Chicken plants conspired to keep wages low at Southern plants, federal lawsuit alleges

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Spc. Daniel Schneider, U.S. Army

A worker handles a chicken at a poultry processing facility.

Some of the nation’s largest poultry processing companies, including several with plants in Mississippi, have for a decade conspired to tamp down workers’ wages at their primarily southeastern facilities, alleges a federal lawsuit filed last week in Maryland.

The Aug. 30 complaint names nearly 20 chicken processing companies, including Mississippi-based Sanderson Farms and two processors, Koch Foods and Peco Foods, whose Mississippi plants were targeted in immigration enforcement raids in August. Tyson Foods, which operates in Mississippi, was also included in the suit.

(Editor’s note: Joe Sanderson, the chief executive officer of Sanderson Farms, and his wife, Kathy, have donated to Mississippi Today.)

Beginning in 2009, executives and human resource officials at these companies conducted “off the books” meetings at a Destin, Florida, resort to discuss and set “artificially depressed” wages for their employees, the lawsuit alleges.

The plants offer some of the country’s most dangerous and lowest-paying jobs and process more than 90 percent of chicken products in the U.S.

Attorneys in multiple states filed the class action complaint in Maryland, the corporate headquarters of chicken giant Perdue, on behalf of three Arkansas plant workers whose job involves removing bones from chicken carcasses.

The defendants have not filed their response to the suit.

Along with closed-door meetings, the lawsuit alleges that managers of the poultry plants exchanged wage and benefit data with their competitors, then provided the information to company executives “who used the data to facilitate the fixing of compensation.” The companies also subscribed to industry analytics services Agri Stats and WMS to exchange similar information for the same purpose, the lawsuit alleges.

The plaintiffs commissioned an economic analysis that revealed pay at non-poultry food processing plants was higher and increased more rapidly than pay at the poultry plants, according to the lawsuit.

Mississippi’s 6,540 meat, poultry and fish cutters and trimmers make an average wage of $12.27 an hour, more than the average hourly pay for that job in Louisiana ($10.09), Alabama ($10.90) and Tennessee ($12.14), but less than in Arkansas ($12.58) and Texas ($12.86), according to Bureau of Labor Statistics.

Mississippi-based Sanderson Farms is among the defendants, but did not respond to a request to comment on this story. Previously, Sanderson Farms executives have boasted about the company’s above-industry-average wages.

“We’ve got the best workforce in the industry, I think,” Mike Cockrell, chief financial officer of the publicly traded, Laurel-based company, said in an interview with Mississippi Today earlier in August. “These people, they work their tails off. It’s hard work. They get up every morning and get their kids ready for school and show up at 5:12 (am) when we start running the plant. I have a tremendous amount of respect for them and I’m proud of them.”

Cockrell said Sanderson Farms, which was not targeted in recent immigration raids, pays its employees an entry wage of $15-an-hour, more than double the minimum wage, after they’ve been with the company 90 days.

“We raise our rates every year; that rate’s been in effect since June the 2nd,” Cockrell said. “We also pay 75 percent of their health insurance for both the employee and their family and have a generous retirement plan for them and dental insurance. It’s a really good package particularly for unskilled labor, which is what we use primarily.

Mississippi Poultry Association President Mark Leggett and the corporate offices of Koch, Peco and Tyson did not return calls to Mississippi Today Wednesday.

Mississippi produces roughly 750 million broiler chickens each year, making it the nation’s fifth largest chicken producing state. The state’s poultry industry, employing 25,000 people and generating more than $18 billion in economic activity, according to a Mississippi State University publication, makes up the greatest share of Mississippi’s agriculture economy.

Meat cutters and trimmers also accounted for the greatest number of job openings, 1,964, on the state job board, Mississippi Works, on July 1, 2019 — some of which paid as little as $7.25 an hour.

The allegations in the lawsuit echo claims long held by labor-rights experts who note that poultry processing facilities have a long history of beefing up their bottom lines, sometimes at the expense of improving working conditions and wages.

“The poultry industry is looking to cut labor costs at any possible corner to maximize profit,” said Angela Stuesse, a professor at University of North Carolina and author of “Scratching out a Living: Latinos, Race, and Work in the Deep South.” She added: “Those cuts are always on the backs of the people doing the hard work.”

In the mid-1990’s, Mississippi’s poultry plants began actively recruiting immigrant workers — called the “Hispanic Project” — in order to circumvent increased labor organizing in the plants’ mostly African American workforce.

“It’s an industry that targets the most vulnerable group of workers and brings them in,” said Debbie Berkowitz, former senior policy adviser for the U.S. Occupational Safety and Health Administration, as recorded in a 2017 New Yorker article and quoted in the lawsuit. “And when one group gets too powerful and stands up for their rights, they figure out who’s even more vulnerable and move them in.”

The Hispanic Project caught the attention of industry leaders and other food processing companies, Stuesse said, who reached out to the architects to find out how to replicate the practice.

Stuesse said the meetings described in the lawsuit are reminiscent of these earlier collaborations, in which poultry companies shared knowledge and compared notes on how to boost their bottom lines.

According to the lawsuit, company executives met to discuss worker compensation at the Hilton Sandestin Resort Hotel & Spa in Destin, Florida around the same time as the U.S. Poultry & Egg Association’s annual Human Resource Seminar, but the meetings were not recorded on the association schedule.

The Mississippi Poultry Association also holds its annual convention at the Hilton Sandestin Resort in Destin, where lobbyist Leggett has purchased hotel rooms and seafood dinners for Mississippi officials since at least 2009.