Hormel Foods, Rochelle Foods and Quality Pork Processors have agreed to a settlement of $13 million over wage claims. This action follows the capitulation of Tyson Foods and JBS USA, respectively paying $72 million and $55 million as settlement to a class of workers claiming underpayment of wages. The allegations arose from disclosures that the defendant companies apparently colluded in setting wage rates based on claimed in-person meetings and indirectly through participation in the AgriStats benchmark costing system. All companies that have settled deny wrongdoing. Hormel Foods, in a statement, noted that the settlement was negotiated “to avoid the uncertainty, risk, expense and distraction of continued litigation”.
Lawsuits alleging collusion to establish wage rates for plant workers or in separate cases, compensation paid to contractors appear to have as a common basis subscription to AgriStats. Irrespective of the benefits from comparing costs and efficiency factors, it would appear that the service has emerged as a very expensive component of management of livestock operations confirming the Law of Unintended Consequences.