------------
Exhibit 1
[Version for Management and Human Resources Staff]
[Letterhead of Settling Defendant]
[Name and Address of Antitrust Compliance Officer]
Dear [XX]:
I am providing you this letter to make sure you know about a court
order recently entered by a federal judge in [jurisdiction]. This order
applies to [Settling Defendant's] Human Resources Staff and Management
as defined in Section II (Definitions) of the attached Final Judgment,
including you, so it is important that you understand the obligations
it imposes on us. [CEO or President Name] has asked me to let each of
you know that s/he expects you to take these obligations seriously and
abide by them.
Under the order, we are largely prohibited from communicating with
other poultry processors, whether directly or indirectly (such as
through a consulting agency) about poultry processing plant worker
compensation--pay or benefits. This means you may not discuss with any
poultry processor or employee of a poultry processor any non-public
information about our plant workers' wages, salaries, and benefits, and
you may not ask any poultry processor or employee of a poultry
processor for any non-public information about their plant workers'
wages, salaries, and benefits. In addition, we are largely prohibited
from sending any non-public information about our processing plant
workers' wages and benefits to any third party, such as a consulting
agency. There are only limited exceptions to these prohibitions, which
are outlined in Section V (Conduct Not Prohibited) of the Final
Judgment.
A copy of the court order is attached. Please read it carefully and
familiarize yourself with its terms. The order, rather than the above
description, is controlling. If you have any questions about the order
or how it affects your activities, please contact me.
Thank you for your cooperation.
Sincerely,
[Settling Defendant's Antitrust Compliance Officer]
* * * * *
[Version for Consulting Firms and temporary employment agencies]
[Letterhead of Settling Defendant]
[Name and Address of Antitrust Compliance Officer]
Dear [XX]:
I am providing you this letter to make sure you know about a court
order recently entered by a federal judge in [jurisdiction]. This order
applies to [Settling Defendant's] Consulting Firms as defined in
Section II (Definitions) of the attached Final Judgment and temporary
employment agencies, including your agency, so it is important that you
understand the obligations it imposes on us. [CEO or President Name]
has asked me to let each of you know that s/he expects you to take
these obligations seriously and abide by them.
Under the order, we are largely prohibited from communicating with
other poultry processors, whether directly or indirectly (such as
through a Consulting Firm or temporary employment agency, including
your agency) about poultry processing plant worker compensation--pay or
benefits. This means you may not disclose to us any non-public
information about another poultry processor's plant workers' wages,
salaries, and benefits, and you may not provide any non-public
information about our poultry plant workers' wages, salaries, and
benefits to another poultry processor. In addition, we are largely
prohibited from sending any non-public information about our processing
plant workers' wages and benefits to any third party, such as a
Consulting Firm or temporary employment agency, including your agency.
There are only limited exceptions to these prohibitions, which are
outlined in Section V (Conduct Not Prohibited) of the Final Judgment.
A copy of the court order is attached. Please read it carefully and
familiarize yourself with its terms. The order, rather than the above
description, is controlling. If you have any questions about the order
or how it affects your activities, please contact me.
Thank you for your cooperation.
Sincerely,
[Settling Defendant's Antitrust Compliance Officer]
United States District Court for the District of Maryland
United States Of America, Plaintiff, v. Cargill Meat Solutions
Corporation, et al., Defendants.
Civil Action No.: 22-cv-1821
(Gallagher, J.)
Competitive Impact Statement
In accordance with the Antitrust Procedures and Penalties Act, 15
U.S.C. 16(b)-(h) (the ``Tunney Act''), the United States of America
files this Competitive Impact Statement related to the proposed Final
Judgment as to Defendants George's, Inc. and George's Foods, LLC
(collectively, ``Settling Defendants'').
I. Nature and Purpose of the Proceeding
On July 25, 2022, the United States filed a civil Complaint against
Cargill Meat Solutions Corp. and Cargill, Inc. (``Cargill''), Wayne
Farms, LLC (``Wayne''), Sanderson Farms, Inc. (``Sanderson''), Webber,
Meng, Sahl and Company, Inc., d/b/a WMS & Company, Inc. (``WMS'') and
G. Jonathan Meng (``Meng''). The Complaint alleged that those
defendants, together with another data consultant and other poultry
processors that combined controlled over 90% of poultry processing jobs
nationwide, conspired from 2000 or before to the present to assist
their competitors in making compensation decisions, to exchange current
and future, disaggregated, and identifiable compensation information,
and to facilitate this anticompetitive agreement. These conspirators
collaborated on decisions about poultry plant worker compensation,
including through the direct exchange of compensation information. This
conspiracy suppressed competition in the nationwide and local labor
markets for poultry processing. Their agreement distorted the
competitive process, disrupted the competitive mechanism for setting
wages and benefits, and harmed a generation of poultry processing plant
workers by unfairly suppressing their compensation.
With the Complaint, the United States also filed two proposed Final
Judgments, one with respect to Cargill, Wayne, and Sanderson and one
with respect to WMS and Meng (Dkt. Nos. 2 & 3), to settle this lawsuit
as to those five defendants. The Tunney Act review process for those
settlements is ongoing.
On May 17, 2023, the United States filed an Amended Complaint
alleging that beginning in 2005 or before, Settling Defendants also
participated in the conspiracy to exchange information about wages and
benefits for poultry processing plant workers and collaborate with
their competitors on compensation decisions. The Amended Complaint does
not contain additional causes of action or requests for relief.
The Amended Complaint alleges that, from 2005 or before to the
present, the Settling Defendants and their poultry processing and
consultant co-conspirators exchanged compensation information through
the dissemination of survey reports in which they shared current and
future, detailed, and
[[Page 34058]]
identifiable plant-level and job-level compensation information for
poultry processing plant workers. The shared information allowed
poultry processors to determine the wages and benefits their
competitors were paying--and planning to pay--for specific job
categories at specific plants.
The Amended Complaint further alleges that the Settling Defendants
and their co-conspirators met in person at annual meetings. From at
least 2005 to 2018, Settling Defendants attended meetings with other
poultry processors during which they and the consultant co-conspirators
facilitated, supervised, and participated in the exchange of
confidential, competitively sensitive information about poultry plant
workers.
The Settling Defendants' and their co-conspirators' collaboration
on compensation decisions and exchange of competitively sensitive
compensation information extended beyond the shared survey reports and
in-person annual meetings. As alleged in the Amended Complaint, from
2005 or before to the present, the Settling Defendants and their co-
conspirators repeatedly contacted each other to seek and provide advice
and assistance on compensation decisions, including by sharing further
non-public information regarding each other's wages and benefits. This
demonstrates a clear agreement between competitors to ask for help with
compensation decisions and to provide such help to others upon request.
In sum, this conspiracy, from at least 2005 to the present,
permitted the Settling Defendants and their co-conspirators to
collaborate with and assist their competitors in making decisions about
worker compensation, including wages and benefits, and to exchange
information about current and future compensation plans. Through this
conspiracy, the Settling Defendants artificially suppressed
compensation for poultry processing workers.
The Complaint and the Amended Complaint also include a claim
alleging that Defendants Sanderson and Wayne acted deceptively in the
manner in which they compensated poultry growers in violation of
Section 202(a) of the Packers and Stockyards Act, 1921, as amended and
supplemented, 7 U.S.C. 192(a). The Settling Defendants are not
defendants as to this claim.
At the time the Amended Complaint was filed, the United States also
filed a proposed Final Judgment and Stipulation and Order with respect
to the Settling Defendants, which is designed to remedy the
anticompetitive effects resulting from the harm alleged in the Amended
Complaint.
The proposed Final Judgment for the Settling Defendants, explained
more fully below, requires the Settling Defendants to:
a. end their agreement to collaborate with and assist in making
compensation decisions for poultry processing workers and their
anticompetitive exchange of compensation information with other poultry
processors;
b. submit to a monitor (determined by the United States in its sole
discretion) for a term of seven years, who will examine the Settling
Defendants' compliance with both the terms of the proposed Final
Judgment and U.S. federal antitrust law generally, across their entire
poultry businesses; and
c. provide significant and meaningful restitution to the poultry
processing workers harmed by their anticompetitive conduct, who should
have received competitive compensation for their valuable, difficult,
and dangerous labor.
The proposed Final Judgment for the Settling Defendants also
prohibits them from retaliating against any employee or third party for
disclosing information to the monitor, an antitrust enforcement agency,
or a legislature, and includes other terms discussed below.
The term of the proposed Final Judgment reflects the significant
and voluntary cooperation that Settling Defendants provided in the
United States' investigation into the conduct described in the
Complaint, for which the United States is grateful.
The Stipulation and Order for the Settling Defendants requires them
to abide by and comply with the provisions of the proposed Final
Judgment until it is entered by the Court or until the time for all
appeals of any Court ruling declining entry of the proposed Final
Judgment has expired.
The United States has stipulated with the Settling Defendants that
the proposed Final Judgment may be entered after compliance with the
Tunney Act. Entry of the proposed Final Judgment will terminate this
action as to the Settling Defendants, except that the Court will retain
jurisdiction to construe, modify, or enforce the provisions of the
proposed Final Judgment and to punish violations thereof.
II. Description of Events Giving Rise to the Alleged Violation
A. The Settling Defendants' Anticompetitive Agreement To Collaborate on
Compensation, Including Through Their Anticompetitive Exchange of
Compensation Information
The Amended Complaint alleges that the Settling Defendants agreed
to collaborate with and assist each other and their co-conspirators in
making decisions about wages and benefits for their poultry processing
plant workers, exchanged competitively sensitive information, and
facilitated the exchange of each other's competitively sensitive
information. This agreement includes over a decade of discussions about
current and future compensation plans and exchanges of compensation
information between and among the Settling Defendants and their co-
conspirators, who collectively held market power over local and the
nationwide markets for poultry plant workers. This conspiracy, while
including detailed exchanges of information about current and future
wage and benefit policies and amounts, went well beyond the sharing of
information and included individual processor-to-processor consultation
and advice-giving on decisions that were competitively sensitive and
should have been made independently.
From 2005 or earlier to the present, the Settling Defendants and
their co-conspirators collaborated on compensation decisions, including
by discussing, giving advice, and sharing with each other their
competitively sensitive compensation information--rather than each
individual firm making its own decisions regarding poultry processing
plant worker compensation. This collaboration related to compensation
topics such as current wages and benefits, planned and contemplated
future wage raises, and changes to benefits, at a nationwide level, at
a regional level, and at the individual plant or individual job
category level. The Settling Defendants and their co-conspirators
engaged in such collaborations via correspondence and at annual in-
person meetings, at which they explicitly discussed poultry processing
plant worker compensation, and to which they brought competitively
sensitive compensation information.
As part of their collaboration, the Settling Defendants and their
co-conspirators exchanged confidential, current and future,
disaggregated, and identifiable compensation information related to
poultry processing workers with each other, both directly and
[[Page 34059]]
through facilitation by data consultant co-conspirators, from at least
2005 to the present. Their exchange of information through these
consultants included an annual survey designed and controlled by the
Settling Defendants and their co-conspirators. The survey compiled and
disseminated information to competitors about current compensation and
planned or contemplated changes in plant worker wages and salaries. The
survey reported compensation and benefits data for standardized job
categories at the Settling Defendants' and their co-conspirators'
individual processing plants.
From their information exchanges, the Settling Defendants knew how,
and how much, their competitors were compensating their poultry
processing plant workers at both a nationwide and a local level.
B. The Competitive Effects of the Conduct
The Amended Complaint alleges that the Settling Defendants' and
their co-conspirators' agreement to collaborate on compensation
decisions, including through the anticompetitive exchange of
compensation information, distorted the competitive mechanism of local
and nationwide markets for poultry processing plant labor. By doing so,
this conspiracy harmed a generation of poultry processing plant workers
by artificially suppressing their wages and benefits for decades.
Poultry processors are distinguishable from other kinds of
employers from the perspective of poultry processing plant workers.
Many poultry processing plant jobs are dangerous and require physical
stamina and tolerance of unpleasant conditions. Poultry processing
workers also develop common skills or industry-specific knowledge in
poultry processing work, making such workers most valuable to other
poultry processing plants. Additionally, many poultry processing plant
workers face constraints that reduce the number of jobs and employers
available to them, limiting the number of competitors for their labor.
For example, workers who cannot speak, read, or write English or
Spanish can still perform poultry processing plant line work.
Similarly, workers with criminal records, probation status, or lack of
high school or college education are often able to work at poultry
processing plants even when other jobs are not available to them.
Finally, many poultry processing plants are located in rural areas, in
which workers often have fewer job alternatives--especially for full-
time, year-round work--as compared to workers in other areas. Thus,
other jobs are not reasonable substitutes for poultry processing plant
jobs.
In local poultry processing labor markets, defined by the commuting
distance between workers' homes and poultry processing plants, the
Settling Defendants and their co-conspirators control more than 80% of
poultry processing jobs--and in some areas, likely 100%--and thus
collectively have market power in those local markets. The Settling
Defendants and their co-conspirators also together control over 90% of
poultry processing jobs nationwide, giving them market power in the
nationwide labor market for poultry processing plant work.
The Settling Defendants' agreement to collaborate on compensation
decisions and accompanying exchange of information related to
compensation, which was anticompetitive even standing alone, distorted
the normal wage-setting and benefits-setting mechanisms in the
processor plant worker labor market, thereby harming the competitive
process. Because the collaboration and the shared compensation
information facilitated by the consultant co-conspirators allowed the
Settling Defendants and their co-conspirators to understand more
precisely what their competitors were paying, or were planning to pay,
for processing plant worker compensation, they were able to pay less
compensation than they otherwise would have in a competitive labor
market. In contrast, the Settling Defendants' workers lacked any
comparable information, a clear asymmetry in the market.
In sum, the Settling Defendants' anticompetitive agreement to
collaborate on compensation decisions, exchange of compensation
information, and facilitation of such (alongside the facilitation of
this conduct by the consultant co-conspirators) suppressed compensation
in the local submarkets and the nationwide market for poultry
processing plant workers to the detriment of hundreds of thousands of
processing plant workers, who were financially harmed by such conduct.
III. Explanation of the Proposed Final Judgment
The relief required by the proposed Final Judgments will remedy the
harm to competition alleged in the Amended Complaint.
A. Prohibited Conduct
Section IV of the Final Judgment prevents the Settling Defendants
from continuing their collaboration and information-sharing with
competing poultry processors about poultry processing worker
compensation. Paragraphs IV.A and B prohibit Settling Defendants'
employees in management positions or any positions related to
compensation from directly or indirectly participating in meetings or
gatherings related to compensation for poultry processing workers,
communicating with any poultry processor about competitively sensitive
information related to poultry processing compensation, or facilitating
or encouraging such communications; entering into, attempting to enter
into, maintaining, or enforcing any agreement with any poultry
processor about compensation for poultry processing workers; or using
any such information about another poultry processor's compensation for
poultry processing workers. Accordingly, under the proposed Final
Judgment, the Settling Defendants may not collaborate on wages and
benefits for their workers or share confidential wage and benefit
information with any poultry processor not owned or operated by
Settling Defendants, and may not provide confidential wage and benefit
information to any consultants that produce reports regarding
compensation for poultry processing workers, among other prohibited
activities.
To ensure that poultry plant workers and third parties are not
punished by the Settling Defendants for raising antitrust or other
concerns, Paragraph IV.D. of the proposed Final Judgment prohibits the
Settling Defendants from retaliating against any employee or third
party for disclosing information to the monitor, a government antitrust
agency, or a government legislature.
B. Monitor
Section VI of the proposed Final Judgment provides that the Court
will appoint a monitor, selected by the United States in its sole
discretion, who will have the power and authority to investigate and
report on the Settling Defendants' compliance with the terms of the
Final Judgment and the Stipulation and Order. In addition, the monitor
will have the power and authority to investigate and report on the
Settling Defendants' compliance with the U.S. federal antitrust laws.
When investigating and reporting on the Settling Defendants' compliance
with the U.S. federal antitrust laws, the monitor may examine all
aspects of the Settling Defendants' poultry businesses, including
poultry processing, poultry processing workers, growers, integrated
poultry feed, hatcheries, transportation of poultry and poultry
products, and the sale of poultry and poultry processing products.
[[Page 34060]]
The monitor will not have any responsibility or obligation for the
operation of the Settling Defendants' businesses. The monitor will
serve at the Settling Defendants' expense, on such terms and conditions
as the United States approves in its sole discretion. The monitor will
have the authority to take reasonable steps as, in the United States'
view, may be necessary to accomplish the monitor's duties and the
Settling Defendants must assist the monitor. The monitor will provide
periodic reports to the United States and will serve for a term of up
to seven years.
C. Restitution
The Settling Defendants have inflicted financial harm on the
hundreds of thousands of poultry plant workers who have labored for
them and their co-conspirators during the term of the conspiracy
alleged in the Amended Complaint. These workers perform jobs that are
physically demanding, involve high risk of injury, and require
tolerance of unpleasant working conditions, in exchange for wages and
benefits from the Settling Defendants and their co-conspirators.
Because of the conspiracy, those wages and benefits were likely less
than they would have been in a free and competitive labor market. For
this reason, Section X of the proposed Final Judgment includes a
requirement that the Settling Defendants pay restitution to workers
harmed by the Settling Defendants' conduct.
The Settling Defendants may satisfy the restitution requirement in
the proposed Final Judgment in one of two ways. In an ongoing private
antitrust suit brought by a class of nationwide poultry processing
workers in this Court, Jien v. Perdue Farms, Inc., No. 1:19-cv-2521 (D.
Md.), which involves allegations and claims similar to those in the
United States' Amended Complaint, the Settling Defendants negotiated a
settlement with the plaintiff class for $5.8 million. If the Jien Court
grants final approval to the Settling Defendants' Jien settlement, the
disbursement process approved by the Jien Court of the Jien settlements
satisfies the Settling Defendants' restitution obligation under Section
X of the proposed Final Judgment.
Section X of the proposed Final Judgment also sets forth an
alternative method by which the Settling Defendants may satisfy their
restitution obligations. Under Paragraph X.A. of the proposed Final
Judgment, the Settling Defendants must create an escrow account and
contribute to that account 10% of the amount of their Jien settlement.
Under Paragraphs X.C. and X.D. of the proposed Final Judgment, should
the Jien Court not grant final approval of the Settling Defendants'
Jien settlement, the Settling Defendants must transfer to that escrow
account the entire amount of their Jien settlement, so that the account
would contain the full Jien settlement amount plus the 10% initially
required. The United States would then disburse this fund, minus the
cost of administration, to the poultry processing plant workers.
D. Required Conduct, Compliance, and Inspection
The proposed Final Judgment sets forth various provisions to ensure
the Settling Defendants' compliance with the proposed Final Judgment.
Paragraph VII.A. of the proposed Final Judgment requires the
Settling Defendants to appoint an Antitrust Compliance Officer within
10 days of the Final Judgment's entry. Under Paragraph VII.C. of the
proposed Final Judgment, the Antitrust Compliance Officer must furnish
copies of this Competitive Impact Statement, the Final Judgment, and a
notice approved by the United States explaining the obligations of the
Final Judgment to the Settling Defendants' management and all employees
responsible for evaluating or setting compensation for poultry
processing workers, among others. The Antitrust Compliance Officer must
also obtain from each recipient a certification that he or she has read
and agreed to abide by the terms of the Final Judgment, and must
maintain a record of all certifications received. Recipients must also
certify that they are not aware of any violation of the Final Judgment
or any violation of federal antitrust law. Additionally, the Antitrust
Compliance Officer must annually brief each person required to receive
a copy of the Amended Complaint, Final Judgment and this Competitive
Impact Statement on the meaning and requirements of the Final Judgment
and the antitrust laws. The Antitrust Compliance Officer must also
annually communicate to all employees that any employee may disclose,
without reprisal, information concerning any potential violation of the
Final Judgment or the antitrust laws.
Paragraph VII.D. of the proposed Final Judgment imposes similar
notice provisions on the Settling Defendants to ensure that any poultry
processor or consulting firm they contract with related to poultry
processing compensation also has notice of the Amended Complaint, Final
Judgment, and Competitive Impact Statement.
E. Other Provisions
For a period of seven years following the date of entry of the
Final Judgment, the Settling Defendants must certify annually to the
United States that they have complied with the provisions of the Final
Judgment. Additionally, upon learning of any violation or potential
violation of the terms and conditions of the Final Judgment, the
Settling Defendants, within 30 days, must file with the United States a
statement describing the violation or potential violation, and must
promptly terminate or modify the activity.
The proposed Final Judgment requires the Settling Defendants to
provide full, truthful, and continuing cooperation to the United States
in any investigation or litigation relating to the sharing of
compensation information among poultry processors in violation of
Section 1 of the Sherman Act, as amended, 15 U.S.C. 1. This cooperation
provision requires the Settling Defendants to use their best efforts to
effectuate interviews, depositions, and sworn testimony with their
current and former employees, officers, directors, and agents and to
produce documents, data, and information upon request. The Settling
Defendants' obligation to cooperate lasts for the full term of the
proposed Final Judgment or until the conclusion of all investigations
and litigations, including appeals, related to sharing poultry
processing worker compensation information. Subject to this full,
truthful, and continuing cooperation, the Settling Defendants are
discharged from any civil or criminal claim by the United States
arising from the sharing of compensation information among poultry
processors, provided that the information-sharing occurred before the
date of the filing of the Amended Complaint and does not include an
agreement to fix prices or wages or to divide or allocate markets.
To ensure compliance with the Final Judgment, the proposed Final
Judgment requires the Settling Defendants to grant the United States
access, upon reasonable notice, to the Settling Defendants' records and
documents relating to matters contained in the Final Judgment. Upon
request, the Settling Defendants must also make their employees
available for interviews or depositions, answer interrogatories, and
prepare written reports relating to matters contained in the Final
Judgment.
The proposed Final Judgment also contains provisions designed to
make enforcement of the Final Judgment as effective as possible. The
proposed Final Judgment provides that the United
[[Page 34061]]
States retains and reserves all rights to enforce the Final Judgment,
including the right to seek an order of contempt from the Court. Under
the terms of these provisions, the Settling Defendants have agreed that
in any civil contempt action, any motion to show cause, or any similar
action brought by the United States regarding an alleged violation of
the Final Judgment, the United States may establish the violation and
the appropriateness of any remedy by a preponderance of the evidence
and that the Settling Defendants have waived any argument that a
different standard of proof should apply. This provision aligns the
standard for compliance with the Final Judgment with the standard of
proof that applies to the underlying offense that the Final Judgment
addresses.
The proposed Final Judgment contains provisions that clarify its
interpretation. The proposed Final Judgment is intended to remedy the
loss of competition the United States alleges occurred because of the
Settling Defendants' conduct. The Settling Defendants agree that they
will abide by the proposed Final Judgment and that they may be held in
contempt of the Court for failing to comply with any provision of the
proposed Final Judgment that is stated specifically and in reasonable
detail, as interpreted in light of this procompetitive purpose.
The proposed Final Judgment provides that if the Court finds in an
enforcement proceeding that a Settling Defendant has violated the Final
Judgment, the United States may apply to the Court for an extension of
the Final Judgment, together with such other relief as may be
appropriate. In addition, to compensate American taxpayers for any
costs associated with investigating and enforcing violations of the
Final Judgment, in any successful effort by the United States to
enforce the Final Judgment against a Settling Defendant, whether
litigated or resolved before litigation, the Settling Defendant must
reimburse the United States for attorneys' fees, experts' fees, and
other costs incurred in connection with that effort to enforce this
Final Judgment, including the investigation of the potential violation.
The proposed Final Judgment states that the United States may file
an action against a Settling Defendant for violating the Final Judgment
for up to four years after the Final Judgment has expired or been
terminated. This provision is meant to address circumstances such as
when evidence that a violation of the Final Judgment occurred during
the term of the Final Judgment is not discovered until after the Final
Judgment has expired or been terminated or when there is not sufficient
time for the United States to complete an investigation of an alleged
violation until after the Final Judgment has expired or been
terminated. This provision, therefore, makes clear that, for four years
after the Final Judgment has expired or been terminated, the United
States may still challenge a violation that occurred during the term of
the Final Judgment.
Finally, the proposed Final Judgment provides that it will expire
seven years from the date of its entry, except that after three years
from the date of its entry, the Final Judgment may be terminated upon
notice by the United States to the Court and the Settling Defendants
that continuation of the Final Judgment is no longer necessary or in
the public interest.
This length of term reflects important cooperation by the Settling
Defendants with the United States' investigation and litigation.
Settling Defendants provided significant documents and information to
the United States over a lengthy period and on a voluntary basis, which
advanced the investigation in meaningful ways. The United States is
grateful for this cooperation.
IV. Remedies Available to Potential Private Plaintiffs
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment neither impairs
nor assists the bringing of any private antitrust damage action. Under
the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the
proposed Final Judgment has no prima facie effect in any subsequent
private lawsuit that may be brought against the Settling Defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States and Settling Defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the Tunney Act, provided that the United States
has not withdrawn its consent. The Tunney Act conditions entry upon the
Court's determination that the proposed Final Judgment is in the public
interest.
The Tunney Act provides a period of at least 60 days preceding the
effective date of a proposed Final Judgment within which any person may
submit to the United States written comments regarding the proposed
Final Judgment. Any person who wishes to comment on the proposed Final
Judgment should do so within 60 days of the date of publication of this
Competitive Impact Statement in the Federal Register, or the last date
of publication in a newspaper of the summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the U.S. Department of Justice, which remains
free to withdraw its consent to the proposed Final Judgment at any time
before the Court's entry of the Final Judgment. The comments and the
response of the United States will be filed with the Court. In
addition, the comments and the United States' responses will be
published in the Federal Register unless the Court agrees that the
United States instead may publish them on the U.S. Department of
Justice, Antitrust Division's internet website.
Written comments should be submitted in English to: Chief, Civil
Conduct Task Force, Antitrust Division, United States Department of
Justice, 450 Fifth St. NW, Suite 8600, Washington, DC 20530,
[email protected].
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
As an alternative to the proposed Final Judgment, the United States
considered a full trial on the merits against the Settling Defendants.
The United States could have commenced contested litigation and brought
the case to trial, seeking relief including an injunction against the
collaboration on compensation decisions, sharing of compensation
information, and facilitation of this conduct, as well as the
imposition of a monitor. The United States is satisfied, however, that
the relief required by the proposed Final Judgment will remedy the
anticompetitive effects alleged in the Amended Complaint against the
Settling Defendants, preserving competition in the poultry processing
plant labor markets and in the poultry processing industry at large,
given the relief secured, including the poultry-business-wide monitor.
Thus, the proposed Final Judgment achieves all or substantially all of
the relief the United States would
[[Page 34062]]
have obtained through litigation against the Settling Defendants but
avoids the time, expense, and uncertainty of a full trial on the
merits.
VII. Standard of Review Under The Tunney Act for the Proposed Final
Judgment
Under the Clayton Act and Tunney Act, proposed Final Judgments, or
``consent decrees,'' in antitrust cases brought by the United States
are subject to a 60-day comment period, after which the Court must
determine whether entry of a proposed Final Judgment ``is in the public
interest.'' 15 U.S.C. 16(e)(1). In making that determination, the
Court, in accordance with the statute as amended in 2004, is required
to consider:
(A) the competitive impact of such judgment, including termination
of alleged violations, provisions for enforcement and modification,
duration of relief sought, anticipated effects of alternative remedies
actually considered, whether its terms are ambiguous, and any other
competitive considerations bearing upon the adequacy of such judgment
that the court deems necessary to a determination of whether the
consent judgment is in the public interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and individuals
alleging specific injury from the violations set forth in the complaint
including consideration of the public benefit, if any, to be derived
from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory
factors, the Court's inquiry is necessarily a limited one as the
government is entitled to ``broad discretion to settle with the
defendant within the reaches of the public interest.'' United States v.
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v.
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014)
(explaining that the ``court's inquiry is limited'' in Tunney Act
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009
U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a
court's review of a proposed Final Judgment is limited and only
inquires ``into whether the government's determination that the
proposed remedies will cure the antitrust violations alleged in the
complaint was reasonable, and whether the mechanisms to enforce the
final judgment are clear and manageable'').
As the U.S. Court of Appeals for the District of Columbia Circuit
has held, under the Tunney Act, a court considers, among other things,
the relationship between the remedy secured and the specific
allegations in the government's complaint, whether a proposed Final
Judgment is sufficiently clear, whether its enforcement mechanisms are
sufficient, and whether it may positively harm third parties. See
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the
relief secured by a proposed Final Judgment, a court may not ``make de
novo determination of facts and issues.'' United States v. W. Elec.
Co., 993 F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted);
see also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc.,
152 F. Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107
F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787,
at *3. Instead, ``[t]he balancing of competing social and political
interests affected by a proposed antitrust decree must be left, in the
first instance, to the discretion of the Attorney General.'' W. Elec.
Co., 993 F.2d at 1577 (quotation marks omitted). ``The court should
also bear in mind the flexibility of the public interest inquiry: the
court's function is not to determine whether the resulting array of
rights and liabilities is the one that will best serve society, but
only to confirm that the resulting settlement is within the reaches of
the public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding
requirements would ``have enormous practical consequences for the
government's ability to negotiate future settlements,'' contrary to
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was
not intended to create a disincentive to the use of the consent
decree.'' Id.
The United States' predictions about the efficacy of the remedy are
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at
1461 (recognizing courts should give ``due respect to the Justice
Department's . . . view of the nature of its case''); United States v.
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In
evaluating objections to settlement agreements under the Tunney Act, a
court must be mindful that [t]he government need not prove that the
settlements will perfectly remedy the alleged antitrust harms[;] it
need only provide a factual basis for concluding that the settlements
are reasonably adequate remedies for the alleged harms.'' (internal
citations omitted)); United States v. Republic Servs., Inc., 723 F.
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to
which the government's proposed remedy is accorded''); United States v.
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
district court must accord due respect to the government's prediction
as to the effect of proposed remedies, its perception of the market
structure, and its view of the nature of the case.''). The ultimate
question is whether ``the remedies [obtained by the Final Judgment are]
so inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.' '' Microsoft, 56 F.3d at 1461
(quoting W. Elec. Co., 900 F.2d at 309).
Moreover, the Court's role under the Tunney Act is limited to
reviewing the remedy in relationship to the violations that the United
States has alleged in its Amended Complaint, and does not authorize the
Court to ``construct [its] own hypothetical case and then evaluate the
decree against that case.'' Microsoft, 56 F.3d at 1459; see also U.S.
Airways, 38 F. Supp. 3d at 75 (noting that the court must simply
determine whether there is a factual foundation for the government's
decisions such that its conclusions regarding the proposed settlements
are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he
`public interest' is not to be measured by comparing the violations
alleged in the complaint against those the court believes could have,
or even should have, been alleged''). Because the ``court's authority
to review the decree depends entirely on the government's exercising
its prosecutorial discretion by bringing a case in the first place,''
it follows that ``the court is only authorized to review the decree
itself,'' and not to ``effectively redraft the complaint'' to inquire
into other matters that the United States did not pursue. Microsoft, 56
F.3d at 1459-60.
In its 2004 amendments to the Tunney Act, Congress made clear its
intent to preserve the practical benefits of using judgments proposed
by the United States in antitrust enforcement, Public Law 108-237 Sec.
221, and added the unambiguous instruction that ``[n]othing in this
section shall be construed to require the court to conduct an
evidentiary hearing or to require the court to permit anyone to
intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d
at 76 (indicating that a court is not required to hold an evidentiary
hearing or to permit intervenors as part of its review under the Tunney
Act). This language explicitly wrote into the statute what Congress
intended when it first enacted the Tunney Act in 1974. As Senator
Tunney explained: ``[t]he court is nowhere compelled to go to trial or
to
[[Page 34063]]
engage in extended proceedings which might have the effect of vitiating
the benefits of prompt and less costly settlement through the consent
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Sen.
Tunney). ``A court can make its public interest determination based on
the competitive impact statement and response to public comments
alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F.
Supp. 2d at 17).
Dated: May 17, 2023.
Respectfully submitted,
For Plaintiff United States of America
-----------------------------------------------------------------------
Kathleen Simpson Kiernan,
U.S. Department of Justice, Antitrust Division, Civil Conduct Task
Force, 450 Fifth Street NW, Suite 8600, Washington, DC 20530, Tel:
202-353-3100, Fax: 202-616-2441, Email: [email protected].
[FR Doc. 2023-11058 Filed 5-24-23; 8:45 am]
BILLING CODE 4410-11-P