December 1, 2022

Volume XII, Number 335

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Poultry Processors Settle with Department of Justice Over Wage Information Exchanges

This summer the US Department of Justice settled with three poultry processors, Cargill Meat Solutions Corp., Sanderson Farms, Inc., and Wayne Farms, LLC. (U.S. v. Cargill Meat Solutions Corp. et al, 1:22-cv-01821 (D. Md. 2022)). The antitrust case focused on “long-running conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborate with their competitors on compensation decisions.”

The eyepopping $85 million settlement captured headlines, but this case is more than a cautionary tale about unlawful wage fixing. 

Cargill serves as a reminder and a warning for all employers about how to use compensation research or other analyses of employee data. In this case, the processors allegedly shared confidential employee wage and benefit information to make industry-wide decisions about compensation for their workers. They also, according to the DOJ, engaged consulting firms to collect and circulate disaggregated identifiable data, including employee wage information.

While it is common and legal to conduct market research and benchmark compensation, disclosure of employee data could create risk for the employer under a variety of privacy laws. These might include allegations that the information is being used deceptively or unfairly, actionable under unfair and deceptive trade practice laws. Or, it could result in alleged violations under newer state comprehensive privacy laws. For example, California’s CCPA require employers to provide notice to employees at the time of data collection. That notice needs to explain the reason for collection of the data and the scope of use. State privacy laws prohibit employers from collecting data for one stated purpose and using it for another. For example, collecting personal data to process payroll and then sharing it with a third party for industry-wide compensation research.

Putting It Into Practice: Cargill serves as a reminder for employers to properly train their HR team on privacy law requirements and ensuring that privacy notices are an accurate and up-to-date reflection of current practices.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 271
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About this Author

Morgan Forsey, Labor and Employment Attorney, Sheppard Mullin Law Firm
Associate

Morgan Forsey is an associate in the Labor and Employment Practice Group in the firm's San Francisco office.

Areas of Practice

Ms. Forsey handles all facets of the litigation process in labor and employment disputes.  Ms. Forsey has significant experience in defending wage and hour class actions, including claims for overtime pay, meal and rest period violations, misclassification claims, prevailing wages and claims concerning premium pay issues.  She has successfully defeated class certification motions and prevailed...

415-774-3254
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