National Beef Settles Wage-Fixing Case

July 30, 2024

National Beef Packing Company is the latest food company to announce a settlement in an ongoing wage-fixing lawsuit, according to a notice filed in federal court Monday.

The terms of the settlement have yet to be released as part of an ongoing lawsuit that alleged a group of food companies conducted "secret" compensation surveys and held "secret" annual meetings that included executives from the companies, as part of an alleged scheme to "depress and fix" employee wages.

"Plaintiffs and defendant National Beef Packing Co., LLC, respectfully write to the court to provide notice that class plaintiffs have reached agreement with National Beef to settle all claims against it," the parties said in a noticed filed in the U.S. District Court for the District of Colorado. "The proposed settlement is subject to the court's approval. Plaintiffs will move for preliminary approval of the settlement agreement in the near future."

Details of the proposed settlement are expected to be filed with the court, according to the notice.

In June 2024, American Foods Group reached a $4 million settlement with plaintiffs. According to that settlement American Foods "denies all allegations of wrongdoing."

Seven companies have yet to file dismissal motions or announce settlements including Cargill Inc.; Cargill Meat Solutions Corp.; Hormel Foods Corp.; Iowa Premium LLC; Agri Stats Inc.; Webber, Meng, Sahl and Company Inc.; and WMS and Company Inc.

The court is considering nine motions to dismiss the case filed by Agri Beef Co., Washington Beef LLC, Quality Pork Processors Inc., Rochelle Foods LLC, Indiana Packers Corporation, Greater Omaha Packing Co. Inc., Smithfield Foods Inc., Smithfield Packaged Meats Corp. and Nebraska Beef Ltd.

The original lawsuit alleged that since at least 2014, the companies "conspired and combined to fix and depress" compensation to employees at about 140 red-meat processing plants across the country, in violation of the Sherman Antitrust Act. The companies named in the lawsuit produce about 80% of all red meat sold to U.S. consumers.

The lawsuit said senior executives at the companies established and approved hourly wage rates, annual salaries and employment benefits.

The complaint said the companies conducted "secret" compensation surveys and held "secret" annual meetings that included executives from the companies named in the lawsuit.

The lawsuit alleges the companies were in direct communication with senior executives who "extensively discussed, compared, and in turn, further suppressed compensation through email and phone communications."

The employees said the companies entered into no-poach agreements, preventing the companies from recruiting the other companies' employees.

Source: DTN