Sept 9 (Askume) – Meat giants Cargill Inc, National Beef Packing Co and Hormel Foods Inc will pay a total of $57.4 million to withdraw from a proposed collective action that accused them of cutting the pay of processing plant workers, but agreed to a settlement.
Lawyers for the workers urged a U.S. judge in Colorado to give preliminary approval to all three deals , which would bring the total settlement to more than $200 million when the suit is filed in 2022.
The settlement covers claims by thousands of red meat processing workers at 140 plants who alleged a years-long conspiracy among major processors to keep wages low.
The workers claim the processors and two consulting firms violated anti-competition laws by sharing confidential payroll data through industry surveys and in other ways.
Under the new agreement, Cargill said it would pay $29.75 million, National Beef Packing agreed to pay $14.2 million and Hormel Foods would pay $13.5 million.
Cargill said in a statement that the settlement was reached “solely to avoid the cost and disruption of significant litigation.” The company added that it “independently sets wages to ensure that salaries at each of our facilities are fair and competitive.”
Hormel said in a statement that the settlement was reached “to avoid the uncertainty, risk, expense and disruption of continued litigation.”
National Beef did not immediately respond to a request for comment. Cargill, Hormel and the other settlement defendants deny any wrongdoing.
Lawyers for the plaintiffs declined to comment.
US District Judge Philip Brimmer refused to dismiss the suit last year.
In earlier agreements, Arkansas-based Tyson Foods said it would pay $72.25 million, while Brazil’s JBS, the world’s largest beef producer, agreed to pay $55 million. The two largest transactions so far are awaiting court approval.
The defendants in the settlement said they would cooperate with the plaintiffs in pursuit of related claims against Smithfield and several other companies, subpoenaing documents and making witnesses available for questioning that have not yet reached a settlement.
Smithfield declined to comment on Monday.
The workers’ lawyers told the court that “they would receive adequate guaranteed relief and would therefore benefit from pursuing proceedings in a smaller and more focused manner against the remaining defendants.”
He said they may collect legal fees from the settlement fund, but did not specify the scope or amount.
Lawyers leading the suit have reached a settlement of more than $200 million in federal court in Maryland , resolving similar claims from poultry workers that wages were artificially low.
The case is Ron Brown et al v. JBS USA Food Co. et al., U.S. District Court for the District of Colorado, No. 1:22-cv-02946-PAB-STV.
Plaintiffs are represented by: Shana Scarlett of Hagens Berman Sobol Shapiro; Brent Johnson of Cohen Milstein Sellers & Toll and George Farah of Handley Farah & Anderson;
National Beef: Michael Tubach of O’Melveny & Myers
Cargill: Jennifer Milici, Wilmer Cutler Pickering Hale & Dorr
Hormel: Jacob Bylund of Faegre Drinker Biddle & Reath
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