Hormel, National Beef Packing and Cargill latest to settle in wage-fixing lawsuit

Settlements totaling $200.2 million have been reached with multiple red meat processing companies in a lawsuit that alleged a years-long period of wage-fixing, according to attorneys at Hagens Berman.

The motion, filed Sept. 5, 2024, in the U.S. District Court for the District of Colorado, seeks preliminary approval of settlements reached with National Beef Packing Co. for $14.2 million, Cargill Meat Solutions Corp. for $29.75 million and Hormel Foods Corp. for $13.5 million. These are the seventh, eighth and ninth settlements reached in the case.

The class action brings claims of fraudulent concealment of violations of federal antitrust law the Sherman Act, and lays out the specific methods the 11 red meat processors allegedly used to fix wages to keep them lower than what the market would dictate.

“We look forward to the court’s preliminary approval of this settlement so that payments can begin to make their way to the class members who rightfully deserve this money,” said Shana Scarlett, partner at Hagens Berman. “Our antitrust team continues to diligently litigate against remaining defendants to secure meaningful recovery.”

Affected employees include those who have occupied various positions along processing lines, including slaughtering and aging, cutting and further processing, repairing processing machines and supervising processing lines.

Cargill said it denies any wrongdoing but chose to settle “only to avoid larger litigation costs and distractions from the critical work our production teams do, providing enough beef to feed 72 million people every single day.”

“We are grateful for our employees’ commitment, and we set their compensation independently to ensure fair pay and competitive wages in each of our plants,” the company added.

Hormel Foods also said it "strongly denies” liability and continues to deny the allegations in the plaintiffs’ complaint. However, the company said that while it believes it has valid defenses, it chose to settle to “avoid the uncertainty, risk expense and distraction of continued litigation.”

“Hormel Foods remains focused on its long-term strategic goals and continues to invest in, transform and grow its business,” it added.

Hagens Berman first filed the class action in 2022 against 18 named defendants: JBS USA Food Co., Tyson Foods Inc., Cargill, Hormel, Rochelle Foods LLC, American Foods Group LLC, Triumph Foods LLC, Seaboard Foods LLC, National Beef, Smithfield Foods Inc., Smithfield Packaged Meats Corp., Agri Beef Co., Washington Beef LLC, Purdue Farms Inc., Greater Omaha Packing Co. Inc., Nebraska Beef Ltd., Indiana Packers Corp., Quality Pork Processors Inc., as well as third-party data-sharing firms Agri Stats Inc. and Webber, Meng, Sahl and Co. Inc.

The class action states that since 2014, many of the processors allegedly conspired to fix and depress compensation paid to production and maintenance employees at meat processing plants in violation of federal law.

The complaint alleges various methods of collusion between the meat processing companies, including using third-party companies that intentionally operate under the public’s radar, conducting secret meetings that excluded parties not involved in the conspiracy, exchanging competitively sensitive compensation data through a non-public, proprietary system and more.

The lawsuit parallels the firm’s wage-fixing lawsuit pertaining to workers in the U.S. poultry processing industry.

Prior settlements include $72.5 million with Tyson, $55 million with JBS, $4 million with American Foods, $10 million with Seaboard Foods and $1.25 million with Perdue. The firm continues to litigate against seven remaining defendants, and three motions for preliminary approval remain pending before the court with defendants Tyson, JBS and American Foods.