Morris v. Tyson filed in 2015 was the subject of a hearing before Judge Joseph H. McKinley Jr. of the Western District of Kentucky. Judge McKinley dismissed the breach of the implied covenant and fraud claims against Tyson Foods. He allowed the case to continue with respect to alleged violations of the Packers’ and Stockyards Act and breach of contract. In his ruling, Judge McKinley noted, “There is evidence that Tyson operated in an anti-competitive manner that could represent a violation of the Packers’ and Stockyards Act”.
The case arises from allegations raised by growers supplying the Robards, KY. complex. The plaintiffs commissioned Dr. Kyle Stiegert of the Department of Agricultural and Applied Economics at the University of Wisconsin, Madison to calculate damages as a result of allegedly anti-competitive practices.
Contractors growing for complexes that are geographically separated from complexes operated by other integrator are in a difficult position since they effectively only have one potential source of income and must depend on the good intentions of the integrator. The establishment of the Lincoln Premium Poultry complex in Fremont, NE is an obvious example but the Costco supply enterprise has had no problem attracting growers. Tyson Foods has operated a complex in Obion County, TN. for a number of decades and has expanded the complex successively over the years bringing in more contractors thereby benefitting the County. In areas where contractors can affiliate with more than one integrator, there is the possibility of “non-poach” agreements although this would be regarded as anti-competitive and a violation of the Packers’ and Stockyards Act.
The larger broiler integrators have clearly defined conditions of association in their contracts, and they operate with input from grower committees. The fact that there are waiting lists for contractors in many areas attests to the equity of the system that has created the most efficient and mutually beneficial system of broiler production in the world that benefits row-crop farmers, contractors, allied suppliers, integrators and consumers.