United States v. Cargill Meat Solutions Corp., et al.; Proposed Final Judgment and Competitive Impact Statement, 34030-34063 [2023-11058]

Download as PDF 34030 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices DEPARTMENT OF JUSTICE Antitrust Division lotter on DSK11XQN23PROD with NOTICES2 United States v. Cargill Meat Solutions Corp., et al.; Proposed Final Judgment and Competitive Impact Statement Notice is hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)–(h), that a proposed Final Judgment, Stipulation, and Competitive Impact Statement have been filed with the United States District Court for the District of Maryland in United States of America v. Cargill Meat Solutions Corp., et al., Civil Action No. 1:22–cv–01821. On July 25, 2022, the United States filed a Complaint against three poultry processors as well as a data consultant and its president to end a long-running conspiracy in the poultry processing industry. The Complaint alleged that poultry processors collectively employing more than 90 percent of all poultry processing plant workers in the United States conspired to collaborate with and assist their competitors in making decisions about worker compensation, including wages and benefits, and to exchange information about current and future compensation plans for their processing plant workers, in violation of section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint also alleged that data consultants facilitated the processors’ collaboration and compensation information exchanges in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. On May 17, 2023, the United States filed an Amended Complaint, which added settling defendants George’s, Inc. and George’s Foods, LLC (collectively ‘‘George’s’’), alleging that George’s and the conspirators participated in the conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborated with their competitors on compensation decisions. The proposed Final Judgment, filed at the same time as the Amended Complaint, requires George’s to cease its information-sharing and facilitation of such conduct. In addition, George’s is prohibited from sharing or facilitating the sharing of competitively sensitive information among competitors and is required to cooperate with the United States’ ongoing investigation. Additionally, under the terms of the proposed settlement with George’s, the court will appoint an external monitor to ensure compliance with the terms of the settlement and the antitrust laws. George’s will also pay restitution to affected poultry processing workers. VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 Copies of the Amended Complaint, proposed Final Judgment, and Competitive Impact Statement are available for inspection on the Antitrust Division’s website at https:// www.justice.gov/atr and at the Office of the Clerk of the United States District Court for the District of Maryland. Copies of these materials may be obtained from the Antitrust Division upon request and payment of the copying fee set by Department of Justice regulations. Public comment is invited within 60 days of the date of this notice. Such comments, including the name of the submitter, and responses thereto, will be posted on the Antitrust Division’s website, filed with the Court, and, under certain circumstances, published in the Federal Register. Comments should be submitted in English and directed to Chief, Civil Conduct Task Force, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 8600, Washington, DC 20530 (email address: ATRJudgmentCompliance@usdoj.gov). Suzanne Morris, Deputy Director Civil Enforcement Operations, Antitrust Division. United States District Court for the District of Maryland United States of America, 450 Fifth Street NW, Washington, DC 20530, Plaintiff; v. Cargill Meat Solutions Corporation, 825 East Douglas Avenue, 9th Floor, Wichita, KS 67202, Cargill, Inc., 15407 McGinty Road West, Wayzata, MN 55391, G. Jonathan Meng, 734 Wild Rose Road, Silverthorne, CO 80498, George’s, Inc., 402 West Robinson Avenue, Springdale, AR 72764, George’s Foods, LLC, 19992 Senedo Road, Edinburg, VA 22824, Sanderson-Wayne Farms, LLC, 4110 Continental Drive, Oakwood, GA 30566, Webber, Meng, Sahl and Company, Inc., d/b/a/WMS & Company, Inc., 1200 E High Street, Suite 104, Pottstown, PA 19464, Defendants. Civil Action No.: 22–cv–1821 (Gallagher, J.) Amended Complaint Americans consume more poultry than any other animal protein. Before poultry is prepared for consumption, it passes through a complex supply chain that includes hatcheries that hatch chicks from eggs; growers that raise poultry until the birds are ready for slaughter; and poultry processing plants where workers perform dangerous tasks under difficult conditions to slaughter and pack chickens and turkeys for distribution to consumers. Poultry processing plant workers deserve the benefits of free market competition for their labor. For at least two decades, however, poultry processors that employ more than 90 PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 percent of all poultry processing plant workers in the United States conspired to (i) collaborate with and assist their competitors in making decisions about worker compensation, including wages and benefits; (ii) exchange information about current and future compensation plans; and (iii) facilitate their collaboration and information exchanges through data consultants. This conspiracy distorted the normal bargaining and compensation-setting processes that would have existed in the relevant labor markets, and it harmed a generation of poultry processing plant workers by artificially suppressing their compensation. Poultry processors have also engaged in deceptive practices associated with the ‘‘tournament system.’’ Under this system, growers are penalized if they underperform other growers, but poultry processors control the key inputs (like chicks and seed) that often determine a grower’s success. Poultry processors often fail to disclose the information that growers would need to evaluate and manage their financial risk or compare offers from competing processors. To enjoin this unlawful conduct and seek other appropriate relief, the United States of America brings this civil action under Section 1 of the Sherman Act, 15 U.S.C. 1, and Section 202(a) of the Packers and Stockyards Act, 7 U.S.C. 192(a). Table of Contents I. Nature of the Action II. Jurisdiction and Venue III. Terms of Reference IV. Defendants A. Cargill B. Sanderson C. Wayne D. George’s E. WMS F. Jonathan Meng G. Co-Conspirators V. Factual Allegations A. Poultry Industry Background 1. Hatcheries and Growers 2. Poultry Processing Plants 3. Poultry Processing Plant Workers and Compensation a. Poultry Processing Plant Work and Workers b. Competition for Poultry Processing Plant Workers c. Setting and Adjusting Plant Worker Compensation B. Defendants’ Conspiracy To Collaborate on Compensation Decisions, Share Compensation Information, and Use Consultants To Facilitate Their Conspiracy 1. WMS Poultry Industry Survey Group a. WMS Survey Group History, Rules, and Control by Processor Conspirators b. Compensation Data Exchanged Through WMS Survey Group E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 c. WMS Survey Group Exchanges by Year, Defendant, and Type of Information Exchanged in Surveys and In-Person Meetings 2. Direct Processor-to-Processor Collaboration and Information Exchanges a. Chicken Industry Wage Index (‘‘CHIWI’’) Exchange b. U.S. Poultry & Egg Association Member Processors’ Exchanges c. Processor Conspirators’ Ad Hoc Direct Exchange 3. Exchange of Compensation Information Through Consultant Co-Conspirator 1 4. Processors’ Collaboration and Assistance on Compensation 5. Processors Recognize Their Agreement Likely Violated the Antitrust Laws and Attempt To Cover It Up C. Defendants Sanderson’s and Wayne’s Deceptive Practices Toward Growers VI. Elements of the Sherman Act Claim A. The Agreement To Collaborate on Compensation Decisions, Exchange Compensation Information, and Facilitate Such Collaboration and Exchanges B. Primary Poultry Processing Plant Employment Is a Relevant Labor Market C. The Geographic Markets for Poultry Processing Plant Labor D. Market Power E. Anticompetitive Effects: Processor Conspirators’ Conspiracy Anticompetitively Affected Decisions About Compensation for Plant Processing Workers VII. Violations Alleged VIII. Requested Relief I. Nature of the Action 1. From chicken noodle soup to golden-roasted Thanksgiving turkey, Americans consume more poultry than any other animal protein, including beef and pork. 2. By the time poultry is served in a home kitchen, restaurant, or school cafeteria, it has passed through a complex supply chain that includes hatcheries, growers (i.e., farmers who raise live poultry for meat or eggs), and poultry processors, which employ hundreds of thousands of workers who process chicken or turkey for distribution to customers or secondary processing plants. 3. Poultry processing plant workers play a vital role in the poultry meat supply chain. These workers catch, slaughter, gut, clean, debone, section, and pack chickens and turkeys into saleable meat. Many of them withstand physically demanding and often dangerous working conditions. For example, a ‘‘live hanger’’ in a poultry processing plant grabs, lifts, and hangs for slaughter about 30 living birds per minute, as each bird claws, bites, and flaps its wings. These workers risk injuries ranging from exhaustion to mutilation to provide for themselves VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 and their families. In doing so, they help make food available to families nationwide. 4. Like all workers, poultry processing plant workers deserve the benefits of free market competition for their labor, including wages and benefits that are set through a competitive process that is free from anticompetitive coordination between employers. Instead, for at least the past 20 years, poultry processors that dominate local employment markets for poultry processing plant workers and employ more than 90 percent of all such workers in the United States collaborated on and assisted each other with compensation decisions. Their conspiracy included sharing data and other information— directly and through consultants—about their current and future compensation plans. Rather than make compensation decisions independently, these processors chose to help each other at the expense of their workers. As a result, they artificially suppressed compensation in the labor markets in which they compete for poultry processing plant workers, and deprived a generation of poultry processing plant workers of fair pay set in a free and competitive labor market. 5. Through communications over decades, which occurred in large groups, small groups, and one-to-one, these poultry processors agreed that they would assist each other by discussing and sharing information about how to compensate their poultry processing plant workers. As one poultry processor wrote to another about sharing wage rates, ‘‘I am interested in sharing this information with you. . . . I am hoping we can develop a collaborative working relationship.’’ The poultry processors’ collaboration on compensation decisions, including their exchange of compensation information, took many forms over the years of the conspiracy. For example: a. An employee of one poultry processor emailed eight competitors that ‘‘It’s that time of year already’’ and requested ‘‘your companies projected salary budget increase recommendation.’’ Her coworker added, ‘‘Seriously -any info you can give us will be helpful.’’ 1 b. A group of competing poultry processors exchanged ‘‘disaggregated raw [identifiable] data regarding the compensation of hourly-paid workers . . . broken down by plant and 1 In quotes throughout the Amended Complaint, all spelling and grammatical errors are transcribed as they were found in the primary source text, without [sic] notions. PO 00000 Frm 00003 Fmt 4701 Sfmt 4703 34031 location’’; base pay and bonuses ‘‘for each specific salaried position’’ included in their survey; any ‘‘planned increase in the salary range for the current budget year’’; any ‘‘planned increase in the salary range for the next budget year’’; the dates of planned future increases; and ‘‘disaggregated, raw data for some benefits.’’ Employees of these poultry processors then met in person and discussed specific compensation, including attendance bonuses and overtime work payments. c. When one poultry processor’s human resources employee emailed two competitors to ask ‘‘what your starting rate is for these kids hired right out of college,’’ she noted in the same correspondence that her employer was ‘‘in the midst of completely revamping our Plant Management Trainee program.’’ Without further prompting, her competitor shared detailed wage information for its Beginner and Advanced Trainee program. d. One poultry processor emailed others, ‘‘I had a question for the group also. We are trying to determine what is reasonable for salaried employee to be compensated for working 6 and/or 7 days in a work week when the plant is running . . . Do you pay extra for these extra days worked for salaried (exempt) employees?’’ and ‘‘If so, how is that calculated?’’ e. Nearly the entire poultry industry has subscribed to exchanges of information through a data consultant that includes compensation information that is so disaggregated that industry participants could determine the wages and benefits their competitors pay for specific positions at specific plants across the country. 6. These collaborations demonstrate a clear agreement between competitors to ask for help with compensation decisions and to provide such help to others upon request. As part of this agreement to collaborate, the poultry processors shared information about current and future compensation decisions. They also shared disaggregated and identifiable information, which could readily be traced to a particular competitor or even a particular plant. 7. Even apart from their collaboration on compensation decisions, the poultry processors’ information exchanges— standing alone—also violated the Sherman Act. The poultry processors, both directly and through data consultants, shared compensation information so detailed and granular that the poultry processors could determine the wages and benefits their competitors were paying—and planning to pay—for specific job categories at E:\FR\FM\25MYN2.SGM 25MYN2 34032 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 specific plants. The compensation information the poultry processors exchanged allowed them to make compensation decisions that benefited themselves as employers and suppressed competition among them for workers. 8. Defendants Cargill Meat Solutions Corporation and Cargill, Inc. (together, ‘‘Cargill’’); George’s Inc. and George’s Foods, LLC (‘‘George’s’’); SandersonWayne Farms, LLC, a merged entity made up of formerly separate firms Sanderson Farms, Inc. (‘‘Sanderson’’) and Wayne Farms, LLC (‘‘Wayne’’) 2 (collectively, the ‘‘Processor Defendants’’), as well as Webber, Meng, Sahl & Co., Inc. (‘‘WMS’’) and WMS President G. Jonathan Meng (‘‘Meng’’) (the ‘‘Consultant Defendants’’), participated in this unlawful conspiracy, together with other poultry processors and another consulting firm.3 9. The poultry processors kept much of their collaboration and information exchanges secret in an attempt to hide their anticompetitive conduct. As a condition for membership in the survey exchange facilitated by one data consultant, the poultry processors promised that they would keep the compensation information exchanged confidential. When the survey group members met to collaborate on compensation decisions, they asked and expected the data consultant to leave the room when they discussed current and future compensation decisions. Even when one processor left the survey due to legal concerns in 2012, the poultry processors did not end their anticompetitive conduct; the other survey participants continued collaborating and exchanging information. 10. When antitrust authorities and private class-actions began to surface anticompetitive conduct in other parts of the poultry industry, the poultry processors grew alarmed about the risk that their conspiracy would be found out. One of them warned the others about ‘‘a private investigator’’ who was 2 On July 22, 2022, Cargill and Wayne’s parent company, Continental Grain Co., announced that a joint venture of Cargill and Wayne had acquired Sanderson and would call the merged entity Wayne-Sanderson Farms. Cargill and Continental Grain Complete Acquisition of Sanderson Farms, Cargill, Inc. (July 22, 2022), https:// www.cargill.com/2022/cargill-continental-graincomplete-acquisition-sanderson-farms (last accessed May 15, 2023). For the sake of clarity and convenience, hereafter, this Amended Complaint will address Cargill, Sanderson, and Wayne separately due to their status as separate companies during the conduct described. 3 The Amended Complaint labels conspirators other than the Defendants with pseudonyms because the United States has an ongoing investigation into this conduct. VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 asking ‘‘questions about the types of information we shared at our meeting, the survey and other questions that I will simply call ‘general anti-trust fishing’ questions. . . . So just a little reminder that the bad-guys are still out there, and why we hold strict confidences about discussing wages.’’ 11. For at least two decades, poultry processors that dominated local markets for poultry processing plant work and controlled more than 90 percent of poultry processing plant jobs nationwide agreed to help each other make decisions about current and future compensation for their hourly and salaried plant workers, to exchange information about current and future compensation decisions, and to facilitate such exchanges through data consultants. The processors used the information they received through their collaboration and exchanges to make decisions on compensation for their workers. Indeed, they found it so useful that when fear of antitrust liability finally motivated several poultry processors to remove disaggregated compensation information from their exchanges, one processor complained that the new survey ‘‘has suffered significant obscuring of results . . . and I would ask—is it still useful information any longer?’’ 12. The agreement to collaborate on compensation decisions and exchange information had the tendency and effect of suppressing competition for poultry processing workers and thereby suppressing these workers’ compensation. The poultry processors’ conspiracy is a scheme among competing buyers of labor (employers) that collectively possess market power over the purchase of poultry processing plant labor. By conspiring on decisions about compensation, these firms, with the assistance of consultants, collaborated to control the terms of employment of poultry processing plant jobs. Ultimately, the conspiracy gave the poultry processors the ability to suppress competition and lower compensation below the levels that would have prevailed in a free market. 13. The agreement to collaborate with and assist competing poultry processors in making compensation decisions, to exchange compensation information, and to facilitate this conduct through consultants is an unlawful restraint of trade in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. It should be enjoined. 14. Defendants Sanderson and Wayne have further acted deceptively to their growers, the farmers responsible for raising the poultry for slaughter. These Defendants compensate their growers PO 00000 Frm 00004 Fmt 4701 Sfmt 4703 through the ‘‘tournament system,’’ under which growers’ base compensation is adjusted up or down depending on how each grower performs relative to others on defined metrics. But Sanderson and Wayne supply growers with the major inputs that contribute to growers’ performance, such as chicks and feed, and these Defendants’ contracts with growers omit material information about the variability of the inputs provided to growers. Because Sanderson and Wayne do not adequately disclose the risk inherent in their tournament systems to growers, growers cannot reasonably evaluate the range of potential financial outcomes, manage their risks, or compare competing poultry processors. This failure to disclose is deceptive and violates the Section 202(a) of the Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 192(a). These deceptions should be enjoined. II. Jurisdiction and Venue 15. Defendants Cargill, George’s, Meng, Sanderson, Wayne, and WMS have consented to personal jurisdiction and venue in the District of Maryland. 16. Defendant Cargill, Inc. owns and operates facilities, and employs workers, in Maryland. 17. The Consultant Defendants sell services to clients throughout the United States, including in Maryland. The Consultant Defendants’ services included collecting, compiling, and providing data on poultry processing worker compensation across the United States, including information about poultry processing workers in Maryland. 18. Each Processor Defendant sells poultry meat throughout the United States. As of 2022, poultry processing in the U.S. was a $30 billion industry. Each Defendant is engaged in interstate commerce and activities that substantially affect interstate commerce. The collaboration between these Defendants in making compensation decisions, including through exchanges of processing plant compensation information that involved all Defendants, also substantially affects interstate commerce. 19. The United States brings this action pursuant to Section 4 of the Sherman Act, 15 U.S.C. 4, to prevent and restraint Defendants’ violations of Section 1 of the Sherman Act, 15 U.S.C. 1. 20. The Court has subject matter jurisdiction under 28 U.S.C. 1331, 28 U.S.C. 1337, and Section 4 of the Sherman Act, 15 U.S.C. 4, to prevent and restrain Defendants from violating E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices Section 1 of the Sherman Act, 15 U.S.C. 1. 21. Venue is proper in this judicial district under Section 12 of the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 1391(b), and (c) because one or more of the Defendants and co-conspirators transacted business, was found, and/or resided in this District; a substantial part of the events giving rise to the United States’s claims arose in this District; and a substantial portion of the affected interstate trade and commerce described herein has been carried out in this District. The Court has personal jurisdiction over each Defendant under 15 U.S.C. 22, 5. 22. Regarding violations by Defendants Sanderson and Wayne of the Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 181 et seq., the Court has jurisdiction under 28 U.S.C. 1345 and 7 U.S.C. 224. III. Terms of Reference 23. This Amended Complaint refers to the consultants and poultry processors involved in the conspiracy as follows: 24. The consultant conspirators include Defendants WMS and G. Jonathan Meng (together, the ‘‘Consultant Defendants’’) and Consultant Co-Conspirator 1.4 34033 25. The poultry processor conspirators include Cargill, George’s, Sanderson, and Wayne (together, the ‘‘Processor Defendants’’), and Processor Co-Conspirators 1 through 7 and 9 through 18, inclusive, which are distinct poultry processing companies. 26. The Processor Defendants, together with Processor Co-Conspirators 1 through 7 and 9 through 18, inclusive, are the ‘‘Processor Conspirators.’’ 27. Acts in furtherance of the conspiracy to collaborate with and assist competitors, to exchange information, and to facilitate such collaboration and exchanges can be summarized as detailed on the following page: CONDUCT INVOLVED IN CONSPIRACY Descriptor Anticompetitive conduct Collaboration on Compensation Decisions (‘‘Collaboration Conduct’’). Poultry processors attended in-person meetings and engaged in direct communications with their competitors to collaborate with and assist each other in making compensation decisions, including through the direct exchange of compensation information and the indirect exchange of such information facilitated by consultants WMS and Consultant Co-Conspirator 1. Such compensation decisions and compensation information exchanges included current and future, disaggregated, and identifiable confidential compensation information related to poultry processing plant workers. This collaboration was anticompetitive, and it suppressed poultry processing plant worker compensation. Period: 2000 or earlier to present. As part of the Processor Conspirators’ conspiracy to collaborate on compensation decisions, they paid Defendants WMS and Jonathan Meng to facilitate a poultry processing plant worker compensation survey, designed and with rules set by the Processor Conspirators, which included the exchange of current and future, disaggregated, and identifiable confidential compensation information related to poultry processing plant workers. This exchange was anticompetitive, and it suppressed poultry processing plant worker compensation. Period: 2000 or earlier to 2020. As part of the Processor Conspirators’ conspiracy to collaborate on compensation decisions, they submitted to and purchased from Consultant Co-Conspirator 1 current, disaggregated, and identifiable confidential compensation information related to poultry processing plant workers. This exchange was anticompetitive, and it suppressed poultry processing plant worker compensation. Period: 2010 or earlier to present. Exchange of Compensation Information Facilitated by WMS (‘‘WMS Exchange’’). Exchange of Compensation Information Facilitated by Consultant Co-Conspirator 1 (‘‘Consultant Co-Conspirator 1 Exchange’’). 28. Cargill Meat Solutions Corporation is a Delaware company headquartered in Wichita, Kansas. Cargill Meat Solutions Corporation owns poultry processing plants, employs and compensates the workers in these plants, and employs executives and other representatives that set compensation for its plant workers throughout the United States. Cargill Meat Solutions Corporation participated in the anticompetitive compensation information exchanges with representatives of its competitors for poultry processing plant workers. 29. Cargill, Inc. is a privately-held company headquartered in Wayzata, Minnesota. Cargill, Inc. is the parent company of Cargill Meat Solutions Corporation. Cargill, Inc. participated in the anticompetitive compensation information exchanges with representatives of its competitors for poultry processing plant workers. 30. Defendants Cargill, Inc. and Cargill Meat Solutions Corporation are referred to collectively as ‘‘Cargill,’’ unless otherwise noted for specificity. 31. From at least 2000 until the present, Cargill participated in the anticompetitive agreement to collaborate with and assist its competitors in making decisions about compensation for poultry processing plant workers, including through the exchange of current and future, disaggregated, and identifiable wage and benefit information, by engaging in the following conduct in the following years: a. Collaboration Conduct: at least 2000 to present; b. WMS Exchange: 2000–2019; and c. Consultant Co-Conspirator 1 Exchange: 2010 to present. 32. As a result of its anticompetitive conduct, Cargill set and paid artificially suppressed wages and benefits for its 4 As noted above, co-conspirators have been designated with pseudonyms because the United States has an ongoing investigation into this conduct. IV. Defendants lotter on DSK11XQN23PROD with NOTICES2 A. Cargill VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4703 hourly and salaried poultry processing plant workers. B. Sanderson 33. Sanderson is a Mississippi company headquartered in Oakwood, Georgia. Continental Grain Company is the controlling shareholder of Sanderson. Sanderson owns poultry processing plants, employs and compensates the workers in these plants, and employs executives and other representatives that set compensation for its plant workers throughout the United States. 34. From at least 2000 until the present, Sanderson participated in the anticompetitive agreement to collaborate with and assist its competitors in making decisions about compensation for poultry processing plant workers, including through the exchange of current and future, disaggregated, and identifiable wage and benefit information, by engaging in the E:\FR\FM\25MYN2.SGM 25MYN2 34034 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices following conduct in the following years: a. Collaboration Conduct: at least 2000 to present; b. WMS Exchange: 2000–2011; and c. Consultant Co-Conspirator 1 Exchange: 2010 to present. 35. As a result of its anticompetitive conduct, Sanderson set and paid artificially suppressed wages and benefits for its hourly and salaried poultry processing plant workers. lotter on DSK11XQN23PROD with NOTICES2 C. Wayne 36. Wayne is a Delaware company headquartered in Oakwood, Georgia. Continental Grain Company is the controlling shareholder of Wayne. Wayne owns poultry processing plants, employs and compensates the workers in these plants, and employs executives and other representatives that set compensation for its plant workers throughout the United States. 37. From at least 2000 until the present, Wayne participated in the anticompetitive agreement to collaborate with and assist its competitors in making decisions about compensation for poultry processing plant workers, including through the exchange of current and future, disaggregated, and identifiable wage and benefit information, by engaging in the following conduct in the following years: a. Collaboration Conduct: at least 2000 to present; b. WMS Exchange: 2000–2019; and c. Consultant Co-Conspirator 1 Exchange: 2010 to present. 38. As a result of its anticompetitive conduct, Wayne set and paid artificially suppressed wages and benefits for its hourly and salaried poultry processing plant workers. D. George’s 39. George’s, Inc. is a privately-held Arkansas corporation headquartered in Springdale, Arkansas. George’s, Inc. owns poultry processing plants, employs and compensates the workers in these plants, and employs executives and other representatives that set compensation for its plant workers throughout the United States. George’s, Inc. participated in the anticompetitive compensation information exchanges with representatives of its competitors for poultry processing plant workers. 40. George’s Foods, LLC is a Virginia corporation headquartered in Edinburg, Virginia. George’s, Inc. and George’s Foods, LLC are affiliates. George’s Foods, LLC operates a poultry complex in Harrisonburg, Virginia, and employs and compensates the complex’s poultry workers. George’s Foods, LLC VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 participated in the anticompetitive compensation information exchanges with representatives of its competitors for poultry processing plant workers. 41. Defendants George’s, Inc. and George’s Foods, LLC are referred to collectively as ‘‘George’s,’’ unless otherwise noted for specificity. 42. From at least 2005 until the present, George’s participated in the anticompetitive agreement to collaborate with and assist its competitors in making decisions about compensation for poultry processing plant workers, including through the exchange of current and future, disaggregated, and identifiable wage and benefit information, by engaging in the following conduct in the following years: d. Collaboration Conduct: at least 2005 to present; e. WMS Exchange: 2005–2018; and f. Consultant Co-Conspirator 1 Exchange: 2010 to present. 43. As a result of its anticompetitive conduct, George’s set and paid artificially suppressed wages and benefits for its hourly and salaried poultry processing plant workers. E. WMS 44. WMS is a Pennsylvania corporation located in Pottstown, Pennsylvania. WMS provides compensation consulting services, including through the use of compensation surveys, for clients in a broad range of industries. 45. From 2000 to 2020, WMS administered surveys that facilitated the Processor Conspirators’ conspiracy by gathering, sorting, and disseminating disaggregated and identifiable information about current and future compensation for poultry processing plant workers. 46. From 2000 to 2002 and 2004 to 2019, WMS also facilitated, supervised, and participated in in-person meetings at which the Processor Conspirators assembled to discuss current and future, disaggregated, and identifiable poultry processing plant worker compensation decisions and information. 47. Through its administration of surveys and participation at annual inperson meetings of the Processor Conspirators, WMS facilitated the Processor Conspirators’ sharing of their confidential, competitively sensitive information about compensation for poultry processing plant workers. 48. WMS’s involvement in this conspiracy artificially suppressed compensation for poultry processing plant workers. PO 00000 Frm 00006 Fmt 4701 Sfmt 4703 F. Jonathan Meng 49. G. Jonathan Meng is an individual residing in the State of Colorado. Since 2000, Meng has been the President of WMS. 50. From 2000 to the present, Meng has had primary responsibility at WMS for designing and presenting compensation surveys, collecting survey data, developing new clients, maintaining client relationships, and obtaining payment for services rendered. 51. Meng personally administered and supervised WMS’s surveys, which disseminated the Processor Conspirators’ current and future, disaggregated, and identifiable information about compensation for poultry processing plant workers. 52. From 2000 until 2019, Meng, representing WMS, also facilitated, supervised, and participated in inperson meetings at which the Processor Conspirators assembled to discuss current and future, disaggregated, and identifiable poultry processing plant worker compensation information. 53. By administering and supervising the surveys and meetings of the poultry processing defendants, Meng facilitated the Processor Conspirators’ sharing of confidential, competitively sensitive information about compensation for poultry processing plant workers. 54. Meng’s facilitation of this conspiracy artificially suppressed compensation for poultry processing plant workers. G. Co-Conspirators 55. Several entities conspired with the Defendants during the following years to collaborate with and assist competing poultry processors in making compensation decisions, to exchange compensation information, and to facilitate this conduct: Consultant CoConspirator 1 (at least 2010 to the present); Processor Co-Conspirator 1 (at least 2002 to the present); Processor CoConspirator 2 (at least 2015 to the present); Processor Co-Conspirator 3 (at least 2010 to the present); Processor CoConspirator 4 (at least 2004 to the present); Processor Co-Conspirator 5 (at least 2014 to the present); Processor CoConspirator 6 (at least 2000 to the present); Processor Co-Conspirator 7 (at least 2000 to the present); Processor CoConspirator 9 (at least 2014–2015); Processor Co-Conspirator 10 (at least 2009 to the present); Processor CoConspirator 11 (at least 2005 to the present); Processor Co-Conspirator 12 (at least 2010 to the present); Processor Co-Conspirator 13 (at least 2009 to the present); Processor Co-Conspirator 14 E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices (at least 2000 to the present); Processor Co-Conspirator 15 (at least 2000 to the present); Processor Co-Conspirator 16 (at least 2014 to the present); Processor Co-Conspirator 17 (at least 2019 to the present); and Processor Co-Conspirator 18 (at least 2000 to the present). V. Factual Allegations A. Poultry Industry Background lotter on DSK11XQN23PROD with NOTICES2 1. Hatcheries and Growers 56. Poultry are domesticated fowl, including chicken and turkey, bred for their meat and eggs. 57. Poultry processors own hatcheries, in which they hatch chicks or poults (baby turkeys) from eggs. Poultry processors supply these young birds to growers. Growers are farmers who raise the birds to specifications set by, and with feed and supplies provided by, the poultry processors with which they contract. When the growers have finished raising the birds and the birds are ready for slaughter, the processors pay the growers for their services per pound of poultry. 58. This arrangement allocates substantial risk from the poultry processors to growers. Many poultry processors historically compensate growers through a tournament system. Processors control the chicks or poults, feed, and other inputs that are supplied to growers. The grower, in addition to raising the chicks, often must make substantial financial investments to build or improve chicken barns to meet the processor’s specifications. Growers are compensated through a base payment set in a contract between the processor and the grower. But the processor can adjust the base payment up or down based on how a grower compares to other growers (which the processor selects) on production and efficiency metrics. In practice, these ‘‘performance’’ adjustments make it very difficult for growers to project and manage the risk they face when entering a contract with a processor— particularly since processors control the key inputs to poultry growing. 59. Growers’ contracts often do not disclose the true financial risk that the grower faces, including basic information like the number and size of flocks they are guaranteed. Similarly, growers often do not receive disclosures that would allow them to assess the tournament system. Growers often have little or no choice in which processor they contract with because there are limits to how far live poultry can be transported, and therefore only processors with nearby facilities are reasonable options. VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 2. Poultry Processing Plants 60. Once grown, the birds are packed into trucks and driven to primary poultry processing plants. Primary poultry processing plants tend to be built near hatcheries and growing facilities, which are usually in rural areas. 61. Once the birds arrive at primary processing plants, poultry processing plant workers take the birds from the trucks and hang, slaughter, clean, segment, and pack the meat. This work is generally performed on a poultry processing line, where workers perform the same task repeatedly. Poultry processing plants are kept at cold temperatures to preserve the meat processed inside. The machinery necessary to process poultry carcasses and meat products is very loud, making it difficult for workers on the poultry processing line to hear and communicate. Slaughtering and packing poultry often results in blood and gore covering work surfaces and workers’ protective gear. Moreover, the meat and byproducts of the slaughter process create a foul-smelling atmosphere that is slippery from fat, blood, and other byproducts and waste from the slaughter process. 62. Processing plants employ salaried workers to manage this slaughter process and ensure that the processing plants comply with relevant health and safety laws, among other things. 63. Meat from the birds slaughtered in primary processing plants is either sold to customers (e.g., grocery stores, restaurants, and other retailers) or sent to secondary processing plants at which the meat is further prepared for consumption, such as being sliced for deli packs or breaded. 3. Poultry Processing Plant Workers and Compensation a. Poultry Processing Plant Work and Workers 64. According to the U.S. Bureau of Labor Statistics, over 240,000 people worked in the U.S. poultry processing industry as of June 2020. Some of these workers worked in Maryland. 65. Many poultry processing plant jobs require physical stamina because they are performed standing on the poultry processing line. These jobs also demand tolerance of unpleasant conditions including low temperatures, bad odors, blood and viscera, loud machinery noise, and, in some cases, dim lighting. Poultry processing plant work also can be dangerous, including because of the risk of injury from cutting instruments and repetitive-motion tasks. Many workers must stand on the PO 00000 Frm 00007 Fmt 4701 Sfmt 4703 34035 processing line repeating the same rapid motions continuously. These motions can involve handling live, clawed birds, heavy lifting, and the use of sharp cutting instruments, all of which are physically demanding and involve a high risk of injury. 66. In a competitive labor market, employers compete to attract and retain workers—much like manufacturers compete to attract potential customers in a downstream product market. Poultry processing plants compete with each other to attract workers who can perform this difficult work, and potential and current poultry processing plant workers seek out employers that will provide the best compensation for their labor. 67. Many jobs in poultry processing plants present unique characteristics that make it difficult for workers to switch to a different kind of job. The difficulty of switching to other jobs is enhanced by the specific skills developed and circumstances faced by workers in poultry processing firms. Workers in poultry processing plants often face constraints that reduce the number of jobs and employers available to them, limiting the number of competitors for their labor. Poultry processing plant workers also share common attributes that they bring with them to their jobs and develop common skills when performing these jobs. As a result of these poultry processing plant workers’ common constraints, attributes, and skills, poultry processors are distinguishable from other kinds of employers from the perspective of poultry processing plant workers. 68. Common constraints facing poultry processing plant workers: Many poultry processing plant workers face constraints in finding employment that greatly restrict their job options. For these workers, poultry processing plants offer opportunities that are not available in other industries. Workers who cannot speak, read, or write English or Spanish, for example, can still perform poultry processing plant line work, which is primarily physical labor and done under conditions so loud as to make speaking and hearing difficult. Similarly, workers with criminal records, probation status, or lack of high school or college education are often able to work at poultry processing plants even when other jobs are not available to them. These workers distinguish poultry processors, whose doors remain open to them, from employers in other industries, in which jobs are not available to them. 69. In addition, many poultry processing plants are located in rural areas, in which workers often have E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34036 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices fewer job alternatives—especially for full-time, year-round work—as compared to workers in other areas. 70. Poultry processing workers’ inability to access jobs in many, and sometimes any, other industries that would provide them with steady and year-round work is evidenced by the conditions these workers tolerate. 71. Common attributes of poultry processing plant jobs: As discussed above, poultry processing plant workers must be able to tolerate particularly challenging working conditions. An employer that requires a particular trait in its employees will generally recruit and retain workers with that trait by offering compensation or other inducements that are more attractive than those offered to these workers by employers that do not value that trait. This makes such an employer distinguishable and more appealing to such employees, who have that trait. The physical stamina and other attributes required for poultry processing plant work mean that poultry processors will compensate or otherwise reward workers who possess those attributes more highly than employers in other industries. From the perspective of the prospective poultry processing plant worker, poultry processing plant jobs are distinguishable from and likely more valuable than other lower-paid work that does not value and reward such attributes. In other words, other jobs are not reasonable substitutes for poultry processing plant jobs. 72. Common skills of poultry processing plant workers: Poultry processing plant workers develop special skills on the job. Workers learn these skills through the repetitive and, at times, difficult or dangerous tasks they perform on the poultry processing line. Poultry processing plant workers learn how to handle and slaughter live birds, wield knives and blades, section poultry carcasses, clean meat in a manner consistent with health and safety standards, manage other workers performing these tasks, examine and repair the necessary machinery, maintain health and safety standards, and, crucially, perform these tasks efficiently so as not to slow down the plant line. Workers in management or other less physically demanding jobs also build industry-specific skills, including expertise in effective plant management and retention of employees. Just as with the common attributes of poultry processing plant workers who take plant jobs, the common skills of workers who stay and learn plant jobs help to define the relevant labor market. Not all potential VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 workers can develop these important skills, and many fail out of poultry processing plant jobs within weeks. A worker with the skills to succeed on the line is most valuable to other poultry processing plants—and thus will receive the most compensation from poultry processors. Thus, from the workers’ perspective, poultry processing plants are not reasonable substitutes for other employers. b. Competition for Poultry Processing Plant Workers 73. The Processor Conspirators, which compete to hire and retain poultry processing plant workers, control more than 90 percent of poultry processing plant jobs nationwide. In some local areas, they control more than 80 percent of these jobs. 74. These poultry processors use similar facilities, materials, tools, methods, and vertically-integrated processes to produce processed poultry and downstream products in which they compete for sales to similar sets of customers. They also compete with each other for processing plant workers. 75. Poultry processors recruit workers in many different ways. They advertise for workers, use recruitment agencies, and rely on word of mouth or personal connections, sometimes offering referral bonuses, to attract friends or family of existing workers to come to their plants. The processors recruit workers in their plants’ local areas but also more broadly. For example, poultry processors sometimes target workers in other states and even internationally. c. Setting and Adjusting Plant Worker Compensation 76. Poultry processors compensate hourly and salaried plant workers through wages and benefits. 77. Hourly poultry processing plant workers’ wages typically consist of a base pay rate set according to their role, with upward adjustments or bonuses offered based on factors including seniority, skill, productivity, and shift time. Salaried poultry processing plant workers’ wages typically consist of annual salaries and may include annual or performance bonuses. 78. Processing plants also typically offer benefits to their hourly and salaried workers. These benefits can include personal leave, sick leave, health and medical insurance, other types of insurance, and retirement plans or pensions, among others. 79. Poultry processors also control working conditions within their plants, which can affect a poultry processing plant worker’s job experience. These conditions include the quality of PO 00000 Frm 00008 Fmt 4701 Sfmt 4703 mechanical and safety equipment at the plant, temperature, and the speed at which the plant line moves, which determines the speed at which the workers have to perform their work. 80. Poultry processors typically make certain compensation-related decisions at the corporate level, which affect their workers nationwide. For example, poultry processors generally set overall labor compensation budgets, some plant worker wages, and some plant worker benefits in a centralized manner and at the national level. To illustrate, an executive at a poultry processor who manages compensation for the entire company may determine the health benefits for all of the line workers at all of the company’s plants. 81. Poultry processors also typically adjust some wages and benefits at the corporate level, but for a regional or local area, on the basis of local factors. For example, an executive managing compensation for an entire poultry processing company may consider a particular plant’s needs and the pay at other nearby plants when deciding the base rate per hour for shoulder cutters on the plant line. As a result, shoulder cutters across all of the processor’s plants may receive different base rates. B. Defendants’ Conspiracy To Collaborate on Compensation Decisions, Share Compensation Information, and Use Consultants To Facilitate Their Conspiracy 82. The Processor Conspirators, facilitated by the Consultant Defendants and Consultant Co-Conspirator 1, collaborated on compensation decisions, including by exchanging competitively sensitive information about plant worker compensation. The exchange of such compensation information, much of it current or future, disaggregated, or identifiable in nature, allowed the poultry processors to discuss the wages and benefits they paid their poultry processing plant workers. This section of the Amended Complaint first describes the nature of their conspiracy in broad terms and then details some specific examples of the conspirators’ collaboration and exchanges of information. 83. The Processor Conspirators collaborated with and sought assistance from each other when making decisions about wages and benefits for their poultry processing plant workers. These decisions should have been made independently. As a result, rather than competing for workers through better wages or benefits, the Processor Conspirators helped each other make compensation decisions. E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices 84. The compensation information that poultry processors exchanged included information for both hourly and salaried plant jobs. Through the exchanges, a poultry processor could learn its competitors’ base wage rates for a host of different poultry processing plant jobs, from live hangers to shoulder cutters to plant mechanics. 85. Through emails, surveys, data compilations, and meetings, the Processor Conspirators assembled a ‘‘map’’ of poultry processing plant worker compensation across the country. This ‘‘map’’ was broad enough to show nationwide budgets and granular enough to show compensation at individual poultry processing plants. The exchanges allowed the poultry processors to learn not only the current state of compensation in their industry but also, in some cases, plans for the next year’s compensation. The poultry processors exchanged information about nationwide, regional, and local wages and benefits. 86. As one example, in December 2009, Processor Co-Conspirator 18’s Director of HR emailed Processor CoConspirator 14’s Compensation Manager seeking a chart of information about Processor Co-Conspirator 14’s current start rates and base rates for certain workers at specific Processor CoConspirator 14 plants in Maryland, Delaware, Virginia, North Carolina, South Carolina, Tennessee, Kentucky, and Alabama. Processor Co-Conspirator 18’s Director of HR also asked Processor Co-Conspirator 14’s Compensation Manager, ‘‘if you have negotiated, scheduled increases please list, or if it is a non-union facility and they have an annual increase just tell me that and what month.’’ In the Processor CoConspirator 18 employee’s own words, the purpose of this request, and the survey Processor Co-Conspirator 18 was building at the time (the Chicken Industry Wage Index, discussed below), was ‘‘to use the data to set wage rates and use when negotiating with the Union. . . . I am interested in sharing this information with you. . . . I am hoping we can develop a collaborative working relationship. I appreciate you taking the time to speak to me today and supplying this information to me’’ (emphasis added). Processor CoConspirator 14 responded, ‘‘See completed information below,’’ filling out the chart as its competitor and collaborator Processor Co-Conspirator 18 requested. 87. The conspiracy reduced incentives for the Processor Conspirators to bid up salaries to attract experienced workers or retain workers that might have left for other processing VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 plants. The detailed knowledge of their competitors’ current and future compensation gave each Processor Conspirator a path to paying its own poultry processing plant workers less than it would have absent the ondemand access they possessed to current and future, disaggregated, and identifiable information about its competitors. 88. The Processor Conspirators took pains to keep their collaboration secret, and they controlled which processors could participate in their information exchanges. 89. The conspiracy brought together rival poultry processors that competed with each other for workers. In a functioning labor market, the Processor Conspirators would have avoided sharing such confidential, competitively-sensitive compensation information. Their agreement distorted the mechanism of competition between poultry processors for poultry processing plant workers. This competitive distortion resulted in compensation that was not determined competitively but rather was suppressed—less than what workers would have been paid but for the anticompetitive conduct. 90. Unlike the Processor Conspirators, many of which are large, sophisticated corporate entities, the poultry processing plant workers lacked access to a comparable ‘‘map’’ of poultry processing plant compensation. To understand the wages they could earn, whether at plants in their local region or far across the country, workers had to rely on word-of-mouth or their own time- and labor-intensive research. These workers suffered from deep information asymmetries as a result of the Processor Conspirators’ and Consultant Defendants’ anticompetitive conduct. 1. WMS Poultry Industry Survey Group 91. From at least 2000 to 2020, a group of poultry processors, including all Processor Conspirators, agreed to participate in an exchange of compensation information facilitated by Defendant WMS (the ‘‘WMS Survey Group’’). 92. Through the WMS Survey Group, all of the Processor Conspirators exchanged current and future, disaggregated, and identifiable information about their plant workers’ wages and benefits. They also met annually in person to discuss these exchanges. At these meetings, the Processor Defendants shared additional compensation information and collaborated on compensation decisions. PO 00000 Frm 00009 Fmt 4701 Sfmt 4703 34037 a. WMS Survey Group History, Rules, and Control by Processor Conspirators 93. Before 2000 and potentially as early as the 1980s, many of the Processor Conspirators, including Defendants Cargill, Sanderson, and Wayne, as well as Processor CoConspirators 6, 7, 14, 15, 17, and 18, participated in a group similar to the WMS Survey Group, but in which they directly exchanged compensation data with each other without the participation of WMS. 94. Beginning in 2000, the Processor Conspirators hired WMS and Defendant Jonathan Meng to provide a veneer of legitimacy for their collaboration and information exchange. 95. Meng believed that in hiring him and WMS, the Processor Conspirators were not trying to comply with the antitrust laws, but instead were trying ‘‘to establish the appearance of compliance with the Safe Harbor guidelines and antitrust law and obtain compensation data in a matter that sometimes seemed permissible.’’ By ‘‘Safe Harbor,’’ Meng was referring to guidance antitrust authorities have provided about how companies can reduce the likelihood that an exchange of information between competitors is unlawful. Although this guidance does not immunize any competitor information exchange from the antitrust laws (and has never done so), the Defendants and Co-Conspirators were sharing the type of information that the guidance specifically identified as likely to violate the antitrust laws. 96. While Defendant WMS began administering the survey in 2000— issuing the survey forms, receiving responses from the participants, distributing the results, and presenting them in person every year at their annual meeting—the Processor Conspirators together controlled the categories of compensation information included in the survey and the requirements for group membership. The processors made these decisions through the WMS Survey Group’s Steering Committee, on which Processor Co-Conspirators 6, 7, 14, 15, and 18 sat on a rotating basis from 2000 through 2020. The Steering Committee, along with the other WMS Survey Group participants, including Defendants Cargill, George’s, Sanderson, and Wayne and Processor Co-Conspirators 3 and 17, voted on potential new members in the WMS Survey Group. Thus, while WMS facilitated this scheme, including by collecting the information and tabulating the results, the Processor Conspirators themselves decided to collaborate on compensation decisions E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34038 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices and exchange anticompetitive compensation information. 97. Processor Co-Conspirator 5’s successful attempt to join the WMS Survey Group in October 2014 highlights the group’s membership standards and what motivated poultry processors from across the country to join. Processor Co-Conspirator 5’s representative emailed Defendant WMS and Processor Co-Conspirators 6, 7, and 18, explaining, ‘‘I was recently told of a committee/group that had gotten together in the past to talk about compensation in the poultry industry. I know we deal with a slightly different bird here at [Processor Co-Conspirator 5] than [Processor Co-Conspirator 6] and probably the majority in your group, but I would be interested in participating in that group if you think it would be appropriate. . . . If you’re open to Midwestern Turkey company participating in this . . . I’d love to be considered.’’ An executive from Processor Co-Conspirator 6 responded, volunteering to send the request to the Steering Committee and noting that participants in the survey ‘‘need[ ] to meet certain requirements that indicate you fit into the data study (ex. Number of plants, etc. . .).’’ After some discussion among Defendant WMS and Processor Co-Conspirators 6, 7, 14, and 18, an executive from Processor CoConspirator 7 noted, ‘‘Traditionally, if they meet the size criteria and there are no ‘naysayers’ from the existing party, they get the welcome handshake, no?’’ 98. In contrast, Meng detailed what occurred when, in 2014, some of the WMS participants considered including ‘‘red meat processing complexes’’ in the survey: the ‘‘processors ultimately rejected that possibility.’’ Meng stated in a sworn declaration to this Court, ‘‘The reason why those processors declined to include the red meat processors in the [WMS Survey Group] is because the poultry processing labor market is distinct from the red meat processing labor market. Several of those processors told me this, and it is also evident to me from my own review of the markets.’’ 5 99. Members of the WMS Survey Group were required to attend each annual in-person meeting as a condition of participating in the compensation collaboration and information-exchange group. If a poultry processor did not attend regularly, it could be kicked out. As an executive for Processor CoConspirator 7 explained, ‘‘Normally, any company that doesn’t participate in 5 Meng filed his declaration before this Court on February 4, 2022 as ECF No. 580–4 in Jien v. Perdue Farms, Inc., 19–cv–2521 (D. Md.). VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 the survey and attend for 2 consecutive years is removed from participation.’’ This policy demonstrates that the opportunity to collaborate in person was an important feature of the WMS Survey Group. b. Compensation Data Exchanged Through WMS Survey Group 100. Attendees at the annual WMS Survey Group in-person meeting brought their current and future, disaggregated, and identifiable compensation data with them. The attendees then discussed that information confidentially. As one 2009 communication from Processor CoConspirator 6 to Defendants Cargill, George’s, Sanderson, and Wayne, Processor Co-Conspirators 1, 4, 7, 15, and 18, and Former Processor CoConspirator 2 put it: ‘‘Hope all are planning to be there for the meeting. Just a reminder to bring you Data manual in case others have questions for you concerning your data. Please be prepared to discuss survey issues, questions, and details with WMS. We will also be sharing information in a round table discussion. These discussions are expected to be kept confidential’’ (emphasis added). 101. As Meng explained, ‘‘In earlier years, the attendees typically brought this data to the roundtable sessions in hard-copy form using large binders. In later years, the attendees brought their laptop computers, which contained all the compensation data in electronic form.’’ 102. Through the WMS Survey Group, the Processor Defendants, facilitated by Defendant WMS, exchanged current and future, disaggregated, and identifiable data about their poultry processing plant worker compensation on an annual basis. The Processor Defendants gave each other accurate, detailed, and confidential information: as Defendant George’s put it, ‘‘The information obtained through participation can’t be overstated.’’ 103. Through a single annual WMS survey or potentially a single in-person meeting, a processor could understand trends in poultry processing plant worker compensation nationwide. This information was especially important to processors competing for workers willing to move, even internationally, for plant work. But the Processor Conspirators also could compare notes on plant compensation in a particular local area to understand, for example, how one processor’s base wage rate for line workers in a particular county compared to a nearby competitor’s. 104. As detailed below, over many years, the poultry processors in the PO 00000 Frm 00010 Fmt 4701 Sfmt 4703 WMS Survey Group used the surveys and in-person meetings to compare planned future raises or changes in plant worker compensation. WMS’s Meng explained that ‘‘members of the [WMS Survey Group] said they wanted to know how much and when their competitors were planning to increase salaries and salary ranges.’’ Comparing processors’ compensation projections from the past year against their actual compensation levels in the current year revealed whether the Processor Conspirators had held to the prior year’s projections, making any deviations from prior exchanged information easily detectible. This ability to check the information shared across time encouraged the participants to submit accurate information, because deviations between projected and actual compensation levels would be apparent. The Processor Conspirators’ sharing of future compensation plans could also have disincentivized them from making real-time compensation changes to better compete against each other, maintaining wages at their projected levels and suppressing wages that might otherwise have risen through natural, dynamic competition. 105. From 2005 through 2017, the WMS survey showed future data, such as the median and average future salary merit increase for each company involved in the survey. From 2006 through 2019, the surveys included an additional column that allowed for easy comparison between the actual current year’s percentage changes and the changes that had been projected in the previous year’s survey. This enabled the survey participants to monitor whether their competitors adhered to the previous year’s forecasts. 106. The Processor Conspirators discussed other compensation information during their face-to-face meetings. A 2015 email from Processor Co-Conspirator 18 to fellow WMS Steering Committee members and Processor Co-Conspirators 6, 7, and 14, stated, ‘‘As you know the survey results do not provide hourly production projected budgets’’—i.e., future compensation information for hourly production line workers—‘‘and this is typically a discussion during the roundtable sessions.’’ Even more explicit is an internal Processor CoConspirator 18 email from 2005, in which one executive explained to another, ‘‘The survey results will be shared at the meeting and we can get the 10th percentile and the other company’s avg minimum of the range. I believe there are other poultry companies paying below our lowest salary. Although it won’t be published in the E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices survey results [the Processor CoConspirator 18 meeting participant] can also informally ask what minimum starting rates are.’’ Again, this email exchange demonstrates that the opportunity to collaborate with their competitors in person was a key feature of the WMS Survey Group. 107. Meng’s presentations at the WMS in-person meetings also featured current compensation information. For example, he explained in his sworn declaration, ‘‘Specifically, those PowerPoint presentations focused on how the compensation data reported in the current year for both salaried and hourly-paid workers compared to the prior year or two years.’’ 108. Further, Meng stated that at the in-person WMS meetings, ‘‘the private roundtable sessions that excluded me involved discussions between members of the [Processor Conspirators] regarding their compensation practices. Those discussions addressed, among other issues, the results of the [WMS surveys], the compensation data that particular individual processors had reported to the Survey, and plans for future compensation rates for salaried and hourly-paid workers.’’ 109. The Group’s 2009 ‘‘Operating Standards’’ provided that each participating poultry processor must ‘‘[a]gree and ensure that shared survey data or other information from discussions will be used and treated in a ‘confidential’ manner and definitely should not be shared with companies not participating in the survey. Failure to meet these requirements will result in immediate removal from the survey group.’’ This condition for joining the WMS Survey Group shows that the participants considered the information exchanged to be nonpublic and restricted to survey participants. 110. Meng willingly participated in the processors’ violation of antitrust law. To help create a false veneer of compliance with the antitrust laws, Meng would occasionally make statements that WMS’s product ‘‘complied with legal requirements.’’ In August 2012, when the Steering Committee decided to make a change to the survey to distribute disaggregated and identifiable data regarding hourly workers, Meng raised a concern that this would not comply with antitrust agency guidance on information exchanges. Rather than forego exchanging this information, the Processor Conspirators on the Steering Committee asked that Meng not mention his concern to the other processors: ‘‘what about just letting them respond as to any concerns as opposed to calling it out?’’ VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 c. WMS Survey Group Exchanges by Year, Defendant, and Type of Information Exchanged in Surveys and In-Person Meetings 111. The following chart lists the Processor Defendants that participated in the WMS Survey Group by year. 34039 compensation by plant; and current and disaggregated benefits information; e. 2017: Future salary information, including the dates and ranges of planned raises in salary by position, confidential information about hourly wages, and current and disaggregated benefits information; and f. 2018–2019: Confidential PROCESSOR DEFENDANTS’ WMS SURcompensation information. VEY GROUP PARTICIPATION BY YEAR 114. As discussed above, from 2001 through 2019, the members of the WMS 2000–2005 Cargill, Sanderson, and Wayne Survey Group met in person annually to 2006–2011 ......... Cargill, George’s, Sanderson, discuss poultry processing plant and Wayne compensation. All participants were 2012–2018 ......... Cargill, George’s, and Wayne instructed by the Steering Committee to 2019 ................... Cargill and Wayne bring their individual compensation data with them to these meetings. From 112. In the remainder of this section, 2001 through 2017, the members of the allegations about events or conduct in WMS Survey Group held roundtable each year of the WMS Survey Group apply to all of the Processor Defendants discussions about compensation participating in the WMS Survey Group practices from which they excluded any third parties, including Meng. In 2018 for that year, except where otherwise and 2019, Meng attended all sessions of noted. 113. From at least 2000 through 2019, the in-person meeting. 115. At these in-person WMS Survey the members of the WMS Survey Group Group meetings, the members of the submitted their confidential compensation data to the WMS-run WMS Survey Group collaborated on, survey and received survey results assisted each other with, and exchanged containing their competitors’ current and future, disaggregated, and confidential compensation data. The identifiable information about types of data gathered and shared compensation for poultry processing changed during the WMS Survey workers, as described below: a. 2007: An ‘‘agenda and group Group’s over-20-year existence. In the discussion topics’’ list for the 2007 following years, the WMS survey WMS Survey Group meeting states ‘‘Are solicited, and the WMS survey results Smoking Cessation Programs included included: a. 2000: Confidential information in your Health benefits? If not, do you about wages, salaries, benefits, and have plans to implement? If currently bonuses related to ‘‘dozens of positions included, please share your schedule of at poultry complexes,’’ including plants, benefits.’’ b. 2008: Later correspondence hatcheries, and feed mills; b. 2001–2004: Current and future, between WMS Survey Group Members disaggregated, and identifiable salary states that at the 2008 WMS Survey and benefits information, as well as Group meeting, ‘‘we discussed current, disaggregated, and identifiable companies that are now charging higher hourly wage information, including insurance premiums for smokers.’’ c. 2011: In 2012, Meng emailed the ‘‘what each member of the [WMS WMS Survey Group members about Survey Group] paid, on average, in notes they had taken at the prior year’s hourly wages to poultry processing in-person meeting, warning them that workers at each of their processing the notes disclosed details that put the plants.’’ The information was processors at risk of having violated the identifiable because the WMS survey antitrust laws. Meng wrote to the included what was ‘‘in effect, a key for processors, ‘‘you reference certain identifying the identity of each poultry positions not included in the survey processor’’; c. 2005–2012: Future salary where ‘we will all agree to contact each information, including the dates and other for general position.’ That ranges of planned raises in salary by comment and action goes against the position, confidential information about Safe Harbor Guidelines.’’ Thus, it hourly wages, and current and appears that during the 2011 meeting, disaggregated benefits information; the Defendants present directly shared d. 2013–2016: Future salary information that violated the antitrust information, including the dates and laws. ranges of planned raises in salary by d. 2015: At the 2015 WMS Survey position; current, disaggregated, and Group meeting, the participants identifiable hourly wage information, discussed ‘‘whether to distribute which enabled participants to determine disaggregated, raw, plant-level data specific competitors’ current hourly concerning hourly-paid workers’’ PO 00000 Frm 00011 Fmt 4701 Sfmt 4703 E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34040 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices through the WMS survey and that ‘‘all members of the [WMS Survey Group] in attendance at the Meeting agreed to the continued distribution of such data.’’ Notes taken at the 2015 WMS Survey Group roundtable meeting by Processor Co-Conspirator 18 record what each participant shared with the group in columns next to each processor’s name. These notes suggest the processors openly and directly shared with each other a wide range of detailed, nonanonymous, and current- or future compensation information, with a special focus on their rates of overtime pay (i.e., pay for the 6th and 7th days of the week): 6 i. Processor Co-Conspirator 3’s column notes, ‘‘6th and 7th day pay $150 flat rate’’; ‘‘Compress scales over 1 yr rate to start rate. Startign in Feb 2015’’; ii. Processor Co-Conspirator 6’s column notes, ‘‘Added seniority pay instead of doing an hourly increase. . . . Rolls w/vacation, up to 6% increase. It is a seniority premium’’; iii. Defendant George’s column notes, ‘‘Staffing plants is a big issue down 290 positions at springdale locations. $500 signing bonus $300 first 30 days $200 30 days’’; iv. Processor Co-Conspirator 14’s column notes, ‘‘NO 6th and 7th incentive’’; v. Processor Co-Conspirator 15’s column notes, ‘‘HOurly bonus program 17K employees’’; vi. Processor Co-Conspirator 17’s column notes, ‘‘6th and 7th day pay for weekly paid freguency $150 or comp day’’; vii. Defendant Wayne’s column notes, ‘‘$200 6th/$300 7th; some facilities if you work in 6 hours you get the full day based base pay’’; viii. Processor Co-Conspirator 2’s column notes, ‘‘$1.00 Attendnance bonus up from $0.25 . . . . Shoulder can earn up to $150 week . . . Benefits—Taking a harder look at their package’’ ix. Processor Co-Conspirator 9’s column—in its sole year of participation in the WMS Survey Group—notes, ‘‘6th/ 7th day up to 6 hours, get 1⁄2 for 4 hours half day’’; x. The column for Processor CoConspirator 18b (now owned by Processor Co-Conspirator 18) notes, ‘‘200 6th 275 7th day.’’ xi. Processor Co-Conspirator 10’s column notes, ‘‘$1.00 Attendance bonus up from $0.25/Negotiated contract $55. 30. .30 3 Yr./. . . . Supervisor offering 5000–8000’’; 6 As described above, all spelling and grammatical errors in documents quoted in this Amended Complaint are sic. VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 xii. The column for Former Processor Co-Conspirator 3, now owned by Processor Co-Conspirator 16, notes, ‘‘Line Team Members want more money; based on survey we are in the middle’’ and ‘‘No Weekend Pay. But will be looking’’; and xiii. Processor Co-Conspirator 13’s column notes, ‘‘Currently does not have Weekend Pay for Supervisors.’’ e. 2017: The 2017 WMS Survey Group meeting marked a turning point for the WMS Survey Group. That year, after the filing of a private antitrust class-action suit in the Northern District of Illinois alleging price-fixing by many participants in the downstream sale of chicken products, the processors and Meng became more concerned about antitrust risk. At least one executive from Processor Co-Conspirator 7—a Steering Committee member—traveled all the way to the 2017 meeting only to learn that his employer’s legal counsel had directed him not to attend the sessions. At the 2017 meeting, the Defendants and Processor Conspirators in attendance ‘‘all agreed,’’ in the words of WMS’s Jonathan Meng, ‘‘that moving forward all questions about future increases would be removed from the survey.’’ 2. Direct Processor-to-Processor Collaboration and Information Exchanges 116. In addition to collaborating on setting compensation for plant workers through the WMS Survey Group, including through in-person meetings that involved direct exchanges of identifiable compensation information, the Processor Conspirators collaborated on and directly exchanged current and future, disaggregated, and identifiable information about plant workers’ wages and benefits. These interactions occurred ad hoc and involved information about both local and nationwide compensation decisions. 117. That the conspirators repeatedly contacted each other to seek non-public competitive information shows the mutual understanding among these Processor Conspirators that they would collaborate with and assist each other on compensation decisions. 118. The relationships poultry processors established with their labor market competitors through groups like the WMS Survey Group created the opportunity to engage in ad hoc direct exchanges of compensation information. By exchanging large amounts of current and future, disaggregated, and identifiable data, the processors collaborated to accumulate a set of industry compensation information they could use to set their workers’ wages PO 00000 Frm 00012 Fmt 4701 Sfmt 4703 and benefits at a nationwide level (for example, to set budgets on plant worker spending across the country) or locally (for example, to determine pay for shoulder cutters in a specific plant). a. Chicken Industry Wage Index (‘‘CHIWI’’) Exchange 119. The collaboration and direct exchanges among processors included a survey that was designed and run by Processor Co-Conspirator 18, the Chicken Industry Wage Index or ‘‘CHIWI.’’ Through this survey, Defendants George’s and Wayne, along with Co-Conspirators 6, 7, 14, 15, 17 and others, exchanged current and future, disaggregated, and identifiable compensation data from 2010 to 2013. The survey results were so disaggregated that they showed wages for each participant’s specific processing plants. Processor CoConspirator 18 disclosed wages by region of the country, as defined by Consultant Co-Conspirator 1, making it easy for the processors to compare the CHIWI results with the current, disaggregated, and identifiable Consultant Co-Conspirator 1 compensation information discussed below. 120. A Processor Co-Conspirator 18 employee described CHIWI to others inside the company in 2013, noting that it was a ‘‘survey with competing poultry companies. With this information, we feel that we are in a better position to strategically evaluate wages on a location by location level.’’ 121. In 2013, Processor CoConspirator 18 transferred the running of CHIWI, which it continued funding, to Defendant WMS. In a February 2013 letter from WMS to Processor CoConspirator 18 describing its planned administration of CHIWI, Meng noted ‘‘WMS will develop the survey document for your approval based upon the templates provided earlier by [Processor Co-Conspirator 18].’’ 122. WMS administered the ‘‘Hourly Survey’’ (the renamed CHIWI) to the WMS Survey Group participants from 2013 to 2015, with all participants in the WMS Survey Group for those years submitting and receiving CHIWI-format compensation data. In 2016, WMS distributed a substantially similar survey of plant-level data for hourly workers along with its 2016 annual survey to Defendants Cargill, George’s, and Wayne and Processor CoConspirators 1, 2, 3, 4, 5, 6, 7, 10, 13, 14, 15, 17, and 18. 123. During Defendant WMS’s administration of the Hourly Survey, WMS assisted Processor Co-Conspirator 18 in identifying some of the Processor E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices Conspirators’ exchanged compensation information presented in WMS surveys. In October 2014, a Processor CoConspirator 18 employee emailed WMS’s Jonathan Meng, asking ‘‘We need to know the number of [Processor Co-Conspirator 15] locations that participated in our last Hrly Prod Maint survey. Can you provide this as soon as you get a chance?’’ Another WMS employee responded to this email that same day, writing ‘‘29 locations were reported by [Processor Co-Conspirator 15].’’ Telling Processor Co-Conspirator 18 the number of locations of another processor’s plants reported in a survey would assist Processor Co-Conspirator 18 in identifying the disaggregated survey results, which were broken out by plant. If Processor Co-Conspirator 18 knew how many plants a given processor had reported, Processor CoConspirator 18 could match the number of plants reported for a specific (anonymized) competing processor to crack the code and identify the processor. 124. Processor Co-Conspirator 18 and Defendants WMS and Meng were cognizant of, and worried about, the antitrust risk posed by CHIWI. After WMS took over the administration of CHIWI, a Processor Co-Conspirator 18 employee requested that Meng remove the note ‘‘Sponsored by: [Processor CoConspirator 18]’’ in the circulated report and replace it with the title ‘‘WMS Poultry Hourly Wage Survey.’’ Meng did not comply with this request, stating that ‘‘I did not want the Poultry Industry Survey Group to conclude that WMS approved of the format of the [Processor Co-Conspirator 18] sponsored survey.’’ On another occasion, Meng explained to Processor Co-Conspirator 18 executives that CHIWI included clear risk factors for a potentially anticompetitive exchange of information, noting that participating poultry processing firms were likely to be able to identify which processor operated which plant based on the details about the plants disclosed in the survey. Despite his warning, the Processor Co-Conspirator 18 executives requested that WMS proceed, and WMS willingly complied. Defendants George’s, Sanderson, and Wayne and co-conspirators including Processor Co-Conspirators 1, 3, 5, 6, 10, 11, 14, and 18, noting ‘‘I understand Paul is out of the country’’—likely a reference to the Director of the Association’s HR and Safety Program— ‘‘so I hope you do not mind me reaching out to you directly. With the news on the new OT rule injunction, I am curious on how you plan to proceed? Wait and see or stay the course for any 12/1/16 plans you have already made?’’ This question was a reference to a court order staying a federal rule mandating a change to overtime pay. Defendant Sanderson’s Human Resource Manager replied, copying all recipients, ‘‘We are in the process of implementing the new wages and I don’t see that we will stop or change it,’’ thus sharing Sanderson’s future wage plans with its competitors directly. 127. In June 2017, the Director of the Association’s HR and Safety Program emailed to Defendants Cargill, George’s, Sanderson, and Wayne; Processor CoConspirators 3, 6, 7, 9, 10, 12, 14, 15, 17, and 18; Consultant Co-Conspirator 1; as well as others, the results of a survey ‘‘on pay ranges of Live Hang employees versus General Production employees,’’ noting that ‘‘sixteen sites’’ participated. The survey questions sought the ‘‘average per hour rate that you pay,’’ meaning the current pay rate, of both Live Hang employees and General Production employees. 128. The U.S. Poultry & Egg Association also conducted in-person meetings between the processor competitors, similar to the WMS Survey Group. In fact, enough participants attended both in-person meetings that in September 2012, Processor CoConspirator 18 and Processor CoConspirator 7 discussed scheduling the WMS Survey Group meeting at the same location and around the same dates as the U.S. Poultry & Egg Association inperson meeting due to ‘‘the people that attend both.’’ In December 2016, Defendant Sanderson attended the U.S. Poultry & Egg Association meeting, four years after Sanderson’s departure from the WMS Survey Group. b. U.S. Poultry & Egg Association Member Processors’ Exchanges 125. Some Processor Conspirators used their involvement with the U.S. Poultry & Egg Association, a nonprofit trade association for the poultry industry, to collaborate with other poultry processors on compensation decisions. 126. In November 2016, Processor CoConspirator 12’s Director of Human Resources emailed, among others, c. Processor Conspirators’ Ad Hoc Direct Exchanges 129. The Processor Defendants also collaborated to exchange and discuss confidential compensation information directly in an ad hoc fashion. These direct exchanges were often between two or three competitors. Some processor-to-processor communications were between senior employees in processors’ corporate offices and concerned nationwide compensation. VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4703 34041 Others were between processor employees at the local plant level, such as exchanges between competing plant managers that were then reported to processor executives at the national level. 130. In January 2009, an employee of Processor Co-Conspirator 14 emailed Defendants Cargill, George’s, Sanderson, and Wayne and Processor CoConspirators 6, 7, 15, and 18, asking, ‘‘I am curious to find out if anyone has (or is in discussions) about postponing plant or merit increases.’’ In addition, in the same email, she noted, ‘‘I know there has been some previous dialogue about plant and merit increases.’’ 131. In September 2013, an employee of Defendant Cargill sent Processor CoConspirator 18 her company’s internal medical leave policy, which included a detailed description of benefits. 132. In January 2015, an employee of Defendant George’s emailed his supervisors to tell them he had spoken with the HR Manager of a particular Processor Co-Conspirator 18 plant, who told him that ‘‘[t]he $13.90 starting pay is for Breast Debone at their Green Forrest facility. The $13.90 is available once they qualify and then they are eligible for incentive pay on top of that. So in fact an experienced Shoulder Cutter could go there and get a $13.90 starting pay rate. He said that the normal starting rate was $10.50 per hour with $0.40 extra of 2nd shift and $0.45 extra for 3rd shift.’’ This George’s employee then mentioned he would contact HR managers at another Processor Co-Conspirator 18 plant, as well as a plant owned by Processor CoConspirator 17. 3. Exchange of Compensation Information Through Consultant CoConspirator 1 133. From at least 2010 to the present, the Processor Defendants also used another data consultant, Consultant CoConspirator 1, to collaborate with each other on compensation decisions through the exchange of current, disaggregated, and identifiable information about their poultry processing plant workers’ wages and benefits, artificially and anticompetitively suppressing this compensation. 134. Consultant Co-Conspirator 1 gathers data from companies and distributes it to paying customers. Consultant Co-Conspirator 1 does not sell this data to the public; its reports are only available to its subscribers. 135. Publicly available information dating from both 2011 and 2020 shows Consultant Co-Conspirator 1 gathered data from over 95 percent of U.S. E:\FR\FM\25MYN2.SGM 25MYN2 34042 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 poultry processors, including all of the Processor Conspirators. Consultant CoConspirator 1 also admitted in Jien (19– cv–2521) that its subscribers have included all of the Processor Conspirators. Thus, it is likely that all Processor Defendants exchanged compensation information through Consultant Co-Conspirator 1 from at least 2010 to present. 136. The data Consultant CoConspirator 1 gathers and sells is current, disaggregated, and identifiable. Consultant Co-Conspirator 1 claims that it can minimize those risks to make this data ‘‘safer’’ to distribute by anonymizing the companies and processing plants for which it reports specific wages and salaries per job role. Although the plants reported in Consultant Co-Conspirator 1’s data reports are not identified by name, they are grouped by region, and the list of all participants in the region is provided. Accordingly, the number of employees and other data provided per plant makes this data identifiable to other processors. 137. Processors are thus likely able to use Consultant Co-Conspirator 1’s data reports to identify the wage and salary rates, as well as benefits, that each of their competitors is currently setting for each of its plants. 138. In addition to permitting competing poultry processors to collaborate on their wages and benefits at the individual plant level, Consultant Co-Conspirator 1’s data reports also provide a means for processors to monitor whether their collaborators are following through on the compensation decisions they reported through the WMS Survey Group and the ad hoc compensation exchanges. 4. Processors’ Collaboration and Assistance on Compensation 139. In a patchwork of different combinations, through different methods, and with respect to different types of compensation information, the Processor Defendants built a pervasive conspiracy across the poultry processing industry to collaborate on, and not merely exchange, poultry processing plant worker wages and benefits information. 140. As described above, many of the Processor Conspirators, including Defendants Cargill, Sanderson, and Wayne, as well as Processor CoConspirators 6, 7, 14, 15, 17, and 18, began exchanging compensation information directly, without involvement from WMS, as long ago as the 1980s. One employee of Processor Co-Conspirator 6 told WMS’s Jonathan Meng that ‘‘executives from each of VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 those poultry processors would meet in a private room and bring enough copies of their salary and wage data to distribute to all the other attendees,’’ and ‘‘the attendees would then exchange and discuss their compensation schedules.’’ According to one participant, these pre-2000 exchanges included an understanding between participants that they would not use the information they exchanged about each other’s salaried compensation to attempt to hire away each other’s salaried employees. This early conspiracy to collaborate helped foster the mutual understanding in which processors agreed to collaborate on, rather than compete over, poultry processing plant worker compensation. 141. In December 2008, for example, an executive at Processor CoConspirator 4 emailed Defendants Cargill, George’s, Sanderson, and Wayne and Processor Co-Conspirators 6, 7, 8, and 14, seeking details of each competitor’s dental plan benefits, which her company was ‘‘currently reviewing.’’ The Processor CoConspirator 4 executive made clear that her company would use the information provided by its competitors to shape its own compensation decisions, explaining that ‘‘[y]our responses to the questions below would greatly help us ensure we stay competitive within the industry.’’ The questions she included related to eligibility for coverage, services included in the plan, ‘‘annual deductible,’’ and ‘‘annual max per person.’’ 142. In September 2009, an executive at Defendant Wayne emailed Defendants Cargill, George’s, and Sanderson and Processor Co-Conspirators 6, 7, 14, 15, and 18 informing them that ‘‘[i]t’s that time of year already’’ because Wayne was ‘‘working on 2010 budget increase recommendations.’’ The executive then asked Wayne’s competitors to send future, disaggregated, directlyexchanged (and thus identifiable) compensation information: ‘‘What is your companies projected salary budget increase recommendation for 2010?’’ Later in this email chain to the same group, the Wayne executive noted that her colleague’s ‘‘sanity is depending on your response. Seriously—any info you can give us will be helpful, we appreciate your help.’’ Defendant George’s and Processor Co-Conspirator 14 both responded to this email chain with their competitors and directly disclosed a projected (future) recommendation to increase their budgets for salaries by three percent. 143. In July 2015, an executive for Processor Co-Conspirator 14 emailed her peers at Defendant Sanderson and PO 00000 Frm 00014 Fmt 4701 Sfmt 4703 Processor Co-Conspirator 18, explaining that Processor Co-Conspirator 14 was ‘‘in the midst of completely revamping our Plant Management Trainee program.’’ Her email continued, ‘‘and I was wondering if you would be willing to share with me . . . what your starting rate is for these kids hired right out of college?’’ The Processor Co-Conspirator 14 employee sought current, disaggregated, and identifiable wage information from her competitors for the explicit purpose of assisting Processor Co-Conspirator 14 to make its own wage decisions for this cohort. Her peer at Sanderson responded the very next day to both Processor Co-Conspirator 14 and Processor Co-Conspirator 18, disclosing, among other information, that Sanderson’s Beginning Trainee Program paid ‘‘from 36,000 to 38,000, no signing bonuses’’ and that Sanderson’s Advance Trainee program paid ‘‘from $48,000 to $87,000, no signing bonuses.’’ 144. In February 2016, the Director of Compensation at Processor CoConspirator 4 emailed Defendants Cargill, George’s, and Wayne, as well as Processor Co-Conspirators 3, 6, 7, 14, 15, 17, and 18. She thanked a Wayne employee and noted, ‘‘that reminded me that I had a question for the group also. We are trying to determine what is reasonable for salaried employee to be compensated for working 6 and/or 7 days in a work week when the plant is running.’’ The questions she asked included ‘‘Do you pay extra for these extra days worked for salaried (exempt) employees?’’ and ‘‘If so, how is that calculated?’’ The statement that Processor Co-Conspirator 4 was in the midst of ‘‘trying to determine’’ overtime pay decisions, and wanted to know what its competitors did in the same circumstances, likely made clear to the recipients that Processor Co-Conspirator 4 planned to use the information it gathered in its own decision-making. An employee from Processor CoConspirator 10 responded to all recipients, noting, ‘‘We pay 1⁄5 of the weekly salary for the sixth and seventh days if working due to production. This includes supervisors and managers below the plant manager level and all are paid the same. If the day off is compensated by a paid benefit, other than sick time, we pay the sixth and seventh days. Sanitation and maintenance only get paid for the seventh day worked.’’ 145. In September 2016, an executive from Processor Co-Conspirator 7 sought future compensation information from Defendants Cargill, George’s, and Wayne and Processor Co-Conspirators 3, 6, 14, 15, 17, and 18 related to a new Fair Labor Standards Act salary threshold for E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices exempt status, a federal requirement determining to which workers the processors would have to pay overtime wages based on salary. The Processor Co-Conspirator 7 executive asked his competitors to fill out a directlyexchanged survey form to indicate how they would change compensation plans for all employees and, more specifically, for first-line supervisor roles. Within a week, Defendants Cargill and George’s and Processor Co-Conspirators 6, 15, and 17 responded by sharing their future compensation plans, which the Processor Co-Conspirator 7 executive passed on (labeled by processor) to the entire group, reflecting, ‘‘If more respond, I’ll republish, but the target grouping pattern already appears pretty tight.’’ 146. The chart attached to the executive’s email showed that eight of the ten processors selected ‘‘most employees are receiving base salary increases to bring them to the threshold salary,’’ thus ending the processors’ obligation to provide these workers with overtime pay, and ‘‘a smaller number will not receive a base increase but will receive overtime.’’ Similarly, eight of the ten respondents selected, as to the first-line supervisors, ‘‘are either above the salary threshold or will receive a base salary increase to the threshold.’’ 147. The Processor Defendants’ collaboration also involved forms of compensation other than wages. In January 2010, an executive for Processor Co-Conspirator 18 wrote to Defendants Cargill, George’s, Sanderson, Wayne, and WMS and Processor CoConspirators 6, 7, 15, and 17 for help because Processor Co-Conspirator 18 was ‘‘considering a change to convert’’ some of its plant worker jobs to a category that would provide them with fewer benefits: ‘‘Production workers on the line do not get quite the same as our technical support jobs, nurses and clerical. The difference is 5 days daily sick pay, better vacation schedule, higher short-term disability pay and the ability to use our flexible (pre-tax) benefits saving plan.’’ Processor CoConspirator 18 noted that a ‘‘prompt response would be much appreciated’’ from its competitors about whether ‘‘any of you have a difference in benefits between’’ these two job categories, to assist it in making this decision. Processor Co-Conspirator 7 responded to Processor Co-Conspirator 18’s question, stating it did not. 148. A 2015 email exchange between Defendant George’s and Processor CoConspirator 18 provides detail on how the competitors may have viewed their relationships with each other as collaborators. On October 6, 2015, VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 Processor Co-Conspirator 18 received an email from a George’s executive asking, ‘‘Would you mind sending me your current Health Insurance Rates? Also do you plan on raising them in 2016? Thanks you so much for your help.’’ Processor Co-Conspirator 18 then discussed this request internally, noting, ‘‘We don’t count on them [George’s] for much so we don’t owe them anything from our side.’’ This view of the request for future and directly exchanged compensation information as part of a quid pro quo calculation—that to get the helpful information, you have to give the helpful information—helps explain why the competing processors were so willing to share compensation information when their competitors asked for it. 149. In designing the WMS survey, the WMS Survey Group participants collaborated to ensure the exchanged data included the type of disaggregated compensation information that antitrust agencies warned against as a risk factor for identifying information exchanges not designed in accordance with the antitrust laws. For example, in 2012, the Steering Committee, which then included Processor Co-Conspirators 6, 7, 14, 15, and 18, decided to distribute disaggregated and identifiable data regarding hourly plant workers. WMS’s Jonathan Meng warned the Steering Committee that distributing this data would violate the guidance and proposed ways of presenting the data that would make it less identifiable. Processor Co-Conspirator 18, however, instructed Meng to let the WMS survey group know of the change to the survey design but not to ‘‘call out’’ Meng’s concerns. Meng followed Processor CoConspirator 18’s instructions and simply advised the Survey Group of the changes, stating that ‘‘The Steering Committee has requested that the hourly wage information included in the report be expanded to include the raw data for each state. . . . The steering committee needs to know if you are in agreement with the proposed changes.’’ Meng noted that under this plan, which he asked each WMS Group Participant to agree to explicitly, he would include disaggregated, identifiable wage data from Alabama, Arkansas, Georgia, Missouri, Mississippi, North Carolina, Tennessee, and Virginia. Later, Meng stated that ‘‘everyone is in agreement with the change except [Processor CoConspirator 4] and [Processor CoConspirator 13], who have not responded yet.’’ 150. The WMS Survey Group participants, competitors in the market for poultry processing plant labor, also collaborated to standardize the job PO 00000 Frm 00015 Fmt 4701 Sfmt 4703 34043 categories for which they each reported compensation data, ensuring they could match each other’s compensation decisions. The Processor Defendants also may have worked, with assistance from Defendant WMS, to standardize job types and categories across their different enterprises. This made a comparison between each participant’s jobs easier, and thus made the information swapped about each job category’s compensation more accessible for use. With respect to salaried positions, the annual survey questionnaire was intended to permit participants to match all jobs to defined job categories while indicating when the matched job was, in the view of the participant, ‘‘larger’’ or ‘‘smaller’’ than the job as described in the questionnaire. Survey results reported the percentages of respondents indicating inexact job matches. In 2012, an employee for Processor CoConspirator 14 employee described in an email to a Processor Co-Conspirator 18 employee the prior year’s WMS Survey Group in-person meeting, at which ‘‘the discussion around the room was that some companies call this single incumbent job a Plant Safety Manager and some a Complex Safety Manager.’’ This standardization for purposes of collaboration, enabled by WMS, made it easier for the Processor Defendants to determine and monitor consensus among themselves for compensation, enabling their conspiracy, which suppressed compensation. 5. Processors Recognize Their Agreement Likely Violated the Antitrust Laws and Attempt To Cover It Up 151. The Defendants at times expressed concern that their agreement was unlawful. Sometimes, fear of discovery or other outside events prompted them to change their views of the risk they were each engaged in. Nonetheless, they maintained secrecy throughout the conspiracy. 152. On February 14, 2012, Defendant Sanderson’s HR Manager emailed Defendants Cargill, George’s, and Wayne and Processor Co-Conspirators 7, 15, and 17 along with Defendant WMS, notifying them that Sanderson would be ending its relationship with the WMS Survey Group. The HR Manager stated, ‘‘On the advice of legal counsel, our Executives have decided that we can no longer participate in this type of survey.’’ If the Defendants had not been previously aware of the legal risk involved in the WMS Survey Group exchange, this email put them on notice. 153. Private class actions related to this conduct and other allegedly anticompetitive behavior in the poultry E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34044 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices industry caused the members of the WMS Survey Group to change some of their behavior. As noted above, at their 2017 in-person meeting, the participating Processor Conspirators, in the words of WMS’s Jonathan Meng, ‘‘all agreed that moving forward all questions about future increases would be removed from the survey. . . . It was also recommended by counsel for [Processor Co-Conspirator 7] to have an Antitrust Attorney present for the general group discussions (post survey results).’’ 154. As Processor Co-Conspirator 7 described in October 2017, the Processor Conspirators would thereafter treat Meng as an ‘‘Antitrust Guidon.’’ In military terminology, a guidon is a flag flown at the head of a unit to signify that the commander is present. An executive at Defendant George’s put it more bluntly, commenting that ‘‘One thing that has changed is that the group will now have an attorney present for the full meeting to make sure no collusion and that the Safe Harbor provisions are all met and followed.’’ Meng acknowledged in January 2018 to an executive for Processor Co-Conspirator 17 that ‘‘I will be present at all sessions this year (which did satisfy [Processor Co-Conspirator 7’s] counsel).’’ 155. But Meng’s presence at meetings did not ultimately quell the Processor Conspirators’ fears that their conduct was unlawful. From 2017 to 2020, spooked processors began dropping out of the WMS Survey Group due to, as an employee of Processor Co-Conspirator 14 put it, ‘‘the ‘big scare’ ’’—i.e., a private class action alleging a broiler chickens price-fixing conspiracy. 156. In response to the elimination of disaggregated data from the survey, an executive for Processor Co-Conspirator 7 complained, ‘‘how useful is the ‘average rate report’ now anyway? It has suffered significant obscuring of results due to aggregating, and I would ask—Is it still useful information any longer?’’ 157. Processor Co-Conspirator 13 left in 2018; that year, Defendant Wayne also considered leaving, but decided to remain in the group after heavy lobbying by Meng. Defendant George’s and Processor Co-Conspirators 1 and 17 left in 2019. 158. In a 2019 email, an executive for Processor Co-Conspirator 7 noted that Defendant ‘‘Georges was skittish very early on in the anti-trust concerns, including their attorneys contacting other companies to warn about attending our conference.’’ 159. In July 2019, an executive from Processor Co-Conspirator 7 sent an alert to Processor Co-Conspirator 14 and WMS describing a call his colleague VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 received ‘‘from someone representing themselves as a private investigator from New York. The caller had questions about the types of information we shared at our meeting, the survey and other questions that I will simply call ‘general anti-trust fishing’ questions. . . . So just a little reminder that the bad-guys are still out there, and why we hold strict confidences about discussing wages—and have Jon [Meng] at our entire meeting.’’ Notably, the Processor Co-Conspirator 7 executive did not say the competing processors should take care not to discuss wages, but rather take care to keep such discussions in ‘‘strict confidence.’’ 160. And if there were any question whom the WMS participants considered the ‘‘bad-guys,’’ Defendant WMS’s presentation for the 2019 WMS Survey Group meeting features, at the top of the presentation’s first slide, a quote from Shakespeare: ‘‘The first thing we do, let’s kill all the lawyers.’’ 161. The WMS Survey Group did not meet again after this 2019 meeting. C. Defendants Sanderson’s and Wayne’s Deceptive Practices Toward Growers 162. Growers sign contracts with Sanderson and Wayne, respectively, to raise chickens. Growers often make substantial financial investments including building or upgrading their facilities. The success of those investments depends on the compensation system they receive. 163. Under the compensation system known as the tournament system, each contract provides an average or base price that the grower receives. But the average or base price is not necessarily what the grower actually receives. The growers’ compensation depends on how each grower performs relative to other growers—in particular, on their performance relative to other growers at converting the inputs to bird weight. Growers who overperform the average are paid a bonus, while those that underperform the average are penalized. Sanderson and Wayne, however, control the major inputs the grower receives, including the chicks and feed. As a result, growers cannot reasonably assess the range of expected financial outcomes, effectively manage their risks, and properly compare contracts from competing processors. 164. Sanderson and Wayne do not adequately disclose the risk inherent in this system to the growers. Their contracts with growers omit or inadequately describe material key terms and risks that mislead, camouflage, conceal, or otherwise inhibit growers’ ability to assess the financial risks and expected return on PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 investment. For example, the grower contracts disclose neither the minimum number of placements nor the minimum stocking density that the grower is guaranteed. The contracts also lack material financial disclosures regarding poultry grower performance, including the range of that performance, and other terms relevant to the financial impact of the grower’s investment. 165. Similarly, the contracts omit material information relating to the variability of inputs that can influence grower performance, including breed, sex, breeder flock age, and health impairments, on an ongoing basis, including at input delivery and at settlement (including information to determine the fairness of the tournament). Without this information, growers are impaired in their ability to manage any differences in inputs, or evaluate whether to invest in new infrastructure, that may arise from the Sanderson’s and Wayne’s operation of the tournament system. This failure to disclose is deceptive and violates the Section 202(a) of the Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 192(a). These deceptions should be enjoined. VI. Elements of the Sherman Act Claim A. The Agreement To Collaborate on Compensation Decisions, Exchange Compensation Information, and Facilitate Such Collaboration and Exchanges 166. As detailed above, the Processor Defendants collaborated on what should have been independent decisions about poultry processing plant worker compensation. As reflected by in-person meetings, correspondence, and the regular exchange of compensation information, the Processor Defendants and their co-conspirators had a mutual understanding that they would contact each other for advice, discussion, and competitively-sensitive compensation information to help each other make decisions about worker compensation at the nationwide and local level. This agreement undermined the competitive process, distorted the ordinary, freemarket bargaining and compensationsetting mechanisms, and suppressed competition and compensation for poultry processing plant workers. 167. The Processor Defendants’ exchanges of current and future, disaggregated, and identifiable information about poultry processing plant worker wages and benefits, through the facilitation provided by the Consultant Defendants and through direct exchanges with each other, supported this conspiracy to E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 collaborate. However, even standing alone, these exchanges allowed each participant to more closely align its wage and benefit offerings with its competitors, harmed the competitive process, distorted the competitive mechanism, and suppressed competition and compensation for their poultry processing plant workers. B. Primary Poultry Processing Plant Employment Is a Relevant Labor Market 168. The market for primary poultry processing plant labor is a relevant antitrust labor market. If a single employer controlled all the primary poultry processing plant jobs in a geographic market, it could profitably suppress compensation (either in wages or benefits) by a small but significant and non-transitory amount. In other words, if a poultry processing employer with buyer market power (monopsony power) chose to reduce or forgo raising its workers’ wages and benefits, or otherwise worsen the compensation offered to workers, too few poultry processing workers would switch to other jobs to make the employer’s choice unprofitable. 169. Labor markets are inextricably connected to the most personal choices workers make: how and where to live, work, and raise a family. In labor markets, employers compete to purchase labor from a pool of potential and actual workers by setting wages, benefits, and working conditions. 170. In choosing among potential employers, workers who may be different from each other—for example, who fill different types of jobs—may be similarly positioned with respect to potential employers. While hourly and salaried poultry processing jobs may attract different job applicants, poultry processing plants may constitute potential employers for those workers because of commonalities shared among hourly and salaried workers (and among workers filling different roles within those categories). 171. To poultry processing plant workers, all of the Processor Conspirators are close competitors for their labor. From the perspective of workers, poultry processing jobs are distinguishable from, and not reasonable substitutes for, jobs in other industries. Many processing plant workers share common constraints that make poultry processing plant jobs accessible to them while other yearround, full-time jobs are not. Poultry processing plant workers also share common attributes and learn jobspecific skills, which the poultry industry compensates more than other industries would. Thus, these particular VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 employers compete to offer jobs to this pool of labor that these workers both have access to and that offer value for their common attributes in a way that other industries might not. Many of these workers are able to find work in the poultry industry but not in other industries that seek workers with different skills, experience, and attributes. 172. Although poultry processing plants employ varied types of workers, they occupy a common labor market. All the workers were the target of a single overarching information-sharing conspiracy. All the workers have thus had their compensation information distributed without their consent by their employer to other employers who might hire them. All the workers have developed experience, familiarity, and expertise in poultry processing plants, and all or nearly all the workers have located their households near poultry processing plants, acquired friends or colleagues in poultry plants, and have or have developed the types of personal characteristics that enable them to tolerate the harsh conditions of poultry processing plants. As a result, workers who are unsatisfied with their current employer would normally seek, or at least consider, alternative employment in the poultry processing plants owned by their employer’s co-conspirators. 173. Each of the Processor Conspirators sees poultry processing workers as sufficiently alike to find it worthwhile to place them in a common worksite, creating a cluster of jobs associated with particular market activity (poultry processing), just as grocery stores sell multiple products to customers who prefer the convenience of one-stop shopping. The common characteristics of the employees as required by the logistics of processing poultry explain why Defendants treat the employees together in the conspiracy. For these reasons, it is appropriate to consider all the poultry processing workers as a common group of harmed parties for the purpose of this action, even though the jobs in poultry processing plants differ. 174. Both chicken processing plants and turkey processing plants compete to purchase labor in this market because the jobs they seek to fill are similar. These industries use similar facilities, materials, tools, methods, job categories, and vertically-integrated processes to produce downstream products. These industries also exhibit similar difficult working conditions. 175. In addition, the poultry industry itself recognizes that poultry processing workers are a distinct market. The Processor Defendants’ and Processor PO 00000 Frm 00017 Fmt 4701 Sfmt 4703 34045 Conspirators’ agreement to collaborate on compensation decisions included the exchange of information about both hourly and salaried plant jobs. The WMS Survey Group set criteria for membership that permitted both chicken and turkey processors to participate, but not other meat processors or other employers. When one member of the WMS Survey Group proposed including processors of red meat, this idea was rejected by the group because, according to Defendant Jonathan Meng, as he was informed by members of the WMS Survey Group, ‘‘the poultry processing labor market is distinct from the red meat processing labor market.’’ Informed by their knowledge and experience, the Processor Conspirators chose to include poultry processors in the WMS Survey Group and exclude other industries. C. The Geographic Markets for Poultry Processing Plant Labor 176. The relevant geographic markets for poultry processing plant labor include both local submarkets and a nationwide market. 177. Local markets for poultry processing plant labor are relevant geographic markets. Many poultry processors adjust wages and benefits at a local level and based on local factors, meaning that a particular processor’s compensation for job categories between different plants in different locations may differ. The Processor Conspirators made decisions affecting competition and competed on a local basis. Poultry processing workers reside within commuting distance from their plants. 178. The Processor Conspirators’ anticompetitive agreement to collaborate on compensation decisions included the exchange of local data through the Consultant Defendants and Consultant Co-Conspirator 1 and the direct exchange of such data with the other Defendants and co-conspirators. For example, as Processor CoConspirator 18 noted in describing the CHIWI survey, ‘‘With this information, we feel that we are in a better position to strategically evaluate wages on a location by location level.’’ 179. Employed poultry processing plant workers reside within commuting distance from the plant at which they work. In addition, many applicants to these jobs reside within commuting distance from the plant to which they have applied, at the time they have applied. Thus, if multiple processing plants are located within a worker’s commuting boundary, those plants are potential competitors for that worker’s labor. E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34046 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices 180. The relevant local submarkets can be identified according to workers’ willingness and ability to commute. The local submarkets here are those in which, according to data from the United States Department of Agriculture, at least two Processor Conspirators compete with each other for primary poultry processing plant workers. In these relevant local submarkets, it is likely that the Processor Conspirators together hold market power, because they control over 80 percent, and in many local submarkets, control 100 percent, of primary poultry processing plant jobs. A hypothetical monopsonist of poultry processing plant labor jobs in each local labor submarket would likely be able to suppress compensation for poultry processing plant workers by a small, but significant, amount. 181. The local labor submarkets in which the Processor Defendants and Processor Conspirators have suppressed competition, which suppressed poultry processing plant workers’ compensation, include: a. the ‘‘Eastern Shore Poultry Region’’: containing eleven primary poultry processing facilities 7 in Hurlock, MD; Salisbury, MD; Princess Anne, MD; Harbeson, DE; Millsboro, DE; Selbyville, DE; Georgetown, DE; Milford, DE; Norma, NJ; Accomac, VA; and Temperanceville, VA, four of which are owned by Processor Co-Conspirator 14, five of which are owned by other Processor Conspirators, and two of which are owned by other poultry processors; b. the ‘‘Central Valley Poultry Region’’: containing three primary poultry processing facilities in Fresno, CA and Sanger, CA, two of which are owned by Processor Co-Conspirator 7, and one of which is owned by another Processor Conspirator; c. the ‘‘West-Central Missouri Poultry Region’’: containing two primary poultry processing facilities in California, MO and Sedalia, MO, one of which is owned by Defendant Cargill, and one of which is owned by another Processor Conspirator; d. the ‘‘Ozark Poultry Region’’: containing nineteen primary poultry processing facilities in Huntsville, AR; Ozark, AR; Springdale, AR; Fort Smith, AR; Clarksville, AR; Dardanelle, AR; Green Forest, AR; Waldron, AR; Danville, AR; Carthage, MO; Cassville, MO; Southwest City, MO; Monett, MO; 7 The number of primary poultry processing facilities in the Amended Complaint is based on data from the United States Department of Agriculture on chicken and turkey slaughtering from 2022 and excludes facilities designated as ‘‘Very Small.’’ VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 Noel, MO; Heavener, OK; and Jay, OK, two of which are owned by Defendant George’s, one of which is owned by Processor Co-Conspirator 17, one of which is owned by Defendant Wayne, one of which is owned by Defendant Cargill, thirteen of which are owned by other Processor Conspirators, and one of which is owned by another poultry processor; e. the ‘‘Ouachita Poultry Region’’: containing five primary poultry processing facilities in De Queen, AR; Grannis, AR; Hope, AR; Nashville, AR; and Broken Bow, OK, one of which is owned by Processor Co-Conspirator 15, and four of which are owned by another Processor Conspirator; f. the ‘‘East Texas Poultry Region’’: containing four primary poultry processing facilities in Lufkin, TX; Nacogdoches, TX; Carthage, TX; and Center, TX, two of which are owned by Processor Co-Conspirator 15, and two of which are owned by another Processor Conspirator; g. the ‘‘River Valley Poultry Region’’: containing three primary poultry processing facilities in Union City, TN; Humboldt, TN; and Hickory, KY, one of which is owned by Processor CoConspirator 15, and two of which are owned by another Processor Conspirator; h. the ‘‘Western Coal Fields Poultry Region’’: containing two primary poultry processing facilities in Cromwell, KY and Robards, KY, one of which is owned by Processor CoConspirator 14, and one of which is owned by another Processor Conspirator; i. the ‘‘North/South Carolina Poultry Region’’: containing seven primary poultry processing facilities in Lumber Bridge, NC; Rockingham, NC; Marshville, NC; St. Pauls, NC; Monroe, NC; and Dillon, SC, two of which are owned by Processor Co-Conspirator 14, two of which are owned by Processor Co-Conspirator 15, one of which is owned by Defendant Sanderson, two of which are owned by other Processor Conspirators, and one of which is owned by another poultry processor; j. the ‘‘Northern Georgia Poultry Region’’: containing eleven primary poultry processing facilities in Cornelia, GA; Murrayville, GA; Gainesville, GA; Athens, GA; Canton, GA; Ellijay, GA; Cumming, GA; Bethlehem, GA; Marietta, GA; and Pendergrass, GA, two of which are owned by Processor CoConspirator 7, four of which are owned by Processor Co-Conspirator 15, one of which is owned by Defendant Wayne, two of which are owned by other Processor Conspirators, and two of PO 00000 Frm 00018 Fmt 4701 Sfmt 4703 which are owned by other poultry processors; k. the ‘‘Central Georgia Poultry Region’’: containing two primary poultry processing facilities in Perry, GA and Vienna, GA, one of which is owned by Processor Co-Conspirator 14, and one of which is owned by another Processor Conspirator; l. the ‘‘Chattanooga Poultry Region’’: containing two primary poultry processing facilities in Chattanooga, TN, one of which is owned by Processor CoConspirator 15, and one of which is owned by another Processor Conspirator; m. the ‘‘Central North Carolina Poultry Region’’: containing two primary poultry processing facilities in Sanford, NC; and Siler City, NC, one of which is owned by Processor CoConspirator 15, and one of which is owned by another Processor Conspirator; n. the ‘‘Southern Alabama/Georgia Poultry Region’’: containing seven primary poultry processing facilities in Enterprise, AL; Dothan AL; Jack AL; Union Springs AL; Bakerhill, AL; Montgomery AL; and Bluffton, GA, one of which is owned by Processor CoConspirator 15, three of which are owned by Defendant Wayne, two of which are owned by other Processor Conspirators, and one of which is owned by another poultry processor; o. the ‘‘Northern Alabama Poultry Region’’: containing eleven primary poultry processing facilities in Guntersville, AL; Russellville, AL; Albertville, AL; Decatur, AL; Blountsville, AL; Collinsville, AL; Gadsden, AL; Jasper, AL; Cullman, AL; and Tuscaloosa AL, two of which are owned by Processor Co-Conspirator 15, two of which are owned by Defendant Wayne, five of which are owned by other Processor Conspirators, and two of are owned by other poultry processors; p. the ‘‘Western North Carolina Poultry Region’’: containing four primary poultry processing facilities in Dobson, NC; Wilkesboro, NC; Morganton, NC; and Winston-Salem, NC, one of which is owned by Defendant Wayne, two of which are owned by other Processor Conspirators, and one of which is owned by another poultry processor; q. the ‘‘Virginia/West Virginia Poultry Region’’: containing eight primary poultry processing facilities in Timberville, VA; Moorefield, WV; Dayton, VA; Edinburg, VA; Harrisonburg, VA; New Market, VA; and Hinton, VA, one of which is owned by Defendant Cargill, two of which are owned by Defendant George’s, two of which are owned by Processor Co- E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices Conspirator 15, two of which are owned by other Processor Conspirators, and one of which is owned by other poultry processors; r. the ‘‘Laurel Poultry Region’’: containing six primary poultry processing facilities in Collins, MS; Laurel, MS; Hattiesburg, MS; Bay Springs, MS: and Moselle MS, two of which are owned by Defendant Sanderson, one of which was owned by Defendant Wayne until 2021 and is now owned by another Processor Conspirator, one of which is owned by another Processor Conspirator, and at least two of which are owned by other poultry processors; and s. the ‘‘Southern Georgia Poultry Region’’: containing three primary poultry processing facilities in Moultrie, GA; Camilla, GA; and Bluffton, GA, one of is was owned by Defendant Sanderson, one of which is owned by another Processor Conspirator, and one of which is owned by another poultry processor. 182. The United States is also a relevant geographic market for primary poultry processing plant labor. Poultry processing plant jobs outside the United States are not reasonable substitutes for workers seeking employment in the United States. 183. Many poultry processors make significant compensation decisions at a nationwide level. The executives in charge of such decisions often set nationwide policies or budgets for processors’ wages and benefits. These nationwide decisions then influence local decisions, such as setting different wage base rates between particular local plants. At least one Processor Conspirator, Defendant Sanderson, sets its processing plant workers’ wages at a nationwide level, meaning workers in the same position at different plants in different local areas receive the same base compensation. 184. Poultry processors also sometimes recruit workers from beyond the local regions where particular plants are located. For example, they may make use of their current workers’ personal connections to recruit their friends or family members internationally, such as by giving referral bonuses to current workers. And some workers move between states or internationally to take processing plant jobs. 185. The Processor Defendants also viewed themselves as part of a nationwide market for poultry processing plant work. They gave significant time, expertise, and money over at least two decades to participate in the nationwide WMS Survey Group, including traveling to Florida (or VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 another resort destination) to meet in person and swap compensation information about both hourly and salaried workers with poultry processors from across the country. The Steering Committee of the WMS Survey Group restricted the Group’s membership to poultry processors with at least three plant locations nationwide. 186. Informed by their knowledge of and experience with their labor pool of potential and actual poultry processing plant workers, the Processor Conspirators chose to compose the WMS Survey Group to include poultry processors nationwide. The Processor Conspirators are not likely to have wasted their time and money on useless information exchanges. Thus, the Processor Conspirators, with the help of Defendants WMS and Meng and Consultant Co-Conspirator 1, formed their agreement to collaborate on compensation decisions, including through the anticompetitive exchange of compensation information, at a nationwide level. 187. The Processor Conspirators together control more than 90 percent of poultry processing plant jobs nationwide. A hypothetical monopsonist of poultry labor jobs nationwide would likely be able to suppress compensation for poultry workers by a small, but significant, amount. D. Market Power 188. Together, the Processor Conspirators control over 90 percent of poultry processing plant jobs nationwide; the four largest of the Processor Conspirators control about half of that share. The Processor Conspirators also control at least 80 percent of poultry processing jobs in relevant local submarkets. 189. Further, many poultry processing plants are located in rural areas near poultry grower operations. The processors likely have even greater buyer market power in these markets, in which there are often fewer full-time, year-round jobs available than in more heavily populated areas. 190. Finally, the nature of labor markets generally means employers have market power at far lower levels of market share than the Processor Conspirators have here. Labor markets are matching markets—employees cannot simply switch jobs like a customer switches from one beverage to another. Finding a new job takes time, effort, and often, money. The new employer has to offer the job to the worker, while the employee must overcome the inertia provided by an PO 00000 Frm 00019 Fmt 4701 Sfmt 4703 34047 existing job, even if it is an unfavorable one, to seek out and find, interview for, and accept the new job. Employees often have less freedom to move to take a new job due to family commitments such as their spouse’s employment, their children’s education, or the need to provide care to family members. Thus, workers are more likely to stay in the jobs they already have than consumers are to continue to buy the same product; labor markets come with a level of ‘‘stickiness’’ that many product markets do not. E. Anticompetitive Effects: Processor Conspirators’ Conspiracy Anticompetitively Affected Decisions About Compensation for Plant Processing Workers 191. The Processor Conspirators’ pervasive and decades-long conspiracy and anticompetitive exchange of current and future, disaggregated, and identifiable information, facilitated and furthered by the Consultant Defendants, suppressed compensation for poultry processing plant workers nationwide. This anticompetitive agreement distorted the competitive mechanism for wage-setting and robbed poultry processing plant workers of the benefits of full and fair competition for their labor. 192. In labor markets, reductions to absolute compensation are unusual. Thus, the anticompetitive effects of agreements in such markets are most likely to be reflected in compensation remaining flat or increasing at a lower rate than would have occurred without the anticompetitive conduct. 193. The Processor Defendants’ anticompetitive information sharing about poultry processing plant worker compensation supported their larger conspiracy to collaborate with competitors on their own compensation decisions. Both their broader conspiracy to collaborate and their information sharing suppressed competition among them and led to compensation that was lower than it would have been without either the larger conspiracy or the information sharing alone. 194. As the Processor Defendants themselves admitted to each other in emails, they used the current and future, disaggregated, and identifiable compensation data they exchanged directly and through consultants when making compensation decisions company-wide and for specific positions and plant locations. Because the shared information allowed the Processor Defendants to understand how their competitors currently compensated plant workers, or were planning to in the future, the E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34048 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices information they exchanged allowed the Processor Defendants to offer lower compensation than they would have had to absent their agreement. The Processor Defendants’ collaboration distorted the typical competitive process in which they would have had to fully and fairly compete by making their own independent choices about what wages and benefits to offer workers. 195. Further, because of the length of time the Processor Defendants were able to engage in their conspiracy and their financial interest in keeping their labor costs below competitive levels, they are likely to continue collaborating and exchanging compensation information unless they are enjoined from doing so. 196. Conduct by multiple Defendants in 2009 illustrates the types of effects likely to have occurred as a result of the Defendants’ conduct. 197. In January 2009, an executive at Processor Co-Conspirator 14 emailed Defendants Cargill, George’s, Sanderson, and Wayne and Processor CoConspirators 6, 7, 15, and 18 seeking her competitors’ help on the question of ‘‘plant and merit increases’’ for the next year. She described to her competitors that ‘‘Our fiscal year begins 03/30/09, and, we have recently started talking about delaying.’’ She asked these competitors, ‘‘I am curious to find out if anyone has (or is in discussions) about postponing plant or merit increases.’’ In addition, in the same email, she noted, ‘‘I know there has been some previous dialogue about plant and merit increases.’’ This correspondence both makes clear that Processor Co-Conspirator 14 was seeking its competitors’ assistance in making its own wage decisions and suggests that the competitors had held similar discussions before. The Processor Co-Conspirator 14 executive sent her email directly in response to a question from an executive for Processor Co-Conspirator 6 about making travel and scheduling arrangements to meet in person for the annual WMS Survey Group meeting. 198. In July 2009, a strikingly similar discussion took place between Defendant George’s and Processor CoConspirators 17 and 18. George’s Vice President of Human Resources emailed at least two of George’s competitors, Processor Co-Conspirator 17 and Processor Co-Conspirator 18, disclosing to Processor Co-Conspirator 17 that ‘‘we are working on budgets for our next fiscal year. . . . We are looking at a raise in September/Oct. and have not decided on the amount yet . . . we’re surveying the other poultry companies to get a feel for what they are going to VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 do.’’ As a result, he asked Processor CoConspirator 17, ‘‘Do you know what [Processor Co-Conspirator 17] is planning on giving in the way of % or $ amount for your processing plants? What month will the raise go into effect?’’ He concluded, ‘‘I will be happy to let you know our decision within the next week.’’ Processor Co-Conspirator 17’s VP of People Services responded to the George’s executive that ‘‘We have no plans at this time to give increases.’’ 199. The George’s executive made a similar disclosure to Processor CoConspirator 18—‘‘We are budgeting for our next fiscal year’’—as well as a similar request—‘‘and was wondering what [Processor Co-Conspirator 18] is going to do as far as Plant Wages in November? Do you know the % amount or $ amount that [Processor CoConspirator 18] will be giving in Springdale and Monett, MO?’’ The George’s executive also, as he did with Processor Co-Conspirator 17, promised an exchange: ‘‘I will be able to give you ours within the next week or so as well.’’ The Processor Co-Conspirator 18 executive responded, ‘‘Sorry, we don’t know yet what we are going to do,’’ to which the George’s executive replied ‘‘will you please share with me once you know?’’ 200. A later document from July 2010 states that the effective date of Processor Co-Conspirator 18’s last plant-wide wage raise was in November 2008, suggesting that Processor CoConspirator 18, like Processor CoConspirator 17, did not raise its wages in 2009. 201. While in the years before and after 2009, George’s typically raised its hourly plant worker wages, in 2009 itself, after hearing directly from its competitor Processor Co-Conspirator 17, and potentially also from its competitor Processor Co-Conspirator 18, George’s chose not to raise its hourly worker wages. Thus, because George’s collaborated with its competitors through the direct sharing of future compensation information, and received comfort from those competitors that they did not plan to raise their employees’ wages, George’s processing plant employees suffered a harmful effect. 202. Evidence of harmful effects from an information-sharing conspiracy is not restricted to denials of wage raises or choices not to grant benefits. If each participant in a labor market is suppressing its compensation levels by using information about its competitors’ compensation plans to make smaller and more targeted wage increases than it would have absent such information sharing, wages will rise more slowly, PO 00000 Frm 00020 Fmt 4701 Sfmt 4703 and for fewer workers, than they would have without the conspiracy. 203. For example, in 2013, Processor Co-Conspirator 18’s Director of Labor Compensation informed her coworkers that in preparation for internal decisionmaking about plant wages, Processor Co-Conspirator 18 ‘‘completed a thirdparty survey with competing poultry companies. With this information, we feel that we are in a better position to strategically evaluate wages on a location by location level.’’ Attached to this email are charts using data exchanged about competing processors’ base wage rates through the WMS Survey Group, as well as other documents to which ‘‘We [Processor CoConspirator 18] have added the [Consultant Co-Conspirator 1] wages and ranking’’ and ‘‘maintenance start and base rates by [Consultant CoConspirator 1] region.’’ At least three of these charts marked specific plants for which Processor Co-Conspirator 18, as compared to the averages of other processors’ plants in that region, was paying below median wages for the industry. 204. The information exchange informed Processor Co-Conspirator 18 exactly where and by how much it would have to increase wages to match its competitors; the exchange deprived plant workers, who lack any comparable information, of an independent effort by Processor Co-Conspirator 18 to recruit and hire workers by competing against other processors. 205. Defendant Wayne has admitted that it used its collaboration with the Processor Conspirators, and the information they exchanged with each other, in this way. Wayne’s compensation strategy was to pay wages at or near the midpoint of compensation (i.e., 50%) for its workers as compared to its competitors. Wayne’s discussions and exchange of compensation information with the Processor Conspirators allowed it to more precisely target what the mid-point of compensation would be, suppressing the rise in compensation that might otherwise have occurred if Wayne had less ability to target that mid-point. 206. Similarly, Defendant Cargill used discussions and exchange of compensation information with the Processor Conspirators to assist in determining the ‘‘salary bands’’ it would set for salaried worker positions. Cargill sent these band amounts to local plant managers to inform the setting of local wages. Cargill admitted that on at least one occasion the WMS Survey Group compensation data influenced Cargill’s decision to lower the salary band range E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices for plant supervisors from where it had originally set that band. 207. The Processor Conspirators’ compensation information exchanges therefore distorted compensation-setting processes in the poultry processor plant worker labor market and harmed the competitive process. VII. Violations Alleged lotter on DSK11XQN23PROD with NOTICES2 Count I: Sherman Act Section 1 (By the United States Against All Defendants) 208. Paragraphs 1 through 207 are repeated and realleged as if fully set forth herein. 209. The Processor Defendants violated Section 1 of the Sherman Act, 15 U.S.C. 1, by agreeing to collaborate with and assist their competitors in making poultry processing worker compensation decisions, to exchange current and future, disaggregated, and identifiable information about their compensation of poultry processing plant workers, and to facilitate this collaboration and such exchanges. This agreement suppressed compensation for poultry processing workers for decades. 210. This agreement included more than 20 years of discussions between and among these competitors about wage and benefit policies and amounts, which went well beyond the sharing of information and included consultation and advice-giving—as one processor put it, ‘‘a collaborative working relationship’’—on decisions that were competitively sensitive and should have been made independently. 211. The agreement also included exchanging (or, for the Consultant Defendants, facilitating the exchange of) competitively sensitive information about poultry processing plant workers’ wages and benefits at both local levels and the national level. Such exchanges allowed these competitors to understand wages and benefits paid or planned by specific competitors, in specific places, to specific types of workers. (Standing alone, these exchanges of information would constitute a violation of Section 1 of the Sherman Act.) 212. The Processor Defendants themselves understood that their anticompetitive agreement likely raised serious legal concerns. They went to great lengths to keep their exchanges confidential. Some expressed their concerns explicitly; others abandoned some of the larger-group exchanges once antitrust investigations and private lawsuits began to uncover their behavior. The Processor Defendants and Processor Conspirators nonetheless continued exchanging information through less observable methods, for VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 example through Consultant CoConspirator 1. 213. The Processor Conspirators’ market power increases their agreement’s likely anticompetitive effects. In relevant local labor submarkets, they control more than 80 percent of poultry processing jobs—in some areas, likely 100 percent of poultry processing jobs—and thus have market power in local markets for poultry processing plant workers. They enjoy outsize market power over the supply of poultry processing plant jobs in these local areas, in which they are often among the largest employers. In the national market, they control over 90 percent of poultry processing jobs nationwide, and thus have buyer market power in the nationwide market for poultry processing plant workers. Their choice to collaborate on compensation decisions and to exchange information, even though they had buyer market power, disrupted the competitive mechanism for negotiating and setting wages and benefits for poultry processing plant workers and harmed the competitive process. 214. As described in more detail in paragraphs 1 through 213 above, from 2000 or earlier to the present, Defendants Cargill, George’s, Sanderson, Wayne, WMS, and G. Jonathan Meng agreed to collaborate with and assist their competitors in making compensation decisions and to exchange current and future, disaggregated, and identifiable compensation information, or to facilitate this anticompetitive agreement, an unlawful restraint of trade under Section 1 of the Sherman Act, 15 U.S.C. 1. 215. There is no justification, procompetitive or otherwise, for large, profitable, and sophisticated competitors collaborating with the effect of suppressing wages and benefits for their workers. 216. The Defendants’ agreement to collaborate on compensation decisions, exchange current and future compensation information, and facilitate those collaborations and exchanges suppressed poultry processing plant worker compensation. It constitutes an unreasonable restraint of interstate trade and commerce in the nationwide and in local labor markets for hourly and salaried poultry processing plant workers. This offense is likely to continue and recur unless this court grants the requested relief. PO 00000 Frm 00021 Fmt 4701 Sfmt 4703 34049 Count II: Packers and Stockyards Act Section 202(a) (By the United States Against Sanderson and Wayne Only) 217. Paragraphs 1 through 216 are repeated and realleged as if fully set forth herein. 218. Defendants Sanderson and Wayne violated Section 202(a) of the Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 192(a), by engaging in deceptive practices regarding their contracts with growers. These deceptions deprived growers of material information necessary to make informed decisions about their contracting opportunities and to compare offers from different poultry processors. 219. Defendants Sanderson and Wayne are ‘‘live poultry dealers’’ under 7 U.S.C. 182(10), because each is engaged in the business of obtaining live poultry under a poultry growing arrangement for the purpose of slaughtering it. 220. Defendants Sanderson’s and Wayne’s grower contracts concern ‘‘live poultry’’ under 7 U.S.C. 182(6), 192, because the contracts concerned the raising of live chickens. 221. Defendants Sanderson and Wayne each engaged in deceptive practices through their grower contracts, which omitted material disclosures about how each compensates growers. Those disclosures would have provided information the grower needs to effectively compete in the tournament system and allowed growers to evaluate their likely return and risks, including, among other things the variability of inputs the grower would receive, the risks regarding downside penalties for underperforming relative to other growers in the tournament system. 222. Defendants Sanderson’s and Wayne’s deceptive practices are ongoing and likely to continue and recur unless the court grants the requested relief. VIII. Requested Relief 223. The United States requests that this Court: a. rule that Defendants’ conspiracy to collaborate on processing plant compensation decisions, including through the exchange of compensation information, has unreasonably restrained trade and is unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1; b. rule that Defendants’ exchange of compensation information itself, without more, has unreasonably restrained trade and is unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1; c. permanently enjoin and restrain all Defendants from collaborating on E:\FR\FM\25MYN2.SGM 25MYN2 34050 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 decisions related to worker wages and benefits with any other company engaged in poultry growing or processing or the sale of poultry products; d. permanently enjoin and restrain all Defendants from sharing, or facilitating the sharing of, information about compensation for their workers with any other company engaged in poultry growing or processing or the sale of poultry products, whether that sharing is direct or indirect; e. require all Defendants to take such internal measures as are necessary to ensure compliance with that injunction; f. impose on all Defendants a Monitoring Trustee to ensure compliance with the antitrust laws; g. grant equitable monetary relief; h. permanently enjoin and restrain Defendants Sanderson and Wayne from engaging in deceptive practices regarding their contracts with growers; i. require Defendants Sanderson and Wayne to make appropriate disclosures to growers before entering into contracts concerning live poultry, in order to provide sufficient information for the growers to understand the scope of the contract and the potential risks; j. require Defendants Sanderson and Wayne to modify their grower compensation systems to eliminate the harm arising from each firm’s failure to disclose to growers all of the potential risks associated with that firm’s compensation system; k. grant other relief as required by the nature of this case and as is just and proper to prevent the recurrence of the alleged violation and to dissipate its anticompetitive effects, including such structural relief as may be necessary to prevent the anticompetitive effects caused by the challenged conduct and described in this Amended Complaint; l. award the United States the costs of this action; and m. award such other relief to the United States as the Court may deem just and proper. Dated: May 17, 2023 Respectfully submitted, For Plaintiff United States of America, Jonathan Kanter, Assistant Attorney General. Doha Mekki, Principal Deputy Assistant Attorney General. Michael Kades, Deputy Assistant Attorney General. Hetal J. Doshi, Deputy Assistant Attorney General for Litigation. Ryan Danks, Director of Civil Enforcement. Miriam R. Vishio (USDC Md. Bar No. 17171), Deputy Director of Civil Enforcement. Daniel Guarnera, VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 Acting Chief, Civil Conduct Task Force. Kate M. Riggs (USDC Md. Bar No. 18154), Acting Assistant Chief, Civil Conduct Task Force. United States Department of Justice, Antitrust Division. By: lllllllllllllllllll Kathleen Simpson Kiernan, Jessica J. Taticchi, Jeremy C. Keeney, Eun Ha Kim, United States Department of Justice, Antitrust Division, Civil Conduct Task Force, 450 Fifth Street NW, Suite 8600, Washington, DC 20530, Tel: 202–353–3100, Fax: 202–616– 2441, Kathleen.Kiernan@usdoj.gov. Erek L. Barron, United States Attorney. Ariana Wright Arnold, USDC Md. Bar No. 23000, Assistant United States Attorney, 36 S Charles St., 4th Floor, Baltimore, Maryland 21201, Tel: 410–209–4813, Fax: 410–962– 2310, Ariana.Arnold@usdoj.gov. United States District Court for the District of Maryland United States of America, Plaintiff, v. Cargill Meat Solutions Corporation, et al., Defendants. Civil Action No.: 22–cv–1821 (Gallagher, J.) [Proposed] Final Judgment Whereas, Plaintiff, the United States of America, moved to amend its Complaint on May 17, 2023, alleging that Defendants George’s, Inc. and George’s Foods, LLC (collectively, ‘‘Settling Defendants’’) violated Section 1 of the Sherman Act, 15 U.S.C. 1; And whereas, the United States and Settling Defendants have consented to the entry of this Final Judgment without the taking of testimony, without trial or adjudication of any issue of fact or law, and without this Final Judgment constituting any evidence against or admission by any party relating to any issue of fact or law; And whereas, Settling Defendants agree to undertake certain actions and refrain from certain conduct for the purpose of remedying the anticompetitive effects alleged in the Amended Complaint; And whereas, Settling Defendants agree to be bound by the provisions of this Final Judgment pending its approval by the Court; Now therefore, it is ordered, adjudged, and decreed: I. Jurisdiction This Court has jurisdiction over the subject matter of this action and each of the parties named herein. The Amended Complaint states a claim upon which relief may be granted against the Settling Defendants under Section 1 of the Sherman Act, 15 U.S.C. 1. PO 00000 Frm 00022 Fmt 4701 Sfmt 4703 II. Definitions As used in this Final Judgment: A. ‘‘Agreement’’ means any contract, arrangement, or understanding, formal or informal, oral or written, between two or more persons. B. ‘‘George’s, Inc.’’ means Defendant George’s, Inc., a privately-held company headquartered in Springdale, Arkansas, its successors and assigns, subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees. C. ‘‘George’s Foods’’ means Defendant George’s Foods, LLC, a company headquartered in Edinburg, Virginia that is an affiliate of George’s, Inc., and its successors and assigns, subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees. D. ‘‘Communicate’’ means to discuss, disclose, transfer, disseminate, circulate, provide, request, solicit, send, receive or exchange information or opinion, formally or informally, directly or indirectly, in any manner, and regardless of the means by which it is accomplished, including orally or by written means of any kind, such as electronic communications, emails, facsimiles, telephone communications, voicemails, text messages, audio recordings, meetings, interviews, correspondence, exchange of written or recorded information, including surveys, or face-to-face meetings. E. ‘‘Compensation’’ means all forms of payment for work, including salaried pay, hourly pay, regular or ad hoc bonuses, over-time pay, and benefits, including healthcare coverage, vacation or personal leave, sick leave, and life insurance or disability insurance policies. F. ‘‘Competitively Sensitive Information’’ means information that is relevant to, or likely to have an impact on, at least one dimension of competition, including price, cost (including Compensation), output, quality, and innovation. Competitively Sensitive Information includes prices, strategic plans, amounts and types of Compensation, formula and algorithms used for calculating Compensation or proposed Compensation, other information related to costs or profits, markets, distribution, business relationships, customer lists, production capacity, and any confidential information the exchange of which could harm competition. G. ‘‘Consulting Firm’’ means any organization, including Webber, Meng, Sahl & Company, Inc. and Agri Stats, E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices Inc., that gathers, sorts, compiles, and/or sells information about Compensation for Poultry Processing Workers, or provides advice regarding Compensation for Poultry Processing Workers; ‘‘Consulting Firm’’ does not include job boards, employment agencies or other entities that facilitate employment opportunities for employees. H. ‘‘Grower’’ means any person engaged in the business of raising and caring for live Poultry for slaughter by another, whether the Poultry is owned by such a person or by another, but not an employee of the owner of such Poultry. I. ‘‘Human Resources Staff’’ means any and all full-time, part-time, or contract employees of Settling Defendants, wherever located, whose job responsibilities relate in any way to hiring or retaining workers, employment, or evaluating, setting, budgeting for, administering, or otherwise affecting Compensation for Poultry Processing Workers, and any other employee or agent working at any of those employees’ direction. J. ‘‘Including’’ means including, but not limited to. K. ‘‘Jien’’ means the case Jien v. Perdue Farms, Inc., No. 1:19–cv–2521 (D. Md.). L. ‘‘Management’’ means all directors and executive officers of Settling Defendants, or any other of Settling Defendants’ employees with management or supervisory responsibilities related to hiring, employment, or Compensation of Poultry Processing plant labor, including Poultry Processing plant managers. M. ‘‘Person’’ means any natural person, corporation, firm, company, sole proprietorship, partnership, joint venture, association, institute, governmental unit, or other legal entity. N. ‘‘Poultry’’ means chicken or turkey. O. ‘‘Poultry Processing’’ means the business of raising, slaughtering, cleaning, packing, packaging, and related activities associated with producing Poultry, including activities conducted by Poultry Processors at integrated feed mills, hatcheries, and processing plant facilities and the management of those activities. P. ‘‘Poultry Processing Worker’’ means anyone paid any Compensation, directly or indirectly (such as through a temporary employment agency or thirdparty staffing agency), by a Poultry Processor related to Poultry Processing, including temporary workers, permanent workers, employees, workers paid hourly wages, workers paid VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 salaried wages, and workers paid benefits. Q. ‘‘Poultry Processor’’ means any person (1) who is engaged in Poultry Processing or (2) that has full or partial ownership or control of a Poultry Processing facility, or (3) that provides Compensation to Poultry Processing Workers; ‘‘Poultry Processor’’ does not include staffing agencies or other entities that are not owned, operated, or controlled by a person engaged in Poultry Processing or that owns or controls, in full or part, Poultry Processing facilities, that make individuals available to work at Poultry Processing facilities. R. ‘‘Restitution Amount’’ means $5.8 million for Settling Defendants. III. Applicability This Final Judgment applies to Settling Defendants and all other persons in active concert or participation with them who receive actual notice of this Final Judgment. IV. Prohibited Conduct A. Management and Human Resources Staff of each Settling Defendant must not, whether directly or indirectly, including through a Consulting Firm or other person: 1. participate in any meeting or gathering (including in-person, virtual, and telephonic meetings and gatherings) related to Compensation for Poultry Processing Workers, or for any purpose related to Compensation for Poultry Processing Workers, at which any other Poultry Processor not owned or operated by Settling Defendants is present; 2. Communicate Competitively Sensitive Information about Compensation for Poultry Processing Workers with any Poultry Processor not owned or operated by one or both Settling Defendants, including about types, amounts, or methods of setting or negotiating Compensation for Poultry Processing Workers; 3. attempt to enter into, enter into, maintain, or enforce any Agreement with any Poultry Processor not owned or operated by one or both Settling Defendants about Poultry Processing Worker Compensation information, including how to set or decide Compensation or the types of Compensation for Poultry Processing Workers; 4. Communicate Competitively Sensitive Information about Compensation for Poultry Processing Workers to any Poultry Processor not owned or operated by one or both Settling Defendants, including Communicating Competitively Sensitive PO 00000 Frm 00023 Fmt 4701 Sfmt 4703 34051 Information about Compensation for Poultry Processing Workers to any Consulting Firm that produces reports regarding Compensation for Poultry Processing Workers that are shared with other Poultry Processors; 5. use non-public, Competitively Sensitive Information about Compensation for Poultry Processing Workers from or about any Poultry Processor not owned or operated by one or both Settling Defendants; or 6. encourage or facilitate the communication of Competitively Sensitive Information about Compensation for Poultry Processing Workers to or from any Poultry Processor not owned or operated by one or both Settling Defendants. B. Settling Defendants must not knowingly use from any Poultry Processor not owned or operated by one or both Settling Defendants or any of that Poultry Processor’s officers, consultants, attorneys, or other representatives any Competitively Sensitive Information about Compensation for Poultry Processing Workers except as set forth in Section V or in connection with pending or threatened litigation as a party or fact witness, pursuant to court order, subpoena, or similar legal process, or for which any Settling Defendant has received specific prior approval in writing from the Division. C. The Settling Defendants must not retaliate against any employee or third party for disclosing information to the monitor described in Section VI, a government antitrust enforcement agency, or a government legislature. V. Conduct Not Prohibited A. Nothing in Section IV prohibits a Settling Defendant from Communicating, using, or encouraging or facilitating the Communication of, its Competitively Sensitive Information with an actual or prospective Poultry Processing Worker, or with the Poultry Processing Worker’s labor union or other bargaining agent, except that, if a prospective Poultry Processing Worker is employed by another Poultry Processor, Settling Defendants’ Communicating, using, or encouraging or facilitating the Communication of, Competitively Sensitive Information is excluded from the prohibitions of Section IV only insofar as is necessary to negotiate the Compensation of a prospective Poultry Processing Worker. Settling Defendants are not prohibited from internally using Competitively Sensitive Information received from a prospective Poultry Processing Worker who is employed by a Poultry Processor in the ordinary course of a legitimate E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34052 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices hiring, retention, or off-boarding process, but Settling Defendants are prohibited from Communicating that Competitively Sensitive Information about Compensation for Poultry Processing Workers to another Poultry Processor. B. Nothing in Section IV prohibits the Settling Defendants from (1) sharing information with or receiving information from a staffing agency or entity that is not owned or controlled by any Poultry Processor, that facilitates employment, if necessary to effectuate an existing or potential staffing Agreement between the staffing agency or entity and the Settling Defendants; and (2) advertising Compensation through public job postings, billboards or help wanted advertisements. C. Nothing in Section IV prohibits Settling Defendants from, after securing advice of counsel and in consultation with their respective antitrust compliance officers, Communicating, using, encouraging or facilitating the Communication of, or attempting to enter into, entering into, maintaining, or enforcing any Agreement to Communicate Competitively Sensitive Information relating to Compensation for Poultry Processing Workers with any Poultry Processor when such Communication or use is for the purpose of evaluating or effectuating a bona fide acquisition, disposition, or exchange of assets: 1. For all Agreements under Paragraph V(C) with any other Poultry Processor to Communicate Competitively Sensitive Information relating to Compensation for Poultry Processing Workers that a Settling Defendant enters into, renews, or affirmatively extends after the date of entry of this Final Judgment, the Settling Defendant must maintain documents sufficient to show: i. the specific transaction or proposed transaction to which the sharing of Competitively Sensitive Information relating to Compensation for Poultry Processing Workers relates; ii. the employees, identified with reasonable specificity, who are involved in the sharing of Competitively Sensitive Information relating to Compensation for Poultry Processing Workers; iii. with specificity the Competitively Sensitive Information relating to Compensation for Poultry Processing Workers Communicated; and iv. the termination date or event of the sharing of Competitively Sensitive Information relating to Compensation for Poultry Processing Workers. 2. For Communications under Paragraph V(C), Settling Defendants VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 must maintain copies of all materials required under Paragraph V(C)(1) for the duration of the Final Judgment, following entry into any Agreement to Communicate or receive Competitively Sensitive Information relating to Compensation for Poultry Processing Workers, and must make such documents available to the United States and the monitor appointed under Section VI upon request. D. Nothing in Section IV prohibits Settling Defendants, after securing the advice of counsel and in consultation with the antitrust compliance officer, from engaging in conduct in accordance with the doctrine established in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and their progeny. E. Nothing in Paragraph IV(A)(1) prohibits Settling Defendants from participating in meetings and gatherings in which they receive (but do not provide) information relating to Compensation that does not reflect or reveal information received from or about one or more Poultry Processors. VI. Monitor A. Upon application of the United States, which Settling Defendants may not oppose, the Court will appoint a monitor selected by the United States and approved by the Court. Within 30 calendar days after entry of the Stipulation and Order in this case, the Settling Defendants may together propose to the United States a pool of three candidates to serve as the monitor, and the United States may consider the Settling Defendants’ perspectives on the Settling Defendants’ three proposed candidates or any other candidates identified by the United States. The United States retains the right, in its sole discretion, either to select the monitor from among the three candidates proposed by the Settling Defendants or to select a different candidate for the monitor. B. The monitor will have the power and authority to monitor: (1) Settling Defendants’ compliance with the terms of this Final Judgment entered by the Court, including compliance with Paragraph IV(C), and (2) Settling Defendants’ compliance, regarding events occurring after entry of the Stipulation and Order in this case (even if such events began before that date), with the U.S. federal antitrust laws relating to Poultry Processing, Poultry Processing Workers, Growers, integrated Poultry feed, hatcheries, the transportation of Poultry and Poultry products, and the sale of Poultry and Poultry Processing products. The PO 00000 Frm 00024 Fmt 4701 Sfmt 4703 monitor may also have other powers as the Court deems appropriate. The monitor’s power and authority will not extend to monitoring the processing of meat or material other than Poultry, even if such processing of meat or material other than Poultry takes place in a facility or location that also engages in Poultry Processing. The monitor will have no right, responsibility or obligation for the operation of Settling Defendants’ businesses, and the Settling Defendants do not have any obligation to seek the monitor’s approval or authorization before making business decisions. No attorney-client relationship will be formed between the Settling Defendants and the monitor. C. The monitor will serve at the cost and expense of Settling Defendants pursuant to a written Agreement, on terms and conditions, including confidentiality requirements and conflict-of-interest certifications, approved by the United States in its sole discretion. D. The monitor may hire, at the cost and expense of Settling Defendants, any agents and consultants, including attorneys and accountants, that are reasonably necessary in the monitor’s judgment to assist with the monitor’s duties. These agents or consultants will be solely accountable to the monitor and will serve on terms and conditions, including confidentiality requirements and conflict-of-interest certifications, approved by the United States in its sole discretion. E. The compensation of the monitor and agents or consultants retained by the monitor must be on reasonable and customary terms commensurate with the individuals’ experience and responsibilities. If the monitor and Settling Defendants are unable to reach agreement on the monitor’s compensation or other terms and conditions of engagement within 14 calendar days of the appointment of the monitor, the United States, in its sole discretion, may take appropriate action, including by making a recommendation to the Court. Within three business days of hiring any agents or consultants, the monitor must provide written notice of the hiring and the rate of compensation to Settling Defendants and the United States. F. The monitor must account for all costs and expenses incurred. G. The monitor will have the authority to take such reasonable steps as, in the United States’ view, may be necessary to accomplish the monitor’s duties. The monitor may seek information from Settling Defendants’ personnel, including in-house counsel, compliance personnel, and internal E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices auditors. If the monitor has confidence in the quality of the resources, the monitor may consider the products of Settling Defendants’ processes, such as the results of studies, reviews, sampling and testing methodologies, audits, and analyses conducted by or on behalf of any Settling Defendant, as well as any of Settling Defendants’ internal resources (e.g., legal, compliance, and internal audit), which may assist the monitor in carrying out the monitor’s duties). The monitor may take into account (a) the extent to which the Settling Defendants have dedicated internal personnel to ensure compliance with this Order, (b) the quality of the compliance work performed by such internal personnel, and (c) the availability and quality of analyses conducted by such internal personnel in determining or modifying an appropriate work plan that enables the monitor to accomplish his or her duties without unnecessary involvement in the day-to-day operation of the business. The Settling Defendants will establish a policy, annually communicated to all employees, that employees may disclose any information to the monitor, without reprisal for such disclosure. H. Settling Defendants must use best efforts to cooperate fully with the monitor. Subject to reasonable protection for trade secrets and confidential research, development, or commercial information, or any applicable privileges or laws, Settling Defendants must (1) provide the monitor and agents or consultants retained by the monitor with full and complete access to all personnel, books, records, and facilities, and (2) use reasonable efforts to provide the monitor with access to Settling Defendants’ former employees, Growers, third-party vendors, agents, and consultants. Settling Defendants may not take any action to interfere with or to impede accomplishment of the monitor’s responsibilities. I. If Settling Defendants seek to withhold from the monitor access to anything or anyone on the basis of attorney-client privilege or the attorney work-product doctrine, or because Settling Defendants reasonably believe providing the monitor with access would be inconsistent with applicable law, the Settling Defendants must work cooperatively with the monitor to resolve the issue to the satisfaction of the monitor. If Settling Defendants and the monitor do not reach a resolution of the issue to the satisfaction of the monitor within 21 calendar days, Settling Defendants must immediately provide written notice to the United States and the monitor. The written VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 notice must include a description of what is being withheld and the Settling Defendants’ legal basis for withholding access. J. Except as specifically provided by Paragraph VI(I), Settling Defendants may not object to requests made or actions taken by the monitor in fulfillment of the monitor’s responsibilities under this Final Judgment or any other Order of the Court on any ground other than malfeasance by the monitor; provided, however, that if Settling Defendants believe in good faith that a request or action by the monitor pursuant to the monitor’s authority under Paragraph VI(B)(2) exceeds the scope of the monitor’s authority or is unduly burdensome, the Settling Defendants may object to the United States. Objections by Settling Defendants under this Paragraph VI(J) regarding a request or action exceeding the monitor’s scope must be conveyed in writing to the United States and the monitor within 10 calendar days of the monitor’s request or action that gives rise to Settling Defendants’ objection. Objections by Settling Defendants under this Paragraph VI(J) regarding a request or action being unduly burdensome must be made, with specificity, to the monitor within seven calendar days of the request or action; if the Settling Defendants and the monitor cannot resolve the objections regarding a request or action being unduly burdensome, within 21 days of the request or action the Settling Defendants must convey their objections in writing to the United States. All objections will be resolved by the United States, in its sole discretion. K. The monitor must investigate and report on Settling Defendants’ compliance with this Final Judgment, including those provisions governing Settling Defendants’ communications with Poultry Processors and third parties related to Poultry Processing Worker Compensation information, and Settling Defendants’ compliance, regarding events occurring after entry of the Stipulation and Order in this case (even if such events began before that date), with the U.S. federal antitrust laws relating to Poultry Processing, Poultry Processing Workers, Growers, integrated Poultry feed, hatcheries, the transportation of Poultry and Poultry products, and the sale of Poultry and Poultry Processing products. L. The monitor must provide periodic written reports to the United States and the Settling Defendants setting forth Settling Defendants’ efforts to comply with their obligations under this Final Judgment and the U.S. federal antitrust PO 00000 Frm 00025 Fmt 4701 Sfmt 4703 34053 laws relating to Poultry Processing, Poultry Processing Workers, Growers, integrated Poultry feed, hatcheries, the transportation of Poultry and Poultry products, and the sale of Poultry and Poultry Processing products. The monitor must provide written reports every six months for the first two years of the term of the monitor’s appointment after which the monitor must provide written reports on an annual basis. The monitor must provide the first written report within six months of the monitor’s appointment by the Court. The United States, in its sole discretion, may change the frequency of the monitor’s written reports at any time, communicate or meet with the monitor at any time, and make any other requests of the monitor as the United States deems appropriate. M. Within 30 days after appointment of the monitor by the Court, and on a yearly basis thereafter, the monitor must provide to the United States and Settling Defendants a written work plan for the monitor’s proposed review. Settling Defendants may provide comments on a written work plan to the United States and the monitor within 14 calendar days after receipt of the written work plan. The United States retains the right, in its sole discretion, to request changes or additions to a work plan at any time. Any disputes between Settling Defendants and the monitor with respect to any written work plan will be decided by the United States in its sole discretion. N. The monitor will serve for the full term of this Final Judgment, unless the United States, in its sole discretion, determines a different period is appropriate. After three years from the date this Final Judgment was entered, the United States, in its sole discretion, will determine whether continuation of the monitor’s full term is appropriate, or whether to suspend the remainder of the term. O. If the United States determines that the monitor is not acting diligently or in a reasonably cost-effective manner or if the monitor becomes unable to continue in their role for any reason, the United States may recommend that the Court appoint a substitute. VII. Required Conduct A. Within 10 days of entry of this Final Judgment, Settling Defendants must appoint an antitrust compliance officer who is an internal employee or officer of the Settling Defendants and identify to the United States the antitrust compliance officer’s name, business address, telephone number, and email address. Within 45 days of a vacancy in the antitrust compliance E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34054 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices officer position, Settling Defendants must appoint a replacement, and must identify to the United States the antitrust compliance officer’s name, business address, telephone number, and email address. Settling Defendants’ initial or replacement appointment of an antitrust compliance officer is subject to the approval of the United States, in its sole discretion. B. Settling Defendants’ antitrust compliance officer must have, or must retain outside counsel who has, the following minimum qualifications: 1. be an active member in good standing of the bar in any U.S. jurisdiction; and 2. have at least five years’ experience in legal practice, including experience with antitrust matters. C. Settling Defendants’ antitrust compliance officer must, directly or through the employees or counsel working at the direction of the antitrust compliance officer: 1. within 14 days of entry of the Final Judgment, furnish to the relevant Settling Defendants’ Management, all Human Resources Staff, and Settling Defendants’ retained Consulting Firms and utilized temporary employment agencies a copy of this Final Judgment, the Competitive Impact Statement filed by the United States with the Court, and a cover letter in a form attached as Exhibit 1; 2. within 14 days of entry of the Final Judgment, in a manner to be devised by Settling Defendants and approved by the United States, in its sole discretion, provide Settling Defendants’ Management, all Human Resources Staff, and Settling Defendant’s retained Consulting Firms and utilized temporary employment agencies reasonable notice of the meaning and requirements of this Final Judgment; 3. annually brief Settling Defendants’ Management, Human Resources Staff, and Settling Defendants’ retained Consulting Firms and utilized temporary employment agencies on the meaning and requirements of this Final Judgment and the U.S. federal antitrust laws; 4. brief any person who succeeds a person in any position identified in Paragraph VII(C)(3) within 60 days of such succession; 5. obtain from each person designated in Paragraph VII(C)(3) or VII(C)(4), within 30 days of that person’s receipt of the Final Judgment, a certification that the person (i) has read and understands and agrees to abide by the terms of this Final Judgment; (ii) is not aware of any violation of the Final Judgment or of any violation of any U.S. antitrust law that has not been reported VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 to Settling Defendants’ Management; and (iii) understands that failure to comply with this Final Judgment may result in an enforcement action for civil or criminal contempt of court; 6. annually communicate to Settling Defendants’ Management and Human Resources Staff, and Settling Defendants’ retained Consulting Firms and utilized temporary employment agencies that they may disclose to the antitrust compliance officer, without reprisal for such disclosure, information concerning any violation or potential violation of this Final Judgment or the U.S. federal antitrust laws by Settling Defendants; and 7. maintain for five years or until expiration of the Final Judgment, whichever is longer, a copy of all materials required to be issued under Paragraph VII(C), and furnish them to the United States within 10 days if requested to do so, except documents protected under the attorney-client privilege or the attorney work-product doctrine. D. Each Settling Defendant must: 1. within 30 days of the filing of the Amended Complaint, Proposed Final Judgment, or Competitive Impact Statement in this action, whichever is latest, provide notice to every Poultry Processor and to every Consulting Firm with which that Settling Defendant has a contract or Agreement in place relating to Compensation for Poultry Processing Workers, of the Amended Complaint, Proposed Final Judgment, and Competitive Impact Statement in a form and manner to be proposed by Settling Defendants and approved by the United States, in its sole discretion. Settling Defendants must provide the United States with their proposals, including their lists of recipients, within 10 days of the filing of the Amended Complaint; 2. for all materials required to be furnished under Paragraph VII(C) that Settling Defendants claim are protected under the attorney-client privilege or the attorney work-product doctrine, Settling Defendants must furnish to the United States a privilege log; 3. upon Management or the antitrust compliance officer learning of any violation or potential violation of any of the terms and conditions contained in this Final Judgment, promptly take appropriate action to terminate or modify the activity so as to comply with this Final Judgment and maintain, and produce to the United States upon request, all documents related to any violation or potential violation of this Final Judgment; 4. file with the United States a statement describing any violation or PO 00000 Frm 00026 Fmt 4701 Sfmt 4703 potential violation within 30 days of a violation or potential violation becoming known to Management or the antitrust compliance officer. Descriptions of violations or potential violations of this Final Judgment must include, to the extent practicable, a description of any communications constituting the violation or potential violation, including the date and place of the communication, the persons involved, and the subject matter of the communication; 5. have their Chief Executive Officers or President certify to the United States annually on the anniversary date of the entry of this Final Judgment that the Settling Defendants have complied with all of the provisions of this Final Judgment, and list all Agreements subject to Paragraph V(C) from the prior year; and 6. maintain and produce to the United States upon request: (i) a list identifying all employees having received the antitrust briefings required under Paragraphs VII(C)(3) and VII(C)(4); and (ii) copies of all materials distributed as part of the antitrust briefings required under Paragraph VII(C)(3) and VII(C)(4). For all materials requested to be produced under this Paragraph VII(D)(6) that a Settling Defendant claims is protected under the attorney-client privilege or the attorney work-product doctrine, Settling Defendant must furnish to the United States a privilege log. G. The term ‘‘potential violation’’ as used in this Section VII does not include the discussion with counsel, the antitrust compliance officer, or anyone working at counsel’s or the antitrust compliance officer’s direction, regarding future conduct. VIII. Required Cooperation A. Settling Defendants must cooperate fully and truthfully with the United States in any investigation or litigation relating to the sharing of Poultry Processing Worker Compensation information among Poultry Processors, in violation of Section 1 of the Sherman Act, as amended, 15 U.S.C. 1. Settling Defendants must use their best efforts to ensure that all current officers, directors, employees, and agents also fully and promptly cooperate with the United States and use reasonable efforts to ensure that all former officers, directors, employees, and agents also fully and promptly cooperate with the United States. The full, truthful, and continuing cooperation of Settling Defendants must include: 1. as requested on reasonable notice by the United States, being available for interviews, depositions, and providing E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices sworn testimony to the United States orally and in writing as the United States so chooses; 2. producing, upon request of the United States, all documents, data, information, and other materials, wherever located, not protected under the attorney-client privilege or attorney work product doctrine, in the possession, custody, or control of that Settling Defendant, and a privilege log of any materials the Settling Defendant claims are protected under the attorneyclient privilege or the attorney workproduct doctrine; and 3. testifying at trial and other judicial proceedings fully, truthfully, and under oath, when called upon to do so by the United States. B. The obligations of Settling Defendants to cooperate fully and truthfully with the United States as required in this Section VIII will cease upon the conclusion of all investigations and litigation related to the sharing of Poultry Processing Worker Compensation information in violation of Section 1 of the Sherman Act, including exhaustion of all appeals or expiration of time for all appeals of any Court ruling in this matter, or the expiration of the Final Judgment, whichever is later. C. Settling Defendants must take all necessary steps to preserve all documents and information relevant to the United States’ investigations and litigation alleging that Settling Defendants and other Poultry Processors shared Poultry Processing Worker Compensation information in violation of Section 1 of the Sherman Act until the United States provides written notice to the Settling Defendants that their obligations under this Section VIII have expired. D. Subject to the full, truthful, and continuing cooperation of each Settling Defendant, as required under this Section VIII, Settling Defendants are fully and finally discharged and released from any civil or criminal claim by the United States arising from the sharing of Poultry Processing Worker Compensation information among Poultry Processors prior to the date of filing of the Amended Complaint in this action; provided, however, that this discharge and release does not include any criminal claim arising from any subsequently-discovered evidence of an Agreement to fix prices or wages or to divide or allocate markets, including to allocate Poultry Processing Workers. E. Paragraph VIII(D) does not apply to any acts of perjury or subornation of perjury (18 U.S.C. 1621–22), making a false statement or declaration (18 U.S.C. VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 1001, 1623), contempt (18 U.S.C. 401– 402), or obstruction of justice (18 U.S.C. 1503, et seq.) by any Settling Defendant. IX. Compliance Inspection A. For the purposes of determining or securing compliance with this Final Judgment or of determining whether this Final Judgment should be modified or vacated, upon written request of an authorized representative of the Assistant Attorney General for the Antitrust Division, and reasonable notice to Settling Defendants, Settling Defendants must permit, from time to time and subject to legally recognized privileges, authorized representatives, including agents retained by the United States: 1. to have access during Settling Defendants’ office hours to inspect and copy, or at the option of the United States, to require Settling Defendants to provide electronic copies of all books, ledgers, accounts, records, data, and documents in the possession, custody, or control of Settling Defendants relating to any matters contained in this Final Judgment; and 2. to interview, either informally or on the record, Settling Defendants’ officers, employees, or agents, who may have their individual counsel present, relating to any matters contained in this Final Judgment. The interviews must be subject to the reasonable convenience of the interviewee and without restraint or interference by Settling Defendants. B. Upon the written request of an authorized representative of the Assistant Attorney General for the Antitrust Division, Settling Defendants must submit written reports or respond to written interrogatories, under oath if requested, relating to any matters contained in this Final Judgment. X. Restitution A. Within 60 days of entry of this Final Judgment, Settling Defendants must place funds equal to 10% of their Restitution Amount into an escrow account selected by the United States, in its sole discretion. B. If the Jien Court grants a motion for final approval of a settlement and certification of a settlement class with respect to Settling Defendants’ settlement with the Jien plaintiffs, the entire balance of Settling Defendants’ escrow account, including any accrued interest and less any administrative costs, must be returned to Settling Defendants. C. If Settling Defendants have not entered into a settlement agreement with the plaintiffs in Jien before entry of this Final Judgment, or if preliminary or final approval of a settlement is denied, PO 00000 Frm 00027 Fmt 4701 Sfmt 4703 34055 or if certification of a settlement class is denied, or if a settlement is terminated or rescinded for any reason, Settling Defendants, within 21 days after (1) entry of this Final Judgment in the case of Settling Defendants having not reached a settlement agreement with the plaintiffs in Jien, or (2) any order denying settlement approval or certification of the settlement class or any termination or rescinding of a settlement, must deposit into their escrow account an amount equal to their Restitution Amount. This amount must be in addition to the initial 10% payment made pursuant to Paragraph X(A) and any accrued interest already present in the Settling Defendants’ escrow account. Upon full funding of the escrow account, the entire balance of the escrow account, including any accrued interest, must be released to the United States for distribution to affected Poultry Processing Workers in the form of restitution and payment for expenses related to distribution. In the event that preliminary or final approval of a settlement or class certification is denied, or the settlement agreement is rescinded or terminated, for reasons that the United States in its sole discretion believes to be curable, the United States, in its sole discretion, may agree to one or more extensions of the 21-day period in this Paragraph X(C). D. The claims and disbursement process will be established in the sole discretion of the United States. Settling Defendants must reimburse the United States for any costs associated with claims administration or remittance of restitution, including fees payable to a third-party claims administrator hired at the United States’ sole discretion, that extend beyond the sum of the initial 10% payments made by Settling Defendants under Paragraph X(A). Contributions beyond the initial 10% payments will be made on a pro rata basis based on Settling Defendants’ Restitution Amount. E. Upon completion of the restitution payments, the United States must return any funds remaining in the escrow account to the Settling Defendants, on a pro rata basis based on Settling Defendants’ Restitution Amount. XI. Public Disclosure A. No information or documents obtained pursuant to any provision in this Final Judgment, including reports the monitor provides to the United States pursuant to Paragraphs VI(K) and VI(L), may be divulged by the United States or the monitor to any person other than an authorized representative of the executive branch of the United States, except in the course of legal E:\FR\FM\25MYN2.SGM 25MYN2 34056 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 proceedings to which the United States is a party, including grand-jury proceedings, for the purpose of securing compliance with this Final Judgment, or as otherwise required by law. In the event that the monitor should receive a subpoena, court order or other court process seeking production of information or documents obtained pursuant to any provision in this Final Judgment, including reports the monitor provides to the United States pursuant to Paragraphs VI(K) and VI(L), the applicable disclosing party shall notify Settling Defendants immediately and prior to any disclosure, so that Settling Defendants may address such potential disclosure and, if necessary, pursue alternative legal remedies, including if deemed appropriate by Settling Defendants, intervention in the relevant proceedings. B. In the event of a request by a third party, pursuant to the Freedom of Information Act, 5 U.S.C. 552, for disclosure of information obtained pursuant to any provision of this Final Judgment, the Antitrust Division will act in accordance with that statute, and the Department of Justice regulations at 28 CFR part 16, including the provision on confidential commercial information, at 28 CFR 16.7. Settling Defendants submitting information to the Antitrust Division should designate the confidential commercial information portions of all applicable documents and information under 28 CFR 16.7. Designations of confidentiality expire 10 years after submission, ‘‘unless the submitter requests and provides justification for a longer designation period.’’ See 28 CFR 16.7(b). C. If at the time that Settling Defendants furnish information or documents to the United States pursuant to any provision of this Final Judgment, Settling Defendants represent and identify in writing information or documents for which a claim of protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure, and Settling Defendants mark each pertinent page of such material, ‘‘Subject to claim of protection under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure,’’ the United States must give Settling Defendants 10 calendar days’ notice before divulging the material in any legal proceeding (other than a grand jury proceeding). XII. Retention of Jurisdiction The Court retains jurisdiction to enable any party to this Final Judgment to apply to the Court at any time for further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 any of its provisions, to enforce compliance, and to punish violations of its provisions. XIII. Enforcement of Final Judgment A. The United States retains and reserves all rights to enforce the provisions of this Final Judgment, including the right to seek an order of contempt from the Court. Settling Defendants agree that in a civil contempt action, a motion to show cause, or a similar action brought by the United States relating to an alleged violation of this Final Judgment, the United States may establish a violation of this Final Judgment and the appropriateness of a remedy therefor by a preponderance of the evidence, and Settling Defendants waive any argument that a different standard of proof should apply. B. This Final Judgment should be interpreted to give full effect to the procompetitive purposes of the antitrust laws and to restore the competition the United States alleges was harmed by the challenged conduct. Settling Defendants agree that they may be held in contempt of, and that the Court may enforce, any provision of this Final Judgment that, as interpreted by the Court in light of these procompetitive principles and applying ordinary tools of interpretation, is stated specifically and in reasonable detail, whether or not it is clear and unambiguous on its face. In any such interpretation, the terms of this Final Judgment should not be construed against either party as the drafter. C. In an enforcement proceeding in which the Court finds that any Settling Defendant has violated this Final Judgment, the United States may apply to the Court for an extension of this Final Judgment, together with other relief that may be appropriate. In connection with a successful effort by the United States to enforce this Final Judgment against a Settling Defendant, whether litigated or resolved before litigation, that Settling Defendant agrees to reimburse the United States for the fees and expenses of its attorneys, as well as all other costs including experts’ fees, incurred in connection with that effort to enforce this Final Judgment, including in the investigation of the potential violation. D. For a period of four years following the expiration of this Final Judgment, if the United States has evidence that a Settling Defendant violated this Final Judgment before it expired, the United States may file an action against that Settling Defendant in this Court requesting that the Court order: (1) Settling Defendant to comply with the terms of this Final Judgment for an PO 00000 Frm 00028 Fmt 4701 Sfmt 4703 additional term of at least four years following the filing of the enforcement action; (2) all appropriate contempt remedies; (3) additional relief needed to ensure the Settling Defendant complies with the terms of this Final Judgment; and (4) fees or expenses as called for by this Section XIII. XIV. Expiration of Final Judgment Unless the Court grants an extension, this Final Judgment will expire seven years from the date of its entry, except that after three years from the date of its entry, this Final Judgment may be terminated upon notice by the United States to the Court and Settling Defendants that continuation of this Final Judgment is no longer necessary or in the public interest. Provided, however, that the obligations under Section X will continue as long as one or more of the escrow accounts created under Section X remain open. XV. Reservation of Rights The Final Judgment terminates only the claims expressly stated in the Amended Complaint. The Final Judgment does not in any way affect any other charges or claims filed by the United States subsequent to the commencement of this action, including any charges or claims relating to Growers, integrated Poultry feed, hatcheries, Poultry products, the transportation of Poultry and Poultry products, and the sale of Poultry and Poultry products. XVI. Notice For purposes of this Final Judgment, any notice or other communication required to be filed with or provided to the United States must be sent to the address set forth below (or such other address as the United States may specify in writing to any Settling Defendant): Chief, Civil Conduct Task Force, U.S. Department of Justice, Antitrust Division, 450 Fifth Street, Washington, DC 20530, ATRJudgmentCompliance@ usdoj.gov. XVII. Public Interest Determination Entry of this Final Judgment is in the public interest. The Settling Defendants have complied with the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16, including by making available to the public copies of this Final Judgment and the Competitive Impact Statement, public comments thereon, and any response to comments by the United States. Based upon the record before the Court, which includes the Competitive Impact Statement and, if applicable, any comments and response to comments filed with the E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 Court, entry of this Final Judgment is in the public interest. Date: llllllllllllllll [Court approval subject to procedures of Antitrust Procedures and Penalties Act, 15 U.S.C. 16] United States District Judge lllll Exhibit 1 [Version for Management and Human Resources Staff] [Letterhead of Settling Defendant] [Name and Address of Antitrust Compliance Officer] Dear [XX]: I am providing you this letter to make sure you know about a court order recently entered by a federal judge in [jurisdiction]. This order applies to [Settling Defendant’s] Human Resources Staff and Management as defined in Section II (Definitions) of the attached Final Judgment, including you, so it is important that you understand the obligations it imposes on us. [CEO or President Name] has asked me to let each of you know that s/he expects you to take these obligations seriously and abide by them. Under the order, we are largely prohibited from communicating with other poultry processors, whether directly or indirectly (such as through a consulting agency) about poultry processing plant worker compensation—pay or benefits. This means you may not discuss with any poultry processor or employee of a poultry processor any non-public information about our plant workers’ wages, salaries, and benefits, and you may not ask any poultry processor or employee of a poultry processor for any non-public information about their plant workers’ wages, salaries, and benefits. In addition, we are largely prohibited from sending any non-public information about our processing plant workers’ wages and benefits to any third party, such as a consulting agency. There are only limited exceptions to these prohibitions, which are outlined in Section V (Conduct Not Prohibited) of the Final Judgment. A copy of the court order is attached. Please read it carefully and familiarize yourself with its terms. The order, rather than the above description, is controlling. If you have any questions about the order or how it affects your activities, please contact me. Thank you for your cooperation. Sincerely, [Settling Defendant’s Antitrust Compliance Officer] * * * * * [Version for Consulting Firms and temporary employment agencies] VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 [Letterhead of Settling Defendant] [Name and Address of Antitrust Compliance Officer] Dear [XX]: I am providing you this letter to make sure you know about a court order recently entered by a federal judge in [jurisdiction]. This order applies to [Settling Defendant’s] Consulting Firms as defined in Section II (Definitions) of the attached Final Judgment and temporary employment agencies, including your agency, so it is important that you understand the obligations it imposes on us. [CEO or President Name] has asked me to let each of you know that s/he expects you to take these obligations seriously and abide by them. Under the order, we are largely prohibited from communicating with other poultry processors, whether directly or indirectly (such as through a Consulting Firm or temporary employment agency, including your agency) about poultry processing plant worker compensation—pay or benefits. This means you may not disclose to us any non-public information about another poultry processor’s plant workers’ wages, salaries, and benefits, and you may not provide any nonpublic information about our poultry plant workers’ wages, salaries, and benefits to another poultry processor. In addition, we are largely prohibited from sending any non-public information about our processing plant workers’ wages and benefits to any third party, such as a Consulting Firm or temporary employment agency, including your agency. There are only limited exceptions to these prohibitions, which are outlined in Section V (Conduct Not Prohibited) of the Final Judgment. A copy of the court order is attached. Please read it carefully and familiarize yourself with its terms. The order, rather than the above description, is controlling. If you have any questions about the order or how it affects your activities, please contact me. Thank you for your cooperation. Sincerely, [Settling Defendant’s Antitrust Compliance Officer] United States District Court for the District of Maryland United States Of America, Plaintiff, v. Cargill Meat Solutions Corporation, et al., Defendants. Civil Action No.: 22–cv–1821 (Gallagher, J.) Competitive Impact Statement In accordance with the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)–(h) (the ‘‘Tunney Act’’), the PO 00000 Frm 00029 Fmt 4701 Sfmt 4703 34057 United States of America files this Competitive Impact Statement related to the proposed Final Judgment as to Defendants George’s, Inc. and George’s Foods, LLC (collectively, ‘‘Settling Defendants’’). I. Nature and Purpose of the Proceeding On July 25, 2022, the United States filed a civil Complaint against Cargill Meat Solutions Corp. and Cargill, Inc. (‘‘Cargill’’), Wayne Farms, LLC (‘‘Wayne’’), Sanderson Farms, Inc. (‘‘Sanderson’’), Webber, Meng, Sahl and Company, Inc., d/b/a WMS & Company, Inc. (‘‘WMS’’) and G. Jonathan Meng (‘‘Meng’’). The Complaint alleged that those defendants, together with another data consultant and other poultry processors that combined controlled over 90% of poultry processing jobs nationwide, conspired from 2000 or before to the present to assist their competitors in making compensation decisions, to exchange current and future, disaggregated, and identifiable compensation information, and to facilitate this anticompetitive agreement. These conspirators collaborated on decisions about poultry plant worker compensation, including through the direct exchange of compensation information. This conspiracy suppressed competition in the nationwide and local labor markets for poultry processing. Their agreement distorted the competitive process, disrupted the competitive mechanism for setting wages and benefits, and harmed a generation of poultry processing plant workers by unfairly suppressing their compensation. With the Complaint, the United States also filed two proposed Final Judgments, one with respect to Cargill, Wayne, and Sanderson and one with respect to WMS and Meng (Dkt. Nos. 2 & 3), to settle this lawsuit as to those five defendants. The Tunney Act review process for those settlements is ongoing. On May 17, 2023, the United States filed an Amended Complaint alleging that beginning in 2005 or before, Settling Defendants also participated in the conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborate with their competitors on compensation decisions. The Amended Complaint does not contain additional causes of action or requests for relief. The Amended Complaint alleges that, from 2005 or before to the present, the Settling Defendants and their poultry processing and consultant coconspirators exchanged compensation information through the dissemination of survey reports in which they shared current and future, detailed, and E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 34058 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices identifiable plant-level and job-level compensation information for poultry processing plant workers. The shared information allowed poultry processors to determine the wages and benefits their competitors were paying—and planning to pay—for specific job categories at specific plants. The Amended Complaint further alleges that the Settling Defendants and their co-conspirators met in person at annual meetings. From at least 2005 to 2018, Settling Defendants attended meetings with other poultry processors during which they and the consultant co-conspirators facilitated, supervised, and participated in the exchange of confidential, competitively sensitive information about poultry plant workers. The Settling Defendants’ and their coconspirators’ collaboration on compensation decisions and exchange of competitively sensitive compensation information extended beyond the shared survey reports and in-person annual meetings. As alleged in the Amended Complaint, from 2005 or before to the present, the Settling Defendants and their co-conspirators repeatedly contacted each other to seek and provide advice and assistance on compensation decisions, including by sharing further non-public information regarding each other’s wages and benefits. This demonstrates a clear agreement between competitors to ask for help with compensation decisions and to provide such help to others upon request. In sum, this conspiracy, from at least 2005 to the present, permitted the Settling Defendants and their coconspirators to collaborate with and assist their competitors in making decisions about worker compensation, including wages and benefits, and to exchange information about current and future compensation plans. Through this conspiracy, the Settling Defendants artificially suppressed compensation for poultry processing workers. The Complaint and the Amended Complaint also include a claim alleging that Defendants Sanderson and Wayne acted deceptively in the manner in which they compensated poultry growers in violation of Section 202(a) of the Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 192(a). The Settling Defendants are not defendants as to this claim. At the time the Amended Complaint was filed, the United States also filed a proposed Final Judgment and Stipulation and Order with respect to the Settling Defendants, which is designed to remedy the anticompetitive VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 effects resulting from the harm alleged in the Amended Complaint. The proposed Final Judgment for the Settling Defendants, explained more fully below, requires the Settling Defendants to: a. end their agreement to collaborate with and assist in making compensation decisions for poultry processing workers and their anticompetitive exchange of compensation information with other poultry processors; b. submit to a monitor (determined by the United States in its sole discretion) for a term of seven years, who will examine the Settling Defendants’ compliance with both the terms of the proposed Final Judgment and U.S. federal antitrust law generally, across their entire poultry businesses; and c. provide significant and meaningful restitution to the poultry processing workers harmed by their anticompetitive conduct, who should have received competitive compensation for their valuable, difficult, and dangerous labor. The proposed Final Judgment for the Settling Defendants also prohibits them from retaliating against any employee or third party for disclosing information to the monitor, an antitrust enforcement agency, or a legislature, and includes other terms discussed below. The term of the proposed Final Judgment reflects the significant and voluntary cooperation that Settling Defendants provided in the United States’ investigation into the conduct described in the Complaint, for which the United States is grateful. The Stipulation and Order for the Settling Defendants requires them to abide by and comply with the provisions of the proposed Final Judgment until it is entered by the Court or until the time for all appeals of any Court ruling declining entry of the proposed Final Judgment has expired. The United States has stipulated with the Settling Defendants that the proposed Final Judgment may be entered after compliance with the Tunney Act. Entry of the proposed Final Judgment will terminate this action as to the Settling Defendants, except that the Court will retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final Judgment and to punish violations thereof. PO 00000 Frm 00030 Fmt 4701 Sfmt 4703 II. Description of Events Giving Rise to the Alleged Violation A. The Settling Defendants’ Anticompetitive Agreement To Collaborate on Compensation, Including Through Their Anticompetitive Exchange of Compensation Information The Amended Complaint alleges that the Settling Defendants agreed to collaborate with and assist each other and their co-conspirators in making decisions about wages and benefits for their poultry processing plant workers, exchanged competitively sensitive information, and facilitated the exchange of each other’s competitively sensitive information. This agreement includes over a decade of discussions about current and future compensation plans and exchanges of compensation information between and among the Settling Defendants and their coconspirators, who collectively held market power over local and the nationwide markets for poultry plant workers. This conspiracy, while including detailed exchanges of information about current and future wage and benefit policies and amounts, went well beyond the sharing of information and included individual processor-to-processor consultation and advice-giving on decisions that were competitively sensitive and should have been made independently. From 2005 or earlier to the present, the Settling Defendants and their coconspirators collaborated on compensation decisions, including by discussing, giving advice, and sharing with each other their competitively sensitive compensation information— rather than each individual firm making its own decisions regarding poultry processing plant worker compensation. This collaboration related to compensation topics such as current wages and benefits, planned and contemplated future wage raises, and changes to benefits, at a nationwide level, at a regional level, and at the individual plant or individual job category level. The Settling Defendants and their co-conspirators engaged in such collaborations via correspondence and at annual in-person meetings, at which they explicitly discussed poultry processing plant worker compensation, and to which they brought competitively sensitive compensation information. As part of their collaboration, the Settling Defendants and their coconspirators exchanged confidential, current and future, disaggregated, and identifiable compensation information related to poultry processing workers with each other, both directly and E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 through facilitation by data consultant co-conspirators, from at least 2005 to the present. Their exchange of information through these consultants included an annual survey designed and controlled by the Settling Defendants and their coconspirators. The survey compiled and disseminated information to competitors about current compensation and planned or contemplated changes in plant worker wages and salaries. The survey reported compensation and benefits data for standardized job categories at the Settling Defendants’ and their co-conspirators’ individual processing plants. From their information exchanges, the Settling Defendants knew how, and how much, their competitors were compensating their poultry processing plant workers at both a nationwide and a local level. B. The Competitive Effects of the Conduct The Amended Complaint alleges that the Settling Defendants’ and their coconspirators’ agreement to collaborate on compensation decisions, including through the anticompetitive exchange of compensation information, distorted the competitive mechanism of local and nationwide markets for poultry processing plant labor. By doing so, this conspiracy harmed a generation of poultry processing plant workers by artificially suppressing their wages and benefits for decades. Poultry processors are distinguishable from other kinds of employers from the perspective of poultry processing plant workers. Many poultry processing plant jobs are dangerous and require physical stamina and tolerance of unpleasant conditions. Poultry processing workers also develop common skills or industryspecific knowledge in poultry processing work, making such workers most valuable to other poultry processing plants. Additionally, many poultry processing plant workers face constraints that reduce the number of jobs and employers available to them, limiting the number of competitors for their labor. For example, workers who cannot speak, read, or write English or Spanish can still perform poultry processing plant line work. Similarly, workers with criminal records, probation status, or lack of high school or college education are often able to work at poultry processing plants even when other jobs are not available to them. Finally, many poultry processing plants are located in rural areas, in which workers often have fewer job alternatives—especially for full-time, year-round work—as compared to workers in other areas. Thus, other jobs VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 are not reasonable substitutes for poultry processing plant jobs. In local poultry processing labor markets, defined by the commuting distance between workers’ homes and poultry processing plants, the Settling Defendants and their co-conspirators control more than 80% of poultry processing jobs—and in some areas, likely 100%—and thus collectively have market power in those local markets. The Settling Defendants and their coconspirators also together control over 90% of poultry processing jobs nationwide, giving them market power in the nationwide labor market for poultry processing plant work. The Settling Defendants’ agreement to collaborate on compensation decisions and accompanying exchange of information related to compensation, which was anticompetitive even standing alone, distorted the normal wage-setting and benefits-setting mechanisms in the processor plant worker labor market, thereby harming the competitive process. Because the collaboration and the shared compensation information facilitated by the consultant co-conspirators allowed the Settling Defendants and their coconspirators to understand more precisely what their competitors were paying, or were planning to pay, for processing plant worker compensation, they were able to pay less compensation than they otherwise would have in a competitive labor market. In contrast, the Settling Defendants’ workers lacked any comparable information, a clear asymmetry in the market. In sum, the Settling Defendants’ anticompetitive agreement to collaborate on compensation decisions, exchange of compensation information, and facilitation of such (alongside the facilitation of this conduct by the consultant co-conspirators) suppressed compensation in the local submarkets and the nationwide market for poultry processing plant workers to the detriment of hundreds of thousands of processing plant workers, who were financially harmed by such conduct. III. Explanation of the Proposed Final Judgment The relief required by the proposed Final Judgments will remedy the harm to competition alleged in the Amended Complaint. A. Prohibited Conduct Section IV of the Final Judgment prevents the Settling Defendants from continuing their collaboration and information-sharing with competing poultry processors about poultry processing worker compensation. PO 00000 Frm 00031 Fmt 4701 Sfmt 4703 34059 Paragraphs IV.A and B prohibit Settling Defendants’ employees in management positions or any positions related to compensation from directly or indirectly participating in meetings or gatherings related to compensation for poultry processing workers, communicating with any poultry processor about competitively sensitive information related to poultry processing compensation, or facilitating or encouraging such communications; entering into, attempting to enter into, maintaining, or enforcing any agreement with any poultry processor about compensation for poultry processing workers; or using any such information about another poultry processor’s compensation for poultry processing workers. Accordingly, under the proposed Final Judgment, the Settling Defendants may not collaborate on wages and benefits for their workers or share confidential wage and benefit information with any poultry processor not owned or operated by Settling Defendants, and may not provide confidential wage and benefit information to any consultants that produce reports regarding compensation for poultry processing workers, among other prohibited activities. To ensure that poultry plant workers and third parties are not punished by the Settling Defendants for raising antitrust or other concerns, Paragraph IV.D. of the proposed Final Judgment prohibits the Settling Defendants from retaliating against any employee or third party for disclosing information to the monitor, a government antitrust agency, or a government legislature. B. Monitor Section VI of the proposed Final Judgment provides that the Court will appoint a monitor, selected by the United States in its sole discretion, who will have the power and authority to investigate and report on the Settling Defendants’ compliance with the terms of the Final Judgment and the Stipulation and Order. In addition, the monitor will have the power and authority to investigate and report on the Settling Defendants’ compliance with the U.S. federal antitrust laws. When investigating and reporting on the Settling Defendants’ compliance with the U.S. federal antitrust laws, the monitor may examine all aspects of the Settling Defendants’ poultry businesses, including poultry processing, poultry processing workers, growers, integrated poultry feed, hatcheries, transportation of poultry and poultry products, and the sale of poultry and poultry processing products. E:\FR\FM\25MYN2.SGM 25MYN2 34060 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 The monitor will not have any responsibility or obligation for the operation of the Settling Defendants’ businesses. The monitor will serve at the Settling Defendants’ expense, on such terms and conditions as the United States approves in its sole discretion. The monitor will have the authority to take reasonable steps as, in the United States’ view, may be necessary to accomplish the monitor’s duties and the Settling Defendants must assist the monitor. The monitor will provide periodic reports to the United States and will serve for a term of up to seven years. C. Restitution The Settling Defendants have inflicted financial harm on the hundreds of thousands of poultry plant workers who have labored for them and their coconspirators during the term of the conspiracy alleged in the Amended Complaint. These workers perform jobs that are physically demanding, involve high risk of injury, and require tolerance of unpleasant working conditions, in exchange for wages and benefits from the Settling Defendants and their coconspirators. Because of the conspiracy, those wages and benefits were likely less than they would have been in a free and competitive labor market. For this reason, Section X of the proposed Final Judgment includes a requirement that the Settling Defendants pay restitution to workers harmed by the Settling Defendants’ conduct. The Settling Defendants may satisfy the restitution requirement in the proposed Final Judgment in one of two ways. In an ongoing private antitrust suit brought by a class of nationwide poultry processing workers in this Court, Jien v. Perdue Farms, Inc., No. 1:19-cv-2521 (D. Md.), which involves allegations and claims similar to those in the United States’ Amended Complaint, the Settling Defendants negotiated a settlement with the plaintiff class for $5.8 million. If the Jien Court grants final approval to the Settling Defendants’ Jien settlement, the disbursement process approved by the Jien Court of the Jien settlements satisfies the Settling Defendants’ restitution obligation under Section X of the proposed Final Judgment. Section X of the proposed Final Judgment also sets forth an alternative method by which the Settling Defendants may satisfy their restitution obligations. Under Paragraph X.A. of the proposed Final Judgment, the Settling Defendants must create an escrow account and contribute to that account 10% of the amount of their Jien settlement. Under Paragraphs X.C. and VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 X.D. of the proposed Final Judgment, should the Jien Court not grant final approval of the Settling Defendants’ Jien settlement, the Settling Defendants must transfer to that escrow account the entire amount of their Jien settlement, so that the account would contain the full Jien settlement amount plus the 10% initially required. The United States would then disburse this fund, minus the cost of administration, to the poultry processing plant workers. D. Required Conduct, Compliance, and Inspection The proposed Final Judgment sets forth various provisions to ensure the Settling Defendants’ compliance with the proposed Final Judgment. Paragraph VII.A. of the proposed Final Judgment requires the Settling Defendants to appoint an Antitrust Compliance Officer within 10 days of the Final Judgment’s entry. Under Paragraph VII.C. of the proposed Final Judgment, the Antitrust Compliance Officer must furnish copies of this Competitive Impact Statement, the Final Judgment, and a notice approved by the United States explaining the obligations of the Final Judgment to the Settling Defendants’ management and all employees responsible for evaluating or setting compensation for poultry processing workers, among others. The Antitrust Compliance Officer must also obtain from each recipient a certification that he or she has read and agreed to abide by the terms of the Final Judgment, and must maintain a record of all certifications received. Recipients must also certify that they are not aware of any violation of the Final Judgment or any violation of federal antitrust law. Additionally, the Antitrust Compliance Officer must annually brief each person required to receive a copy of the Amended Complaint, Final Judgment and this Competitive Impact Statement on the meaning and requirements of the Final Judgment and the antitrust laws. The Antitrust Compliance Officer must also annually communicate to all employees that any employee may disclose, without reprisal, information concerning any potential violation of the Final Judgment or the antitrust laws. Paragraph VII.D. of the proposed Final Judgment imposes similar notice provisions on the Settling Defendants to ensure that any poultry processor or consulting firm they contract with related to poultry processing compensation also has notice of the Amended Complaint, Final Judgment, and Competitive Impact Statement. PO 00000 Frm 00032 Fmt 4701 Sfmt 4703 E. Other Provisions For a period of seven years following the date of entry of the Final Judgment, the Settling Defendants must certify annually to the United States that they have complied with the provisions of the Final Judgment. Additionally, upon learning of any violation or potential violation of the terms and conditions of the Final Judgment, the Settling Defendants, within 30 days, must file with the United States a statement describing the violation or potential violation, and must promptly terminate or modify the activity. The proposed Final Judgment requires the Settling Defendants to provide full, truthful, and continuing cooperation to the United States in any investigation or litigation relating to the sharing of compensation information among poultry processors in violation of Section 1 of the Sherman Act, as amended, 15 U.S.C. 1. This cooperation provision requires the Settling Defendants to use their best efforts to effectuate interviews, depositions, and sworn testimony with their current and former employees, officers, directors, and agents and to produce documents, data, and information upon request. The Settling Defendants’ obligation to cooperate lasts for the full term of the proposed Final Judgment or until the conclusion of all investigations and litigations, including appeals, related to sharing poultry processing worker compensation information. Subject to this full, truthful, and continuing cooperation, the Settling Defendants are discharged from any civil or criminal claim by the United States arising from the sharing of compensation information among poultry processors, provided that the information-sharing occurred before the date of the filing of the Amended Complaint and does not include an agreement to fix prices or wages or to divide or allocate markets. To ensure compliance with the Final Judgment, the proposed Final Judgment requires the Settling Defendants to grant the United States access, upon reasonable notice, to the Settling Defendants’ records and documents relating to matters contained in the Final Judgment. Upon request, the Settling Defendants must also make their employees available for interviews or depositions, answer interrogatories, and prepare written reports relating to matters contained in the Final Judgment. The proposed Final Judgment also contains provisions designed to make enforcement of the Final Judgment as effective as possible. The proposed Final Judgment provides that the United E:\FR\FM\25MYN2.SGM 25MYN2 lotter on DSK11XQN23PROD with NOTICES2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices States retains and reserves all rights to enforce the Final Judgment, including the right to seek an order of contempt from the Court. Under the terms of these provisions, the Settling Defendants have agreed that in any civil contempt action, any motion to show cause, or any similar action brought by the United States regarding an alleged violation of the Final Judgment, the United States may establish the violation and the appropriateness of any remedy by a preponderance of the evidence and that the Settling Defendants have waived any argument that a different standard of proof should apply. This provision aligns the standard for compliance with the Final Judgment with the standard of proof that applies to the underlying offense that the Final Judgment addresses. The proposed Final Judgment contains provisions that clarify its interpretation. The proposed Final Judgment is intended to remedy the loss of competition the United States alleges occurred because of the Settling Defendants’ conduct. The Settling Defendants agree that they will abide by the proposed Final Judgment and that they may be held in contempt of the Court for failing to comply with any provision of the proposed Final Judgment that is stated specifically and in reasonable detail, as interpreted in light of this procompetitive purpose. The proposed Final Judgment provides that if the Court finds in an enforcement proceeding that a Settling Defendant has violated the Final Judgment, the United States may apply to the Court for an extension of the Final Judgment, together with such other relief as may be appropriate. In addition, to compensate American taxpayers for any costs associated with investigating and enforcing violations of the Final Judgment, in any successful effort by the United States to enforce the Final Judgment against a Settling Defendant, whether litigated or resolved before litigation, the Settling Defendant must reimburse the United States for attorneys’ fees, experts’ fees, and other costs incurred in connection with that effort to enforce this Final Judgment, including the investigation of the potential violation. The proposed Final Judgment states that the United States may file an action against a Settling Defendant for violating the Final Judgment for up to four years after the Final Judgment has expired or been terminated. This provision is meant to address circumstances such as when evidence that a violation of the Final Judgment occurred during the term of the Final Judgment is not discovered until after VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 the Final Judgment has expired or been terminated or when there is not sufficient time for the United States to complete an investigation of an alleged violation until after the Final Judgment has expired or been terminated. This provision, therefore, makes clear that, for four years after the Final Judgment has expired or been terminated, the United States may still challenge a violation that occurred during the term of the Final Judgment. Finally, the proposed Final Judgment provides that it will expire seven years from the date of its entry, except that after three years from the date of its entry, the Final Judgment may be terminated upon notice by the United States to the Court and the Settling Defendants that continuation of the Final Judgment is no longer necessary or in the public interest. This length of term reflects important cooperation by the Settling Defendants with the United States’ investigation and litigation. Settling Defendants provided significant documents and information to the United States over a lengthy period and on a voluntary basis, which advanced the investigation in meaningful ways. The United States is grateful for this cooperation. IV. Remedies Available to Potential Private Plaintiffs Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any person who has been injured as a result of conduct prohibited by the antitrust laws may bring suit in federal court to recover three times the damages the person has suffered, as well as costs and reasonable attorneys’ fees. Entry of the proposed Final Judgment neither impairs nor assists the bringing of any private antitrust damage action. Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment has no prima facie effect in any subsequent private lawsuit that may be brought against the Settling Defendants. V. Procedures Available for Modification of the Proposed Final Judgment The United States and Settling Defendants have stipulated that the proposed Final Judgment may be entered by the Court after compliance with the provisions of the Tunney Act, provided that the United States has not withdrawn its consent. The Tunney Act conditions entry upon the Court’s determination that the proposed Final Judgment is in the public interest. The Tunney Act provides a period of at least 60 days preceding the effective date of a proposed Final Judgment PO 00000 Frm 00033 Fmt 4701 Sfmt 4703 34061 within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment on the proposed Final Judgment should do so within 60 days of the date of publication of this Competitive Impact Statement in the Federal Register, or the last date of publication in a newspaper of the summary of this Competitive Impact Statement, whichever is later. All comments received during this period will be considered by the U.S. Department of Justice, which remains free to withdraw its consent to the proposed Final Judgment at any time before the Court’s entry of the Final Judgment. The comments and the response of the United States will be filed with the Court. In addition, the comments and the United States’ responses will be published in the Federal Register unless the Court agrees that the United States instead may publish them on the U.S. Department of Justice, Antitrust Division’s internet website. Written comments should be submitted in English to: Chief, Civil Conduct Task Force, Antitrust Division, United States Department of Justice, 450 Fifth St. NW, Suite 8600, Washington, DC 20530, ATRJudgmentCompliance@ usdoj.gov. The proposed Final Judgment provides that the Court retains jurisdiction over this action, and the parties may apply to the Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment. VI. Alternatives to the Proposed Final Judgment As an alternative to the proposed Final Judgment, the United States considered a full trial on the merits against the Settling Defendants. The United States could have commenced contested litigation and brought the case to trial, seeking relief including an injunction against the collaboration on compensation decisions, sharing of compensation information, and facilitation of this conduct, as well as the imposition of a monitor. The United States is satisfied, however, that the relief required by the proposed Final Judgment will remedy the anticompetitive effects alleged in the Amended Complaint against the Settling Defendants, preserving competition in the poultry processing plant labor markets and in the poultry processing industry at large, given the relief secured, including the poultry-businesswide monitor. Thus, the proposed Final Judgment achieves all or substantially all of the relief the United States would E:\FR\FM\25MYN2.SGM 25MYN2 34062 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 have obtained through litigation against the Settling Defendants but avoids the time, expense, and uncertainty of a full trial on the merits. VII. Standard of Review Under The Tunney Act for the Proposed Final Judgment Under the Clayton Act and Tunney Act, proposed Final Judgments, or ‘‘consent decrees,’’ in antitrust cases brought by the United States are subject to a 60-day comment period, after which the Court must determine whether entry of a proposed Final Judgment ‘‘is in the public interest.’’ 15 U.S.C. 16(e)(1). In making that determination, the Court, in accordance with the statute as amended in 2004, is required to consider: (A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and (B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial. 15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, the Court’s inquiry is necessarily a limited one as the government is entitled to ‘‘broad discretion to settle with the defendant within the reaches of the public interest.’’ United States v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the ‘‘court’s inquiry is limited’’ in Tunney Act settlements); United States v. InBev N.V./S.A., No. 08–1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court’s review of a proposed Final Judgment is limited and only inquires ‘‘into whether the government’s determination that the proposed remedies will cure the antitrust violations alleged in the complaint was reasonable, and whether the mechanisms to enforce the final judgment are clear and manageable’’). As the U.S. Court of Appeals for the District of Columbia Circuit has held, under the Tunney Act, a court considers, among other things, the VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 relationship between the remedy secured and the specific allegations in the government’s complaint, whether a proposed Final Judgment is sufficiently clear, whether its enforcement mechanisms are sufficient, and whether it may positively harm third parties. See Microsoft, 56 F.3d at 1458–62. With respect to the adequacy of the relief secured by a proposed Final Judgment, a court may not ‘‘make de novo determination of facts and issues.’’ United States v. W. Elec. Co., 993 F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also Microsoft, 56 F.3d at 1460–62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Instead, ‘‘[t]he balancing of competing social and political interests affected by a proposed antitrust decree must be left, in the first instance, to the discretion of the Attorney General.’’ W. Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ‘‘The court should also bear in mind the flexibility of the public interest inquiry: the court’s function is not to determine whether the resulting array of rights and liabilities is the one that will best serve society, but only to confirm that the resulting settlement is within the reaches of the public interest.’’ Microsoft, 56 F.3d at 1460 (quotation marks omitted); see also United States v. Deutsche Telekom AG, No. 19–2232 (TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding requirements would ‘‘have enormous practical consequences for the government’s ability to negotiate future settlements,’’ contrary to congressional intent. Microsoft, 56 F.3d at 1456. ‘‘The Tunney Act was not intended to create a disincentive to the use of the consent decree.’’ Id. The United States’ predictions about the efficacy of the remedy are to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 1461 (recognizing courts should give ‘‘due respect to the Justice Department’s . . . view of the nature of its case’’); United States v. Iron Mountain, Inc., 217 F. Supp. 3d 146, 152–53 (D.D.C. 2016) (‘‘In evaluating objections to settlement agreements under the Tunney Act, a court must be mindful that [t]he government need not prove that the settlements will perfectly remedy the alleged antitrust harms[;] it need only provide a factual basis for concluding that the settlements are reasonably adequate remedies for the alleged harms.’’ (internal citations omitted)); United States v. Republic Servs., Inc., 723 F. Supp. 2d 157, 160 (D.D.C. 2010) PO 00000 Frm 00034 Fmt 4701 Sfmt 4703 (noting ‘‘the deferential review to which the government’s proposed remedy is accorded’’); United States v. ArcherDaniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (‘‘A district court must accord due respect to the government’s prediction as to the effect of proposed remedies, its perception of the market structure, and its view of the nature of the case.’’). The ultimate question is whether ‘‘the remedies [obtained by the Final Judgment are] so inconsonant with the allegations charged as to fall outside of the ‘reaches of the public interest.’ ’’ Microsoft, 56 F.3d at 1461 (quoting W. Elec. Co., 900 F.2d at 309). Moreover, the Court’s role under the Tunney Act is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its Amended Complaint, and does not authorize the Court to ‘‘construct [its] own hypothetical case and then evaluate the decree against that case.’’ Microsoft, 56 F.3d at 1459; see also U.S. Airways, 38 F. Supp. 3d at 75 (noting that the court must simply determine whether there is a factual foundation for the government’s decisions such that its conclusions regarding the proposed settlements are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (‘‘[T]he ‘public interest’ is not to be measured by comparing the violations alleged in the complaint against those the court believes could have, or even should have, been alleged’’). Because the ‘‘court’s authority to review the decree depends entirely on the government’s exercising its prosecutorial discretion by bringing a case in the first place,’’ it follows that ‘‘the court is only authorized to review the decree itself,’’ and not to ‘‘effectively redraft the complaint’’ to inquire into other matters that the United States did not pursue. Microsoft, 56 F.3d at 1459–60. In its 2004 amendments to the Tunney Act, Congress made clear its intent to preserve the practical benefits of using judgments proposed by the United States in antitrust enforcement, Public Law 108–237 § 221, and added the unambiguous instruction that ‘‘[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene.’’ 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76 (indicating that a court is not required to hold an evidentiary hearing or to permit intervenors as part of its review under the Tunney Act). This language explicitly wrote into the statute what Congress intended when it first enacted the Tunney Act in 1974. As Senator Tunney explained: ‘‘[t]he court is nowhere compelled to go to trial or to E:\FR\FM\25MYN2.SGM 25MYN2 Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES2 engage in extended proceedings which might have the effect of vitiating the benefits of prompt and less costly settlement through the consent decree process.’’ 119 Cong. Rec. 24,598 (1973) (statement of Sen. Tunney). ‘‘A court can make its public interest determination based on the competitive VerDate Sep<11>2014 19:10 May 24, 2023 Jkt 259001 impact statement and response to public comments alone.’’ U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F. Supp. 2d at 17). Dated: May 17, 2023. Respectfully submitted, For Plaintiff United States of America lllllllllllllllllllll PO 00000 Frm 00035 Fmt 4701 Sfmt 9990 34063 Kathleen Simpson Kiernan, U.S. Department of Justice, Antitrust Division, Civil Conduct Task Force, 450 Fifth Street NW, Suite 8600, Washington, DC 20530, Tel: 202–353–3100, Fax: 202–616– 2441, Email: Kathleen.Kiernan@usdoj.gov. [FR Doc. 2023–11058 Filed 5–24–23; 8:45 am] BILLING CODE 4410–11–P E:\FR\FM\25MYN2.SGM 25MYN2

Agencies

[Federal Register Volume 88, Number 101 (Thursday, May 25, 2023)]
[Notices]
[Pages 34030-34063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11058]



[[Page 34029]]

Vol. 88

Thursday,

No. 101

May 25, 2023

Part III





Department of Justice





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Antitrust Division





United States v. Cargill Meat Solutions Corp., et al.; Proposed Final 
Judgment and Competitive Impact Statement; Notice

Federal Register / Vol. 88, No. 101 / Thursday, May 25, 2023 / 
Notices

[[Page 34030]]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Cargill Meat Solutions Corp., et al.; Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the District of Maryland in United 
States of America v. Cargill Meat Solutions Corp., et al., Civil Action 
No. 1:22-cv-01821. On July 25, 2022, the United States filed a 
Complaint against three poultry processors as well as a data consultant 
and its president to end a long-running conspiracy in the poultry 
processing industry. The Complaint alleged that poultry processors 
collectively employing more than 90 percent of all poultry processing 
plant workers in the United States conspired to collaborate with and 
assist their competitors in making decisions about worker compensation, 
including wages and benefits, and to exchange information about current 
and future compensation plans for their processing plant workers, in 
violation of section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint 
also alleged that data consultants facilitated the processors' 
collaboration and compensation information exchanges in violation of 
Section 1 of the Sherman Act, 15 U.S.C. 1.
    On May 17, 2023, the United States filed an Amended Complaint, 
which added settling defendants George's, Inc. and George's Foods, LLC 
(collectively ``George's''), alleging that George's and the 
conspirators participated in the conspiracy to exchange information 
about wages and benefits for poultry processing plant workers and 
collaborated with their competitors on compensation decisions.
    The proposed Final Judgment, filed at the same time as the Amended 
Complaint, requires George's to cease its information-sharing and 
facilitation of such conduct. In addition, George's is prohibited from 
sharing or facilitating the sharing of competitively sensitive 
information among competitors and is required to cooperate with the 
United States' ongoing investigation. Additionally, under the terms of 
the proposed settlement with George's, the court will appoint an 
external monitor to ensure compliance with the terms of the settlement 
and the antitrust laws. George's will also pay restitution to affected 
poultry processing workers.
    Copies of the Amended Complaint, proposed Final Judgment, and 
Competitive Impact Statement are available for inspection on the 
Antitrust Division's website at https://www.justice.gov/atr and at the 
Office of the Clerk of the United States District Court for the 
District of Maryland. Copies of these materials may be obtained from 
the Antitrust Division upon request and payment of the copying fee set 
by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be submitted in English and 
directed to Chief, Civil Conduct Task Force, Antitrust Division, 
Department of Justice, 450 Fifth Street NW, Suite 8600, Washington, DC 
20530 (email address: [email protected]).

Suzanne Morris,
Deputy Director Civil Enforcement Operations, Antitrust Division.

United States District Court for the District of Maryland

    United States of America, 450 Fifth Street NW, Washington, DC 
20530, Plaintiff; v. Cargill Meat Solutions Corporation, 825 East 
Douglas Avenue, 9th Floor, Wichita, KS 67202, Cargill, Inc., 15407 
McGinty Road West, Wayzata, MN 55391, G. Jonathan Meng, 734 Wild 
Rose Road, Silverthorne, CO 80498, George's, Inc., 402 West Robinson 
Avenue, Springdale, AR 72764, George's Foods, LLC, 19992 Senedo 
Road, Edinburg, VA 22824, Sanderson-Wayne Farms, LLC, 4110 
Continental Drive, Oakwood, GA 30566, Webber, Meng, Sahl and 
Company, Inc., d/b/a/WMS & Company, Inc., 1200 E High Street, Suite 
104, Pottstown, PA 19464, Defendants.

Civil Action No.: 22-cv-1821
(Gallagher, J.)

Amended Complaint

    Americans consume more poultry than any other animal protein. 
Before poultry is prepared for consumption, it passes through a complex 
supply chain that includes hatcheries that hatch chicks from eggs; 
growers that raise poultry until the birds are ready for slaughter; and 
poultry processing plants where workers perform dangerous tasks under 
difficult conditions to slaughter and pack chickens and turkeys for 
distribution to consumers.
    Poultry processing plant workers deserve the benefits of free 
market competition for their labor. For at least two decades, however, 
poultry processors that employ more than 90 percent of all poultry 
processing plant workers in the United States conspired to (i) 
collaborate with and assist their competitors in making decisions about 
worker compensation, including wages and benefits; (ii) exchange 
information about current and future compensation plans; and (iii) 
facilitate their collaboration and information exchanges through data 
consultants. This conspiracy distorted the normal bargaining and 
compensation-setting processes that would have existed in the relevant 
labor markets, and it harmed a generation of poultry processing plant 
workers by artificially suppressing their compensation.
    Poultry processors have also engaged in deceptive practices 
associated with the ``tournament system.'' Under this system, growers 
are penalized if they underperform other growers, but poultry 
processors control the key inputs (like chicks and seed) that often 
determine a grower's success. Poultry processors often fail to disclose 
the information that growers would need to evaluate and manage their 
financial risk or compare offers from competing processors.
    To enjoin this unlawful conduct and seek other appropriate relief, 
the United States of America brings this civil action under Section 1 
of the Sherman Act, 15 U.S.C. 1, and Section 202(a) of the Packers and 
Stockyards Act, 7 U.S.C. 192(a).

Table of Contents

I. Nature of the Action
II. Jurisdiction and Venue
III. Terms of Reference
IV. Defendants
    A. Cargill
    B. Sanderson
    C. Wayne
    D. George's
    E. WMS
    F. Jonathan Meng
    G. Co-Conspirators
V. Factual Allegations
    A. Poultry Industry Background
    1. Hatcheries and Growers
    2. Poultry Processing Plants
    3. Poultry Processing Plant Workers and Compensation
    a. Poultry Processing Plant Work and Workers
    b. Competition for Poultry Processing Plant Workers
    c. Setting and Adjusting Plant Worker Compensation
    B. Defendants' Conspiracy To Collaborate on Compensation 
Decisions, Share Compensation Information, and Use Consultants To 
Facilitate Their Conspiracy
    1. WMS Poultry Industry Survey Group
    a. WMS Survey Group History, Rules, and Control by Processor 
Conspirators
    b. Compensation Data Exchanged Through WMS Survey Group

[[Page 34031]]

    c. WMS Survey Group Exchanges by Year, Defendant, and Type of 
Information Exchanged in Surveys and In-Person Meetings
    2. Direct Processor-to-Processor Collaboration and Information 
Exchanges
    a. Chicken Industry Wage Index (``CHIWI'') Exchange
    b. U.S. Poultry & Egg Association Member Processors' Exchanges
    c. Processor Conspirators' Ad Hoc Direct Exchange
    3. Exchange of Compensation Information Through Consultant Co-
Conspirator 1
    4. Processors' Collaboration and Assistance on Compensation
    5. Processors Recognize Their Agreement Likely Violated the 
Antitrust Laws and Attempt To Cover It Up
    C. Defendants Sanderson's and Wayne's Deceptive Practices Toward 
Growers
VI. Elements of the Sherman Act Claim
    A. The Agreement To Collaborate on Compensation Decisions, 
Exchange Compensation Information, and Facilitate Such Collaboration 
and Exchanges
    B. Primary Poultry Processing Plant Employment Is a Relevant 
Labor Market
    C. The Geographic Markets for Poultry Processing Plant Labor
    D. Market Power
    E. Anticompetitive Effects: Processor Conspirators' Conspiracy 
Anticompetitively Affected Decisions About Compensation for Plant 
Processing Workers
VII. Violations Alleged
VIII. Requested Relief

I. Nature of the Action

    1. From chicken noodle soup to golden-roasted Thanksgiving turkey, 
Americans consume more poultry than any other animal protein, including 
beef and pork.
    2. By the time poultry is served in a home kitchen, restaurant, or 
school cafeteria, it has passed through a complex supply chain that 
includes hatcheries, growers (i.e., farmers who raise live poultry for 
meat or eggs), and poultry processors, which employ hundreds of 
thousands of workers who process chicken or turkey for distribution to 
customers or secondary processing plants.
    3. Poultry processing plant workers play a vital role in the 
poultry meat supply chain. These workers catch, slaughter, gut, clean, 
debone, section, and pack chickens and turkeys into saleable meat. Many 
of them withstand physically demanding and often dangerous working 
conditions. For example, a ``live hanger'' in a poultry processing 
plant grabs, lifts, and hangs for slaughter about 30 living birds per 
minute, as each bird claws, bites, and flaps its wings. These workers 
risk injuries ranging from exhaustion to mutilation to provide for 
themselves and their families. In doing so, they help make food 
available to families nationwide.
    4. Like all workers, poultry processing plant workers deserve the 
benefits of free market competition for their labor, including wages 
and benefits that are set through a competitive process that is free 
from anticompetitive coordination between employers. Instead, for at 
least the past 20 years, poultry processors that dominate local 
employment markets for poultry processing plant workers and employ more 
than 90 percent of all such workers in the United States collaborated 
on and assisted each other with compensation decisions. Their 
conspiracy included sharing data and other information--directly and 
through consultants--about their current and future compensation plans. 
Rather than make compensation decisions independently, these processors 
chose to help each other at the expense of their workers. As a result, 
they artificially suppressed compensation in the labor markets in which 
they compete for poultry processing plant workers, and deprived a 
generation of poultry processing plant workers of fair pay set in a 
free and competitive labor market.
    5. Through communications over decades, which occurred in large 
groups, small groups, and one-to-one, these poultry processors agreed 
that they would assist each other by discussing and sharing information 
about how to compensate their poultry processing plant workers. As one 
poultry processor wrote to another about sharing wage rates, ``I am 
interested in sharing this information with you. . . . I am hoping we 
can develop a collaborative working relationship.'' The poultry 
processors' collaboration on compensation decisions, including their 
exchange of compensation information, took many forms over the years of 
the conspiracy. For example:
    a. An employee of one poultry processor emailed eight competitors 
that ``It's that time of year already'' and requested ``your companies 
projected salary budget increase recommendation.'' Her coworker added, 
``Seriously -any info you can give us will be helpful.'' \1\
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    \1\ In quotes throughout the Amended Complaint, all spelling and 
grammatical errors are transcribed as they were found in the primary 
source text, without [sic] notions.
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    b. A group of competing poultry processors exchanged 
``disaggregated raw [identifiable] data regarding the compensation of 
hourly-paid workers . . . broken down by plant and location''; base pay 
and bonuses ``for each specific salaried position'' included in their 
survey; any ``planned increase in the salary range for the current 
budget year''; any ``planned increase in the salary range for the next 
budget year''; the dates of planned future increases; and 
``disaggregated, raw data for some benefits.'' Employees of these 
poultry processors then met in person and discussed specific 
compensation, including attendance bonuses and overtime work payments.
    c. When one poultry processor's human resources employee emailed 
two competitors to ask ``what your starting rate is for these kids 
hired right out of college,'' she noted in the same correspondence that 
her employer was ``in the midst of completely revamping our Plant 
Management Trainee program.'' Without further prompting, her competitor 
shared detailed wage information for its Beginner and Advanced Trainee 
program.
    d. One poultry processor emailed others, ``I had a question for the 
group also. We are trying to determine what is reasonable for salaried 
employee to be compensated for working 6 and/or 7 days in a work week 
when the plant is running . . . Do you pay extra for these extra days 
worked for salaried (exempt) employees?'' and ``If so, how is that 
calculated?''
    e. Nearly the entire poultry industry has subscribed to exchanges 
of information through a data consultant that includes compensation 
information that is so disaggregated that industry participants could 
determine the wages and benefits their competitors pay for specific 
positions at specific plants across the country.
    6. These collaborations demonstrate a clear agreement between 
competitors to ask for help with compensation decisions and to provide 
such help to others upon request. As part of this agreement to 
collaborate, the poultry processors shared information about current 
and future compensation decisions. They also shared disaggregated and 
identifiable information, which could readily be traced to a particular 
competitor or even a particular plant.
    7. Even apart from their collaboration on compensation decisions, 
the poultry processors' information exchanges--standing alone--also 
violated the Sherman Act. The poultry processors, both directly and 
through data consultants, shared compensation information so detailed 
and granular that the poultry processors could determine the wages and 
benefits their competitors were paying--and planning to pay--for 
specific job categories at

[[Page 34032]]

specific plants. The compensation information the poultry processors 
exchanged allowed them to make compensation decisions that benefited 
themselves as employers and suppressed competition among them for 
workers.
    8. Defendants Cargill Meat Solutions Corporation and Cargill, Inc. 
(together, ``Cargill''); George's Inc. and George's Foods, LLC 
(``George's''); Sanderson-Wayne Farms, LLC, a merged entity made up of 
formerly separate firms Sanderson Farms, Inc. (``Sanderson'') and Wayne 
Farms, LLC (``Wayne'') \2\ (collectively, the ``Processor 
Defendants''), as well as Webber, Meng, Sahl & Co., Inc. (``WMS'') and 
WMS President G. Jonathan Meng (``Meng'') (the ``Consultant 
Defendants''), participated in this unlawful conspiracy, together with 
other poultry processors and another consulting firm.\3\
---------------------------------------------------------------------------

    \2\ On July 22, 2022, Cargill and Wayne's parent company, 
Continental Grain Co., announced that a joint venture of Cargill and 
Wayne had acquired Sanderson and would call the merged entity Wayne-
Sanderson Farms. Cargill and Continental Grain Complete Acquisition 
of Sanderson Farms, Cargill, Inc. (July 22, 2022), https://www.cargill.com/2022/cargill-continental-grain-complete-acquisition-sanderson-farms (last accessed May 15, 2023). For the sake of 
clarity and convenience, hereafter, this Amended Complaint will 
address Cargill, Sanderson, and Wayne separately due to their status 
as separate companies during the conduct described.
    \3\ The Amended Complaint labels conspirators other than the 
Defendants with pseudonyms because the United States has an ongoing 
investigation into this conduct.
---------------------------------------------------------------------------

    9. The poultry processors kept much of their collaboration and 
information exchanges secret in an attempt to hide their 
anticompetitive conduct. As a condition for membership in the survey 
exchange facilitated by one data consultant, the poultry processors 
promised that they would keep the compensation information exchanged 
confidential. When the survey group members met to collaborate on 
compensation decisions, they asked and expected the data consultant to 
leave the room when they discussed current and future compensation 
decisions. Even when one processor left the survey due to legal 
concerns in 2012, the poultry processors did not end their 
anticompetitive conduct; the other survey participants continued 
collaborating and exchanging information.
    10. When antitrust authorities and private class-actions began to 
surface anticompetitive conduct in other parts of the poultry industry, 
the poultry processors grew alarmed about the risk that their 
conspiracy would be found out. One of them warned the others about ``a 
private investigator'' who was asking ``questions about the types of 
information we shared at our meeting, the survey and other questions 
that I will simply call `general anti-trust fishing' questions. . . . 
So just a little reminder that the bad-guys are still out there, and 
why we hold strict confidences about discussing wages.''
    11. For at least two decades, poultry processors that dominated 
local markets for poultry processing plant work and controlled more 
than 90 percent of poultry processing plant jobs nationwide agreed to 
help each other make decisions about current and future compensation 
for their hourly and salaried plant workers, to exchange information 
about current and future compensation decisions, and to facilitate such 
exchanges through data consultants. The processors used the information 
they received through their collaboration and exchanges to make 
decisions on compensation for their workers. Indeed, they found it so 
useful that when fear of antitrust liability finally motivated several 
poultry processors to remove disaggregated compensation information 
from their exchanges, one processor complained that the new survey 
``has suffered significant obscuring of results . . . and I would ask--
is it still useful information any longer?''
    12. The agreement to collaborate on compensation decisions and 
exchange information had the tendency and effect of suppressing 
competition for poultry processing workers and thereby suppressing 
these workers' compensation. The poultry processors' conspiracy is a 
scheme among competing buyers of labor (employers) that collectively 
possess market power over the purchase of poultry processing plant 
labor. By conspiring on decisions about compensation, these firms, with 
the assistance of consultants, collaborated to control the terms of 
employment of poultry processing plant jobs. Ultimately, the conspiracy 
gave the poultry processors the ability to suppress competition and 
lower compensation below the levels that would have prevailed in a free 
market.
    13. The agreement to collaborate with and assist competing poultry 
processors in making compensation decisions, to exchange compensation 
information, and to facilitate this conduct through consultants is an 
unlawful restraint of trade in violation of Section 1 of the Sherman 
Act, 15 U.S.C. 1. It should be enjoined.
    14. Defendants Sanderson and Wayne have further acted deceptively 
to their growers, the farmers responsible for raising the poultry for 
slaughter. These Defendants compensate their growers through the 
``tournament system,'' under which growers' base compensation is 
adjusted up or down depending on how each grower performs relative to 
others on defined metrics. But Sanderson and Wayne supply growers with 
the major inputs that contribute to growers' performance, such as 
chicks and feed, and these Defendants' contracts with growers omit 
material information about the variability of the inputs provided to 
growers. Because Sanderson and Wayne do not adequately disclose the 
risk inherent in their tournament systems to growers, growers cannot 
reasonably evaluate the range of potential financial outcomes, manage 
their risks, or compare competing poultry processors. This failure to 
disclose is deceptive and violates the Section 202(a) of the Packers 
and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 192(a). 
These deceptions should be enjoined.

II. Jurisdiction and Venue

    15. Defendants Cargill, George's, Meng, Sanderson, Wayne, and WMS 
have consented to personal jurisdiction and venue in the District of 
Maryland.
    16. Defendant Cargill, Inc. owns and operates facilities, and 
employs workers, in Maryland.
    17. The Consultant Defendants sell services to clients throughout 
the United States, including in Maryland. The Consultant Defendants' 
services included collecting, compiling, and providing data on poultry 
processing worker compensation across the United States, including 
information about poultry processing workers in Maryland.
    18. Each Processor Defendant sells poultry meat throughout the 
United States. As of 2022, poultry processing in the U.S. was a $30 
billion industry. Each Defendant is engaged in interstate commerce and 
activities that substantially affect interstate commerce. The 
collaboration between these Defendants in making compensation 
decisions, including through exchanges of processing plant compensation 
information that involved all Defendants, also substantially affects 
interstate commerce.
    19. The United States brings this action pursuant to Section 4 of 
the Sherman Act, 15 U.S.C. 4, to prevent and restraint Defendants' 
violations of Section 1 of the Sherman Act, 15 U.S.C. 1.
    20. The Court has subject matter jurisdiction under 28 U.S.C. 1331, 
28 U.S.C. 1337, and Section 4 of the Sherman Act, 15 U.S.C. 4, to 
prevent and restrain Defendants from violating

[[Page 34033]]

Section 1 of the Sherman Act, 15 U.S.C. 1.
    21. Venue is proper in this judicial district under Section 12 of 
the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 1391(b), and (c) because 
one or more of the Defendants and co-conspirators transacted business, 
was found, and/or resided in this District; a substantial part of the 
events giving rise to the United States's claims arose in this 
District; and a substantial portion of the affected interstate trade 
and commerce described herein has been carried out in this District. 
The Court has personal jurisdiction over each Defendant under 15 U.S.C. 
22, 5.
    22. Regarding violations by Defendants Sanderson and Wayne of the 
Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 
181 et seq., the Court has jurisdiction under 28 U.S.C. 1345 and 7 
U.S.C. 224.

III. Terms of Reference

    23. This Amended Complaint refers to the consultants and poultry 
processors involved in the conspiracy as follows:
    24. The consultant conspirators include Defendants WMS and G. 
Jonathan Meng (together, the ``Consultant Defendants'') and Consultant 
Co-Conspirator 1.\4\
---------------------------------------------------------------------------

    \4\ As noted above, co-conspirators have been designated with 
pseudonyms because the United States has an ongoing investigation 
into this conduct.
---------------------------------------------------------------------------

    25. The poultry processor conspirators include Cargill, George's, 
Sanderson, and Wayne (together, the ``Processor Defendants''), and 
Processor Co-Conspirators 1 through 7 and 9 through 18, inclusive, 
which are distinct poultry processing companies.
    26. The Processor Defendants, together with Processor Co-
Conspirators 1 through 7 and 9 through 18, inclusive, are the 
``Processor Conspirators.''
    27. Acts in furtherance of the conspiracy to collaborate with and 
assist competitors, to exchange information, and to facilitate such 
collaboration and exchanges can be summarized as detailed on the 
following page:

                     Conduct Involved in Conspiracy
------------------------------------------------------------------------
          Descriptor                    Anticompetitive conduct
------------------------------------------------------------------------
Collaboration on Compensation  Poultry processors attended in-person
 Decisions (``Collaboration     meetings and engaged in direct
 Conduct'').                    communications with their competitors to
                                collaborate with and assist each other
                                in making compensation decisions,
                                including through the direct exchange of
                                compensation information and the
                                indirect exchange of such information
                                facilitated by consultants WMS and
                                Consultant Co-Conspirator 1. Such
                                compensation decisions and compensation
                                information exchanges included current
                                and future, disaggregated, and
                                identifiable confidential compensation
                                information related to poultry
                                processing plant workers. This
                                collaboration was anticompetitive, and
                                it suppressed poultry processing plant
                                worker compensation. Period: 2000 or
                                earlier to present.
Exchange of Compensation       As part of the Processor Conspirators'
 Information Facilitated by     conspiracy to collaborate on
 WMS (``WMS Exchange'').        compensation decisions, they paid
                                Defendants WMS and Jonathan Meng to
                                facilitate a poultry processing plant
                                worker compensation survey, designed and
                                with rules set by the Processor
                                Conspirators, which included the
                                exchange of current and future,
                                disaggregated, and identifiable
                                confidential compensation information
                                related to poultry processing plant
                                workers. This exchange was
                                anticompetitive, and it suppressed
                                poultry processing plant worker
                                compensation. Period: 2000 or earlier to
                                2020.
Exchange of Compensation       As part of the Processor Conspirators'
 Information Facilitated by     conspiracy to collaborate on
 Consultant Co-Conspirator 1    compensation decisions, they submitted
 (``Consultant Co-Conspirator   to and purchased from Consultant Co-
 1 Exchange'').                 Conspirator 1 current, disaggregated,
                                and identifiable confidential
                                compensation information related to
                                poultry processing plant workers. This
                                exchange was anticompetitive, and it
                                suppressed poultry processing plant
                                worker compensation. Period: 2010 or
                                earlier to present.
------------------------------------------------------------------------

IV. Defendants

A. Cargill

    28. Cargill Meat Solutions Corporation is a Delaware company 
headquartered in Wichita, Kansas. Cargill Meat Solutions Corporation 
owns poultry processing plants, employs and compensates the workers in 
these plants, and employs executives and other representatives that set 
compensation for its plant workers throughout the United States. 
Cargill Meat Solutions Corporation participated in the anticompetitive 
compensation information exchanges with representatives of its 
competitors for poultry processing plant workers.
    29. Cargill, Inc. is a privately-held company headquartered in 
Wayzata, Minnesota. Cargill, Inc. is the parent company of Cargill Meat 
Solutions Corporation. Cargill, Inc. participated in the 
anticompetitive compensation information exchanges with representatives 
of its competitors for poultry processing plant workers.
    30. Defendants Cargill, Inc. and Cargill Meat Solutions Corporation 
are referred to collectively as ``Cargill,'' unless otherwise noted for 
specificity.
    31. From at least 2000 until the present, Cargill participated in 
the anticompetitive agreement to collaborate with and assist its 
competitors in making decisions about compensation for poultry 
processing plant workers, including through the exchange of current and 
future, disaggregated, and identifiable wage and benefit information, 
by engaging in the following conduct in the following years:
    a. Collaboration Conduct: at least 2000 to present;
    b. WMS Exchange: 2000-2019; and
    c. Consultant Co-Conspirator 1 Exchange: 2010 to present.
    32. As a result of its anticompetitive conduct, Cargill set and 
paid artificially suppressed wages and benefits for its hourly and 
salaried poultry processing plant workers.

B. Sanderson

    33. Sanderson is a Mississippi company headquartered in Oakwood, 
Georgia. Continental Grain Company is the controlling shareholder of 
Sanderson. Sanderson owns poultry processing plants, employs and 
compensates the workers in these plants, and employs executives and 
other representatives that set compensation for its plant workers 
throughout the United States.
    34. From at least 2000 until the present, Sanderson participated in 
the anticompetitive agreement to collaborate with and assist its 
competitors in making decisions about compensation for poultry 
processing plant workers, including through the exchange of current and 
future, disaggregated, and identifiable wage and benefit information, 
by engaging in the

[[Page 34034]]

following conduct in the following years:
    a. Collaboration Conduct: at least 2000 to present;
    b. WMS Exchange: 2000-2011; and
    c. Consultant Co-Conspirator 1 Exchange: 2010 to present.
    35. As a result of its anticompetitive conduct, Sanderson set and 
paid artificially suppressed wages and benefits for its hourly and 
salaried poultry processing plant workers.

C. Wayne

    36. Wayne is a Delaware company headquartered in Oakwood, Georgia. 
Continental Grain Company is the controlling shareholder of Wayne. 
Wayne owns poultry processing plants, employs and compensates the 
workers in these plants, and employs executives and other 
representatives that set compensation for its plant workers throughout 
the United States.
    37. From at least 2000 until the present, Wayne participated in the 
anticompetitive agreement to collaborate with and assist its 
competitors in making decisions about compensation for poultry 
processing plant workers, including through the exchange of current and 
future, disaggregated, and identifiable wage and benefit information, 
by engaging in the following conduct in the following years:
    a. Collaboration Conduct: at least 2000 to present;
    b. WMS Exchange: 2000-2019; and
    c. Consultant Co-Conspirator 1 Exchange: 2010 to present.
    38. As a result of its anticompetitive conduct, Wayne set and paid 
artificially suppressed wages and benefits for its hourly and salaried 
poultry processing plant workers.

D. George's

    39. George's, Inc. is a privately-held Arkansas corporation 
headquartered in Springdale, Arkansas. George's, Inc. owns poultry 
processing plants, employs and compensates the workers in these plants, 
and employs executives and other representatives that set compensation 
for its plant workers throughout the United States. George's, Inc. 
participated in the anticompetitive compensation information exchanges 
with representatives of its competitors for poultry processing plant 
workers.
    40. George's Foods, LLC is a Virginia corporation headquartered in 
Edinburg, Virginia. George's, Inc. and George's Foods, LLC are 
affiliates. George's Foods, LLC operates a poultry complex in 
Harrisonburg, Virginia, and employs and compensates the complex's 
poultry workers. George's Foods, LLC participated in the 
anticompetitive compensation information exchanges with representatives 
of its competitors for poultry processing plant workers.
    41. Defendants George's, Inc. and George's Foods, LLC are referred 
to collectively as ``George's,'' unless otherwise noted for 
specificity.
    42. From at least 2005 until the present, George's participated in 
the anticompetitive agreement to collaborate with and assist its 
competitors in making decisions about compensation for poultry 
processing plant workers, including through the exchange of current and 
future, disaggregated, and identifiable wage and benefit information, 
by engaging in the following conduct in the following years:
    d. Collaboration Conduct: at least 2005 to present;
    e. WMS Exchange: 2005-2018; and
    f. Consultant Co-Conspirator 1 Exchange: 2010 to present.
    43. As a result of its anticompetitive conduct, George's set and 
paid artificially suppressed wages and benefits for its hourly and 
salaried poultry processing plant workers.

E. WMS

    44. WMS is a Pennsylvania corporation located in Pottstown, 
Pennsylvania. WMS provides compensation consulting services, including 
through the use of compensation surveys, for clients in a broad range 
of industries.
    45. From 2000 to 2020, WMS administered surveys that facilitated 
the Processor Conspirators' conspiracy by gathering, sorting, and 
disseminating disaggregated and identifiable information about current 
and future compensation for poultry processing plant workers.
    46. From 2000 to 2002 and 2004 to 2019, WMS also facilitated, 
supervised, and participated in in-person meetings at which the 
Processor Conspirators assembled to discuss current and future, 
disaggregated, and identifiable poultry processing plant worker 
compensation decisions and information.
    47. Through its administration of surveys and participation at 
annual in-person meetings of the Processor Conspirators, WMS 
facilitated the Processor Conspirators' sharing of their confidential, 
competitively sensitive information about compensation for poultry 
processing plant workers.
    48. WMS's involvement in this conspiracy artificially suppressed 
compensation for poultry processing plant workers.

F. Jonathan Meng

    49. G. Jonathan Meng is an individual residing in the State of 
Colorado. Since 2000, Meng has been the President of WMS.
    50. From 2000 to the present, Meng has had primary responsibility 
at WMS for designing and presenting compensation surveys, collecting 
survey data, developing new clients, maintaining client relationships, 
and obtaining payment for services rendered.
    51. Meng personally administered and supervised WMS's surveys, 
which disseminated the Processor Conspirators' current and future, 
disaggregated, and identifiable information about compensation for 
poultry processing plant workers.
    52. From 2000 until 2019, Meng, representing WMS, also facilitated, 
supervised, and participated in in-person meetings at which the 
Processor Conspirators assembled to discuss current and future, 
disaggregated, and identifiable poultry processing plant worker 
compensation information.
    53. By administering and supervising the surveys and meetings of 
the poultry processing defendants, Meng facilitated the Processor 
Conspirators' sharing of confidential, competitively sensitive 
information about compensation for poultry processing plant workers.
    54. Meng's facilitation of this conspiracy artificially suppressed 
compensation for poultry processing plant workers.

G. Co-Conspirators

    55. Several entities conspired with the Defendants during the 
following years to collaborate with and assist competing poultry 
processors in making compensation decisions, to exchange compensation 
information, and to facilitate this conduct: Consultant Co-Conspirator 
1 (at least 2010 to the present); Processor Co-Conspirator 1 (at least 
2002 to the present); Processor Co-Conspirator 2 (at least 2015 to the 
present); Processor Co-Conspirator 3 (at least 2010 to the present); 
Processor Co-Conspirator 4 (at least 2004 to the present); Processor 
Co-Conspirator 5 (at least 2014 to the present); Processor Co-
Conspirator 6 (at least 2000 to the present); Processor Co-Conspirator 
7 (at least 2000 to the present); Processor Co-Conspirator 9 (at least 
2014-2015); Processor Co-Conspirator 10 (at least 2009 to the present); 
Processor Co-Conspirator 11 (at least 2005 to the present); Processor 
Co-Conspirator 12 (at least 2010 to the present); Processor Co-
Conspirator 13 (at least 2009 to the present); Processor Co-Conspirator 
14

[[Page 34035]]

(at least 2000 to the present); Processor Co-Conspirator 15 (at least 
2000 to the present); Processor Co-Conspirator 16 (at least 2014 to the 
present); Processor Co-Conspirator 17 (at least 2019 to the present); 
and Processor Co-Conspirator 18 (at least 2000 to the present).

V. Factual Allegations

A. Poultry Industry Background

1. Hatcheries and Growers
    56. Poultry are domesticated fowl, including chicken and turkey, 
bred for their meat and eggs.
    57. Poultry processors own hatcheries, in which they hatch chicks 
or poults (baby turkeys) from eggs. Poultry processors supply these 
young birds to growers. Growers are farmers who raise the birds to 
specifications set by, and with feed and supplies provided by, the 
poultry processors with which they contract. When the growers have 
finished raising the birds and the birds are ready for slaughter, the 
processors pay the growers for their services per pound of poultry.
    58. This arrangement allocates substantial risk from the poultry 
processors to growers. Many poultry processors historically compensate 
growers through a tournament system. Processors control the chicks or 
poults, feed, and other inputs that are supplied to growers. The 
grower, in addition to raising the chicks, often must make substantial 
financial investments to build or improve chicken barns to meet the 
processor's specifications. Growers are compensated through a base 
payment set in a contract between the processor and the grower. But the 
processor can adjust the base payment up or down based on how a grower 
compares to other growers (which the processor selects) on production 
and efficiency metrics. In practice, these ``performance'' adjustments 
make it very difficult for growers to project and manage the risk they 
face when entering a contract with a processor--particularly since 
processors control the key inputs to poultry growing.
    59. Growers' contracts often do not disclose the true financial 
risk that the grower faces, including basic information like the number 
and size of flocks they are guaranteed. Similarly, growers often do not 
receive disclosures that would allow them to assess the tournament 
system. Growers often have little or no choice in which processor they 
contract with because there are limits to how far live poultry can be 
transported, and therefore only processors with nearby facilities are 
reasonable options.
2. Poultry Processing Plants
    60. Once grown, the birds are packed into trucks and driven to 
primary poultry processing plants. Primary poultry processing plants 
tend to be built near hatcheries and growing facilities, which are 
usually in rural areas.
    61. Once the birds arrive at primary processing plants, poultry 
processing plant workers take the birds from the trucks and hang, 
slaughter, clean, segment, and pack the meat. This work is generally 
performed on a poultry processing line, where workers perform the same 
task repeatedly. Poultry processing plants are kept at cold 
temperatures to preserve the meat processed inside. The machinery 
necessary to process poultry carcasses and meat products is very loud, 
making it difficult for workers on the poultry processing line to hear 
and communicate. Slaughtering and packing poultry often results in 
blood and gore covering work surfaces and workers' protective gear. 
Moreover, the meat and byproducts of the slaughter process create a 
foul-smelling atmosphere that is slippery from fat, blood, and other 
byproducts and waste from the slaughter process.
    62. Processing plants employ salaried workers to manage this 
slaughter process and ensure that the processing plants comply with 
relevant health and safety laws, among other things.
    63. Meat from the birds slaughtered in primary processing plants is 
either sold to customers (e.g., grocery stores, restaurants, and other 
retailers) or sent to secondary processing plants at which the meat is 
further prepared for consumption, such as being sliced for deli packs 
or breaded.
3. Poultry Processing Plant Workers and Compensation
a. Poultry Processing Plant Work and Workers
    64. According to the U.S. Bureau of Labor Statistics, over 240,000 
people worked in the U.S. poultry processing industry as of June 2020. 
Some of these workers worked in Maryland.
    65. Many poultry processing plant jobs require physical stamina 
because they are performed standing on the poultry processing line. 
These jobs also demand tolerance of unpleasant conditions including low 
temperatures, bad odors, blood and viscera, loud machinery noise, and, 
in some cases, dim lighting. Poultry processing plant work also can be 
dangerous, including because of the risk of injury from cutting 
instruments and repetitive-motion tasks. Many workers must stand on the 
processing line repeating the same rapid motions continuously. These 
motions can involve handling live, clawed birds, heavy lifting, and the 
use of sharp cutting instruments, all of which are physically demanding 
and involve a high risk of injury.
    66. In a competitive labor market, employers compete to attract and 
retain workers--much like manufacturers compete to attract potential 
customers in a downstream product market. Poultry processing plants 
compete with each other to attract workers who can perform this 
difficult work, and potential and current poultry processing plant 
workers seek out employers that will provide the best compensation for 
their labor.
    67. Many jobs in poultry processing plants present unique 
characteristics that make it difficult for workers to switch to a 
different kind of job. The difficulty of switching to other jobs is 
enhanced by the specific skills developed and circumstances faced by 
workers in poultry processing firms. Workers in poultry processing 
plants often face constraints that reduce the number of jobs and 
employers available to them, limiting the number of competitors for 
their labor. Poultry processing plant workers also share common 
attributes that they bring with them to their jobs and develop common 
skills when performing these jobs. As a result of these poultry 
processing plant workers' common constraints, attributes, and skills, 
poultry processors are distinguishable from other kinds of employers 
from the perspective of poultry processing plant workers.
    68. Common constraints facing poultry processing plant workers: 
Many poultry processing plant workers face constraints in finding 
employment that greatly restrict their job options. For these workers, 
poultry processing plants offer opportunities that are not available in 
other industries. Workers who cannot speak, read, or write English or 
Spanish, for example, can still perform poultry processing plant line 
work, which is primarily physical labor and done under conditions so 
loud as to make speaking and hearing difficult. Similarly, workers with 
criminal records, probation status, or lack of high school or college 
education are often able to work at poultry processing plants even when 
other jobs are not available to them. These workers distinguish poultry 
processors, whose doors remain open to them, from employers in other 
industries, in which jobs are not available to them.
    69. In addition, many poultry processing plants are located in 
rural areas, in which workers often have

[[Page 34036]]

fewer job alternatives--especially for full-time, year-round work--as 
compared to workers in other areas.
    70. Poultry processing workers' inability to access jobs in many, 
and sometimes any, other industries that would provide them with steady 
and year-round work is evidenced by the conditions these workers 
tolerate.
    71. Common attributes of poultry processing plant jobs: As 
discussed above, poultry processing plant workers must be able to 
tolerate particularly challenging working conditions. An employer that 
requires a particular trait in its employees will generally recruit and 
retain workers with that trait by offering compensation or other 
inducements that are more attractive than those offered to these 
workers by employers that do not value that trait. This makes such an 
employer distinguishable and more appealing to such employees, who have 
that trait. The physical stamina and other attributes required for 
poultry processing plant work mean that poultry processors will 
compensate or otherwise reward workers who possess those attributes 
more highly than employers in other industries. From the perspective of 
the prospective poultry processing plant worker, poultry processing 
plant jobs are distinguishable from and likely more valuable than other 
lower-paid work that does not value and reward such attributes. In 
other words, other jobs are not reasonable substitutes for poultry 
processing plant jobs.
    72. Common skills of poultry processing plant workers: Poultry 
processing plant workers develop special skills on the job. Workers 
learn these skills through the repetitive and, at times, difficult or 
dangerous tasks they perform on the poultry processing line. Poultry 
processing plant workers learn how to handle and slaughter live birds, 
wield knives and blades, section poultry carcasses, clean meat in a 
manner consistent with health and safety standards, manage other 
workers performing these tasks, examine and repair the necessary 
machinery, maintain health and safety standards, and, crucially, 
perform these tasks efficiently so as not to slow down the plant line. 
Workers in management or other less physically demanding jobs also 
build industry-specific skills, including expertise in effective plant 
management and retention of employees. Just as with the common 
attributes of poultry processing plant workers who take plant jobs, the 
common skills of workers who stay and learn plant jobs help to define 
the relevant labor market. Not all potential workers can develop these 
important skills, and many fail out of poultry processing plant jobs 
within weeks. A worker with the skills to succeed on the line is most 
valuable to other poultry processing plants--and thus will receive the 
most compensation from poultry processors. Thus, from the workers' 
perspective, poultry processing plants are not reasonable substitutes 
for other employers.
b. Competition for Poultry Processing Plant Workers
    73. The Processor Conspirators, which compete to hire and retain 
poultry processing plant workers, control more than 90 percent of 
poultry processing plant jobs nationwide. In some local areas, they 
control more than 80 percent of these jobs.
    74. These poultry processors use similar facilities, materials, 
tools, methods, and vertically-integrated processes to produce 
processed poultry and downstream products in which they compete for 
sales to similar sets of customers. They also compete with each other 
for processing plant workers.
    75. Poultry processors recruit workers in many different ways. They 
advertise for workers, use recruitment agencies, and rely on word of 
mouth or personal connections, sometimes offering referral bonuses, to 
attract friends or family of existing workers to come to their plants. 
The processors recruit workers in their plants' local areas but also 
more broadly. For example, poultry processors sometimes target workers 
in other states and even internationally.
c. Setting and Adjusting Plant Worker Compensation
    76. Poultry processors compensate hourly and salaried plant workers 
through wages and benefits.
    77. Hourly poultry processing plant workers' wages typically 
consist of a base pay rate set according to their role, with upward 
adjustments or bonuses offered based on factors including seniority, 
skill, productivity, and shift time. Salaried poultry processing plant 
workers' wages typically consist of annual salaries and may include 
annual or performance bonuses.
    78. Processing plants also typically offer benefits to their hourly 
and salaried workers. These benefits can include personal leave, sick 
leave, health and medical insurance, other types of insurance, and 
retirement plans or pensions, among others.
    79. Poultry processors also control working conditions within their 
plants, which can affect a poultry processing plant worker's job 
experience. These conditions include the quality of mechanical and 
safety equipment at the plant, temperature, and the speed at which the 
plant line moves, which determines the speed at which the workers have 
to perform their work.
    80. Poultry processors typically make certain compensation-related 
decisions at the corporate level, which affect their workers 
nationwide. For example, poultry processors generally set overall labor 
compensation budgets, some plant worker wages, and some plant worker 
benefits in a centralized manner and at the national level. To 
illustrate, an executive at a poultry processor who manages 
compensation for the entire company may determine the health benefits 
for all of the line workers at all of the company's plants.
    81. Poultry processors also typically adjust some wages and 
benefits at the corporate level, but for a regional or local area, on 
the basis of local factors. For example, an executive managing 
compensation for an entire poultry processing company may consider a 
particular plant's needs and the pay at other nearby plants when 
deciding the base rate per hour for shoulder cutters on the plant line. 
As a result, shoulder cutters across all of the processor's plants may 
receive different base rates.

B. Defendants' Conspiracy To Collaborate on Compensation Decisions, 
Share Compensation Information, and Use Consultants To Facilitate Their 
Conspiracy

    82. The Processor Conspirators, facilitated by the Consultant 
Defendants and Consultant Co-Conspirator 1, collaborated on 
compensation decisions, including by exchanging competitively sensitive 
information about plant worker compensation. The exchange of such 
compensation information, much of it current or future, disaggregated, 
or identifiable in nature, allowed the poultry processors to discuss 
the wages and benefits they paid their poultry processing plant 
workers. This section of the Amended Complaint first describes the 
nature of their conspiracy in broad terms and then details some 
specific examples of the conspirators' collaboration and exchanges of 
information.
    83. The Processor Conspirators collaborated with and sought 
assistance from each other when making decisions about wages and 
benefits for their poultry processing plant workers. These decisions 
should have been made independently. As a result, rather than competing 
for workers through better wages or benefits, the Processor 
Conspirators helped each other make compensation decisions.

[[Page 34037]]

    84. The compensation information that poultry processors exchanged 
included information for both hourly and salaried plant jobs. Through 
the exchanges, a poultry processor could learn its competitors' base 
wage rates for a host of different poultry processing plant jobs, from 
live hangers to shoulder cutters to plant mechanics.
    85. Through emails, surveys, data compilations, and meetings, the 
Processor Conspirators assembled a ``map'' of poultry processing plant 
worker compensation across the country. This ``map'' was broad enough 
to show nationwide budgets and granular enough to show compensation at 
individual poultry processing plants. The exchanges allowed the poultry 
processors to learn not only the current state of compensation in their 
industry but also, in some cases, plans for the next year's 
compensation. The poultry processors exchanged information about 
nationwide, regional, and local wages and benefits.
    86. As one example, in December 2009, Processor Co-Conspirator 18's 
Director of HR emailed Processor Co-Conspirator 14's Compensation 
Manager seeking a chart of information about Processor Co-Conspirator 
14's current start rates and base rates for certain workers at specific 
Processor Co-Conspirator 14 plants in Maryland, Delaware, Virginia, 
North Carolina, South Carolina, Tennessee, Kentucky, and Alabama. 
Processor Co-Conspirator 18's Director of HR also asked Processor Co-
Conspirator 14's Compensation Manager, ``if you have negotiated, 
scheduled increases please list, or if it is a non-union facility and 
they have an annual increase just tell me that and what month.'' In the 
Processor Co-Conspirator 18 employee's own words, the purpose of this 
request, and the survey Processor Co-Conspirator 18 was building at the 
time (the Chicken Industry Wage Index, discussed below), was ``to use 
the data to set wage rates and use when negotiating with the Union. . . 
. I am interested in sharing this information with you. . . . I am 
hoping we can develop a collaborative working relationship. I 
appreciate you taking the time to speak to me today and supplying this 
information to me'' (emphasis added). Processor Co-Conspirator 14 
responded, ``See completed information below,'' filling out the chart 
as its competitor and collaborator Processor Co-Conspirator 18 
requested.
    87. The conspiracy reduced incentives for the Processor 
Conspirators to bid up salaries to attract experienced workers or 
retain workers that might have left for other processing plants. The 
detailed knowledge of their competitors' current and future 
compensation gave each Processor Conspirator a path to paying its own 
poultry processing plant workers less than it would have absent the on-
demand access they possessed to current and future, disaggregated, and 
identifiable information about its competitors.
    88. The Processor Conspirators took pains to keep their 
collaboration secret, and they controlled which processors could 
participate in their information exchanges.
    89. The conspiracy brought together rival poultry processors that 
competed with each other for workers. In a functioning labor market, 
the Processor Conspirators would have avoided sharing such 
confidential, competitively-sensitive compensation information. Their 
agreement distorted the mechanism of competition between poultry 
processors for poultry processing plant workers. This competitive 
distortion resulted in compensation that was not determined 
competitively but rather was suppressed--less than what workers would 
have been paid but for the anticompetitive conduct.
    90. Unlike the Processor Conspirators, many of which are large, 
sophisticated corporate entities, the poultry processing plant workers 
lacked access to a comparable ``map'' of poultry processing plant 
compensation. To understand the wages they could earn, whether at 
plants in their local region or far across the country, workers had to 
rely on word-of-mouth or their own time- and labor-intensive research. 
These workers suffered from deep information asymmetries as a result of 
the Processor Conspirators' and Consultant Defendants' anticompetitive 
conduct.
1. WMS Poultry Industry Survey Group
    91. From at least 2000 to 2020, a group of poultry processors, 
including all Processor Conspirators, agreed to participate in an 
exchange of compensation information facilitated by Defendant WMS (the 
``WMS Survey Group'').
    92. Through the WMS Survey Group, all of the Processor Conspirators 
exchanged current and future, disaggregated, and identifiable 
information about their plant workers' wages and benefits. They also 
met annually in person to discuss these exchanges. At these meetings, 
the Processor Defendants shared additional compensation information and 
collaborated on compensation decisions.
a. WMS Survey Group History, Rules, and Control by Processor 
Conspirators
    93. Before 2000 and potentially as early as the 1980s, many of the 
Processor Conspirators, including Defendants Cargill, Sanderson, and 
Wayne, as well as Processor Co-Conspirators 6, 7, 14, 15, 17, and 18, 
participated in a group similar to the WMS Survey Group, but in which 
they directly exchanged compensation data with each other without the 
participation of WMS.
    94. Beginning in 2000, the Processor Conspirators hired WMS and 
Defendant Jonathan Meng to provide a veneer of legitimacy for their 
collaboration and information exchange.
    95. Meng believed that in hiring him and WMS, the Processor 
Conspirators were not trying to comply with the antitrust laws, but 
instead were trying ``to establish the appearance of compliance with 
the Safe Harbor guidelines and antitrust law and obtain compensation 
data in a matter that sometimes seemed permissible.'' By ``Safe 
Harbor,'' Meng was referring to guidance antitrust authorities have 
provided about how companies can reduce the likelihood that an exchange 
of information between competitors is unlawful. Although this guidance 
does not immunize any competitor information exchange from the 
antitrust laws (and has never done so), the Defendants and Co-
Conspirators were sharing the type of information that the guidance 
specifically identified as likely to violate the antitrust laws.
    96. While Defendant WMS began administering the survey in 2000--
issuing the survey forms, receiving responses from the participants, 
distributing the results, and presenting them in person every year at 
their annual meeting--the Processor Conspirators together controlled 
the categories of compensation information included in the survey and 
the requirements for group membership. The processors made these 
decisions through the WMS Survey Group's Steering Committee, on which 
Processor Co-Conspirators 6, 7, 14, 15, and 18 sat on a rotating basis 
from 2000 through 2020. The Steering Committee, along with the other 
WMS Survey Group participants, including Defendants Cargill, George's, 
Sanderson, and Wayne and Processor Co-Conspirators 3 and 17, voted on 
potential new members in the WMS Survey Group. Thus, while WMS 
facilitated this scheme, including by collecting the information and 
tabulating the results, the Processor Conspirators themselves decided 
to collaborate on compensation decisions

[[Page 34038]]

and exchange anticompetitive compensation information.
    97. Processor Co-Conspirator 5's successful attempt to join the WMS 
Survey Group in October 2014 highlights the group's membership 
standards and what motivated poultry processors from across the country 
to join. Processor Co-Conspirator 5's representative emailed Defendant 
WMS and Processor Co-Conspirators 6, 7, and 18, explaining, ``I was 
recently told of a committee/group that had gotten together in the past 
to talk about compensation in the poultry industry. I know we deal with 
a slightly different bird here at [Processor Co-Conspirator 5] than 
[Processor Co-Conspirator 6] and probably the majority in your group, 
but I would be interested in participating in that group if you think 
it would be appropriate. . . . If you're open to Midwestern Turkey 
company participating in this . . . I'd love to be considered.'' An 
executive from Processor Co-Conspirator 6 responded, volunteering to 
send the request to the Steering Committee and noting that participants 
in the survey ``need[ ] to meet certain requirements that indicate you 
fit into the data study (ex. Number of plants, etc. . .).'' After some 
discussion among Defendant WMS and Processor Co-Conspirators 6, 7, 14, 
and 18, an executive from Processor Co-Conspirator 7 noted, 
``Traditionally, if they meet the size criteria and there are no 
`naysayers' from the existing party, they get the welcome handshake, 
no?''
    98. In contrast, Meng detailed what occurred when, in 2014, some of 
the WMS participants considered including ``red meat processing 
complexes'' in the survey: the ``processors ultimately rejected that 
possibility.'' Meng stated in a sworn declaration to this Court, ``The 
reason why those processors declined to include the red meat processors 
in the [WMS Survey Group] is because the poultry processing labor 
market is distinct from the red meat processing labor market. Several 
of those processors told me this, and it is also evident to me from my 
own review of the markets.'' \5\
---------------------------------------------------------------------------

    \5\ Meng filed his declaration before this Court on February 4, 
2022 as ECF No. 580-4 in Jien v. Perdue Farms, Inc., 19-cv-2521 (D. 
Md.).
---------------------------------------------------------------------------

    99. Members of the WMS Survey Group were required to attend each 
annual in-person meeting as a condition of participating in the 
compensation collaboration and information-exchange group. If a poultry 
processor did not attend regularly, it could be kicked out. As an 
executive for Processor Co-Conspirator 7 explained, ``Normally, any 
company that doesn't participate in the survey and attend for 2 
consecutive years is removed from participation.'' This policy 
demonstrates that the opportunity to collaborate in person was an 
important feature of the WMS Survey Group.
b. Compensation Data Exchanged Through WMS Survey Group
    100. Attendees at the annual WMS Survey Group in-person meeting 
brought their current and future, disaggregated, and identifiable 
compensation data with them. The attendees then discussed that 
information confidentially. As one 2009 communication from Processor 
Co-Conspirator 6 to Defendants Cargill, George's, Sanderson, and Wayne, 
Processor Co-Conspirators 1, 4, 7, 15, and 18, and Former Processor Co-
Conspirator 2 put it: ``Hope all are planning to be there for the 
meeting. Just a reminder to bring you Data manual in case others have 
questions for you concerning your data. Please be prepared to discuss 
survey issues, questions, and details with WMS. We will also be sharing 
information in a round table discussion. These discussions are expected 
to be kept confidential'' (emphasis added).
    101. As Meng explained, ``In earlier years, the attendees typically 
brought this data to the roundtable sessions in hard-copy form using 
large binders. In later years, the attendees brought their laptop 
computers, which contained all the compensation data in electronic 
form.''
    102. Through the WMS Survey Group, the Processor Defendants, 
facilitated by Defendant WMS, exchanged current and future, 
disaggregated, and identifiable data about their poultry processing 
plant worker compensation on an annual basis. The Processor Defendants 
gave each other accurate, detailed, and confidential information: as 
Defendant George's put it, ``The information obtained through 
participation can't be overstated.''
    103. Through a single annual WMS survey or potentially a single in-
person meeting, a processor could understand trends in poultry 
processing plant worker compensation nationwide. This information was 
especially important to processors competing for workers willing to 
move, even internationally, for plant work. But the Processor 
Conspirators also could compare notes on plant compensation in a 
particular local area to understand, for example, how one processor's 
base wage rate for line workers in a particular county compared to a 
nearby competitor's.
    104. As detailed below, over many years, the poultry processors in 
the WMS Survey Group used the surveys and in-person meetings to compare 
planned future raises or changes in plant worker compensation. WMS's 
Meng explained that ``members of the [WMS Survey Group] said they 
wanted to know how much and when their competitors were planning to 
increase salaries and salary ranges.'' Comparing processors' 
compensation projections from the past year against their actual 
compensation levels in the current year revealed whether the Processor 
Conspirators had held to the prior year's projections, making any 
deviations from prior exchanged information easily detectible. This 
ability to check the information shared across time encouraged the 
participants to submit accurate information, because deviations between 
projected and actual compensation levels would be apparent. The 
Processor Conspirators' sharing of future compensation plans could also 
have disincentivized them from making real-time compensation changes to 
better compete against each other, maintaining wages at their projected 
levels and suppressing wages that might otherwise have risen through 
natural, dynamic competition.
    105. From 2005 through 2017, the WMS survey showed future data, 
such as the median and average future salary merit increase for each 
company involved in the survey. From 2006 through 2019, the surveys 
included an additional column that allowed for easy comparison between 
the actual current year's percentage changes and the changes that had 
been projected in the previous year's survey. This enabled the survey 
participants to monitor whether their competitors adhered to the 
previous year's forecasts.
    106. The Processor Conspirators discussed other compensation 
information during their face-to-face meetings. A 2015 email from 
Processor Co-Conspirator 18 to fellow WMS Steering Committee members 
and Processor Co-Conspirators 6, 7, and 14, stated, ``As you know the 
survey results do not provide hourly production projected budgets''--
i.e., future compensation information for hourly production line 
workers--``and this is typically a discussion during the roundtable 
sessions.'' Even more explicit is an internal Processor Co-Conspirator 
18 email from 2005, in which one executive explained to another, ``The 
survey results will be shared at the meeting and we can get the 10th 
percentile and the other company's avg minimum of the range. I believe 
there are other poultry companies paying below our lowest salary. 
Although it won't be published in the

[[Page 34039]]

survey results [the Processor Co-Conspirator 18 meeting participant] 
can also informally ask what minimum starting rates are.'' Again, this 
email exchange demonstrates that the opportunity to collaborate with 
their competitors in person was a key feature of the WMS Survey Group.
    107. Meng's presentations at the WMS in-person meetings also 
featured current compensation information. For example, he explained in 
his sworn declaration, ``Specifically, those PowerPoint presentations 
focused on how the compensation data reported in the current year for 
both salaried and hourly-paid workers compared to the prior year or two 
years.''
    108. Further, Meng stated that at the in-person WMS meetings, ``the 
private roundtable sessions that excluded me involved discussions 
between members of the [Processor Conspirators] regarding their 
compensation practices. Those discussions addressed, among other 
issues, the results of the [WMS surveys], the compensation data that 
particular individual processors had reported to the Survey, and plans 
for future compensation rates for salaried and hourly-paid workers.''
    109. The Group's 2009 ``Operating Standards'' provided that each 
participating poultry processor must ``[a]gree and ensure that shared 
survey data or other information from discussions will be used and 
treated in a `confidential' manner and definitely should not be shared 
with companies not participating in the survey. Failure to meet these 
requirements will result in immediate removal from the survey group.'' 
This condition for joining the WMS Survey Group shows that the 
participants considered the information exchanged to be nonpublic and 
restricted to survey participants.
    110. Meng willingly participated in the processors' violation of 
antitrust law. To help create a false veneer of compliance with the 
antitrust laws, Meng would occasionally make statements that WMS's 
product ``complied with legal requirements.'' In August 2012, when the 
Steering Committee decided to make a change to the survey to distribute 
disaggregated and identifiable data regarding hourly workers, Meng 
raised a concern that this would not comply with antitrust agency 
guidance on information exchanges. Rather than forego exchanging this 
information, the Processor Conspirators on the Steering Committee asked 
that Meng not mention his concern to the other processors: ``what about 
just letting them respond as to any concerns as opposed to calling it 
out?''
c. WMS Survey Group Exchanges by Year, Defendant, and Type of 
Information Exchanged in Surveys and In-Person Meetings
    111. The following chart lists the Processor Defendants that 
participated in the WMS Survey Group by year.

      Processor Defendants' WMS Survey Group Participation by Year
------------------------------------------------------------------------
              2000-2005                  Cargill, Sanderson, and Wayne
------------------------------------------------------------------------
2006-2011............................  Cargill, George's, Sanderson, and
                                        Wayne
2012-2018............................  Cargill, George's, and Wayne
2019.................................  Cargill and Wayne
------------------------------------------------------------------------

    112. In the remainder of this section, allegations about events or 
conduct in each year of the WMS Survey Group apply to all of the 
Processor Defendants participating in the WMS Survey Group for that 
year, except where otherwise noted.
    113. From at least 2000 through 2019, the members of the WMS Survey 
Group submitted their confidential compensation data to the WMS-run 
survey and received survey results containing their competitors' 
confidential compensation data. The types of data gathered and shared 
changed during the WMS Survey Group's over-20-year existence. In the 
following years, the WMS survey solicited, and the WMS survey results 
included:
    a. 2000: Confidential information about wages, salaries, benefits, 
and bonuses related to ``dozens of positions at poultry complexes,'' 
including plants, hatcheries, and feed mills;
    b. 2001-2004: Current and future, disaggregated, and identifiable 
salary and benefits information, as well as current, disaggregated, and 
identifiable hourly wage information, including ``what each member of 
the [WMS Survey Group] paid, on average, in hourly wages to poultry 
processing workers at each of their processing plants.'' The 
information was identifiable because the WMS survey included what was 
``in effect, a key for identifying the identity of each poultry 
processor'';
    c. 2005-2012: Future salary information, including the dates and 
ranges of planned raises in salary by position, confidential 
information about hourly wages, and current and disaggregated benefits 
information;
    d. 2013-2016: Future salary information, including the dates and 
ranges of planned raises in salary by position; current, disaggregated, 
and identifiable hourly wage information, which enabled participants to 
determine specific competitors' current hourly compensation by plant; 
and current and disaggregated benefits information;
    e. 2017: Future salary information, including the dates and ranges 
of planned raises in salary by position, confidential information about 
hourly wages, and current and disaggregated benefits information; and
    f. 2018-2019: Confidential compensation information.
    114. As discussed above, from 2001 through 2019, the members of the 
WMS Survey Group met in person annually to discuss poultry processing 
plant compensation. All participants were instructed by the Steering 
Committee to bring their individual compensation data with them to 
these meetings. From 2001 through 2017, the members of the WMS Survey 
Group held roundtable discussions about compensation practices from 
which they excluded any third parties, including Meng. In 2018 and 
2019, Meng attended all sessions of the in-person meeting.
    115. At these in-person WMS Survey Group meetings, the members of 
the WMS Survey Group collaborated on, assisted each other with, and 
exchanged current and future, disaggregated, and identifiable 
information about compensation for poultry processing workers, as 
described below:
    a. 2007: An ``agenda and group discussion topics'' list for the 
2007 WMS Survey Group meeting states ``Are Smoking Cessation Programs 
included in your Health benefits? If not, do you have plans to 
implement? If currently included, please share your schedule of 
benefits.''
    b. 2008: Later correspondence between WMS Survey Group Members 
states that at the 2008 WMS Survey Group meeting, ``we discussed 
companies that are now charging higher insurance premiums for 
smokers.''
    c. 2011: In 2012, Meng emailed the WMS Survey Group members about 
notes they had taken at the prior year's in-person meeting, warning 
them that the notes disclosed details that put the processors at risk 
of having violated the antitrust laws. Meng wrote to the processors, 
``you reference certain positions not included in the survey where `we 
will all agree to contact each other for general position.' That 
comment and action goes against the Safe Harbor Guidelines.'' Thus, it 
appears that during the 2011 meeting, the Defendants present directly 
shared information that violated the antitrust laws.
    d. 2015: At the 2015 WMS Survey Group meeting, the participants 
discussed ``whether to distribute disaggregated, raw, plant-level data 
concerning hourly-paid workers''

[[Page 34040]]

through the WMS survey and that ``all members of the [WMS Survey Group] 
in attendance at the Meeting agreed to the continued distribution of 
such data.'' Notes taken at the 2015 WMS Survey Group roundtable 
meeting by Processor Co-Conspirator 18 record what each participant 
shared with the group in columns next to each processor's name. These 
notes suggest the processors openly and directly shared with each other 
a wide range of detailed, non-anonymous, and current- or future 
compensation information, with a special focus on their rates of 
overtime pay (i.e., pay for the 6th and 7th days of the week): \6\
---------------------------------------------------------------------------

    \6\ As described above, all spelling and grammatical errors in 
documents quoted in this Amended Complaint are sic.
---------------------------------------------------------------------------

    i. Processor Co-Conspirator 3's column notes, ``6th and 7th day pay 
$150 flat rate''; ``Compress scales over 1 yr rate to start rate. 
Startign in Feb 2015'';
    ii. Processor Co-Conspirator 6's column notes, ``Added seniority 
pay instead of doing an hourly increase. . . . Rolls w/vacation, up to 
6% increase. It is a seniority premium'';
    iii. Defendant George's column notes, ``Staffing plants is a big 
issue down 290 positions at springdale locations. $500 signing bonus 
$300 first 30 days $200 30 days'';
    iv. Processor Co-Conspirator 14's column notes, ``NO 6th and 7th 
incentive'';
    v. Processor Co-Conspirator 15's column notes, ``HOurly bonus 
program 17K employees'';
    vi. Processor Co-Conspirator 17's column notes, ``6th and 7th day 
pay for weekly paid freguency $150 or comp day'';
    vii. Defendant Wayne's column notes, ``$200 6th/$300 7th; some 
facilities if you work in 6 hours you get the full day based base 
pay'';
    viii. Processor Co-Conspirator 2's column notes, ``$1.00 
Attendnance bonus up from $0.25 . . . . Shoulder can earn up to $150 
week . . . Benefits--Taking a harder look at their package''
    ix. Processor Co-Conspirator 9's column--in its sole year of 
participation in the WMS Survey Group--notes, ``6th/7th day up to 6 
hours, get \1/2\ for 4 hours half day'';
    x. The column for Processor Co-Conspirator 18b (now owned by 
Processor Co-Conspirator 18) notes, ``200 6th 275 7th day.''
    xi. Processor Co-Conspirator 10's column notes, ``$1.00 Attendance 
bonus up from $0.25/Negotiated contract $55. 30. .30 3 Yr./. . . . 
Supervisor offering 5000-8000'';
    xii. The column for Former Processor Co-Conspirator 3, now owned by 
Processor Co-Conspirator 16, notes, ``Line Team Members want more 
money; based on survey we are in the middle'' and ``No Weekend Pay. But 
will be looking''; and
    xiii. Processor Co-Conspirator 13's column notes, ``Currently does 
not have Weekend Pay for Supervisors.''
    e. 2017: The 2017 WMS Survey Group meeting marked a turning point 
for the WMS Survey Group. That year, after the filing of a private 
antitrust class-action suit in the Northern District of Illinois 
alleging price-fixing by many participants in the downstream sale of 
chicken products, the processors and Meng became more concerned about 
antitrust risk. At least one executive from Processor Co-Conspirator 
7--a Steering Committee member--traveled all the way to the 2017 
meeting only to learn that his employer's legal counsel had directed 
him not to attend the sessions. At the 2017 meeting, the Defendants and 
Processor Conspirators in attendance ``all agreed,'' in the words of 
WMS's Jonathan Meng, ``that moving forward all questions about future 
increases would be removed from the survey.''
2. Direct Processor-to-Processor Collaboration and Information 
Exchanges
    116. In addition to collaborating on setting compensation for plant 
workers through the WMS Survey Group, including through in-person 
meetings that involved direct exchanges of identifiable compensation 
information, the Processor Conspirators collaborated on and directly 
exchanged current and future, disaggregated, and identifiable 
information about plant workers' wages and benefits. These interactions 
occurred ad hoc and involved information about both local and 
nationwide compensation decisions.
    117. That the conspirators repeatedly contacted each other to seek 
non-public competitive information shows the mutual understanding among 
these Processor Conspirators that they would collaborate with and 
assist each other on compensation decisions.
    118. The relationships poultry processors established with their 
labor market competitors through groups like the WMS Survey Group 
created the opportunity to engage in ad hoc direct exchanges of 
compensation information. By exchanging large amounts of current and 
future, disaggregated, and identifiable data, the processors 
collaborated to accumulate a set of industry compensation information 
they could use to set their workers' wages and benefits at a nationwide 
level (for example, to set budgets on plant worker spending across the 
country) or locally (for example, to determine pay for shoulder cutters 
in a specific plant).
a. Chicken Industry Wage Index (``CHIWI'') Exchange
    119. The collaboration and direct exchanges among processors 
included a survey that was designed and run by Processor Co-Conspirator 
18, the Chicken Industry Wage Index or ``CHIWI.'' Through this survey, 
Defendants George's and Wayne, along with Co-Conspirators 6, 7, 14, 15, 
17 and others, exchanged current and future, disaggregated, and 
identifiable compensation data from 2010 to 2013. The survey results 
were so disaggregated that they showed wages for each participant's 
specific processing plants. Processor Co-Conspirator 18 disclosed wages 
by region of the country, as defined by Consultant Co-Conspirator 1, 
making it easy for the processors to compare the CHIWI results with the 
current, disaggregated, and identifiable Consultant Co-Conspirator 1 
compensation information discussed below.
    120. A Processor Co-Conspirator 18 employee described CHIWI to 
others inside the company in 2013, noting that it was a ``survey with 
competing poultry companies. With this information, we feel that we are 
in a better position to strategically evaluate wages on a location by 
location level.''
    121. In 2013, Processor Co-Conspirator 18 transferred the running 
of CHIWI, which it continued funding, to Defendant WMS. In a February 
2013 letter from WMS to Processor Co-Conspirator 18 describing its 
planned administration of CHIWI, Meng noted ``WMS will develop the 
survey document for your approval based upon the templates provided 
earlier by [Processor Co-Conspirator 18].''
    122. WMS administered the ``Hourly Survey'' (the renamed CHIWI) to 
the WMS Survey Group participants from 2013 to 2015, with all 
participants in the WMS Survey Group for those years submitting and 
receiving CHIWI-format compensation data. In 2016, WMS distributed a 
substantially similar survey of plant-level data for hourly workers 
along with its 2016 annual survey to Defendants Cargill, George's, and 
Wayne and Processor Co-Conspirators 1, 2, 3, 4, 5, 6, 7, 10, 13, 14, 
15, 17, and 18.
    123. During Defendant WMS's administration of the Hourly Survey, 
WMS assisted Processor Co-Conspirator 18 in identifying some of the 
Processor

[[Page 34041]]

Conspirators' exchanged compensation information presented in WMS 
surveys. In October 2014, a Processor Co-Conspirator 18 employee 
emailed WMS's Jonathan Meng, asking ``We need to know the number of 
[Processor Co-Conspirator 15] locations that participated in our last 
Hrly Prod Maint survey. Can you provide this as soon as you get a 
chance?'' Another WMS employee responded to this email that same day, 
writing ``29 locations were reported by [Processor Co-Conspirator 
15].'' Telling Processor Co-Conspirator 18 the number of locations of 
another processor's plants reported in a survey would assist Processor 
Co-Conspirator 18 in identifying the disaggregated survey results, 
which were broken out by plant. If Processor Co-Conspirator 18 knew how 
many plants a given processor had reported, Processor Co-Conspirator 18 
could match the number of plants reported for a specific (anonymized) 
competing processor to crack the code and identify the processor.
    124. Processor Co-Conspirator 18 and Defendants WMS and Meng were 
cognizant of, and worried about, the antitrust risk posed by CHIWI. 
After WMS took over the administration of CHIWI, a Processor Co-
Conspirator 18 employee requested that Meng remove the note ``Sponsored 
by: [Processor Co-Conspirator 18]'' in the circulated report and 
replace it with the title ``WMS Poultry Hourly Wage Survey.'' Meng did 
not comply with this request, stating that ``I did not want the Poultry 
Industry Survey Group to conclude that WMS approved of the format of 
the [Processor Co-Conspirator 18] sponsored survey.'' On another 
occasion, Meng explained to Processor Co-Conspirator 18 executives that 
CHIWI included clear risk factors for a potentially anticompetitive 
exchange of information, noting that participating poultry processing 
firms were likely to be able to identify which processor operated which 
plant based on the details about the plants disclosed in the survey. 
Despite his warning, the Processor Co-Conspirator 18 executives 
requested that WMS proceed, and WMS willingly complied.
b. U.S. Poultry & Egg Association Member Processors' Exchanges
    125. Some Processor Conspirators used their involvement with the 
U.S. Poultry & Egg Association, a nonprofit trade association for the 
poultry industry, to collaborate with other poultry processors on 
compensation decisions.
    126. In November 2016, Processor Co-Conspirator 12's Director of 
Human Resources emailed, among others, Defendants George's, Sanderson, 
and Wayne and co-conspirators including Processor Co-Conspirators 1, 3, 
5, 6, 10, 11, 14, and 18, noting ``I understand Paul is out of the 
country''--likely a reference to the Director of the Association's HR 
and Safety Program-- ``so I hope you do not mind me reaching out to you 
directly. With the news on the new OT rule injunction, I am curious on 
how you plan to proceed? Wait and see or stay the course for any 12/1/
16 plans you have already made?'' This question was a reference to a 
court order staying a federal rule mandating a change to overtime pay. 
Defendant Sanderson's Human Resource Manager replied, copying all 
recipients, ``We are in the process of implementing the new wages and I 
don't see that we will stop or change it,'' thus sharing Sanderson's 
future wage plans with its competitors directly.
    127. In June 2017, the Director of the Association's HR and Safety 
Program emailed to Defendants Cargill, George's, Sanderson, and Wayne; 
Processor Co-Conspirators 3, 6, 7, 9, 10, 12, 14, 15, 17, and 18; 
Consultant Co-Conspirator 1; as well as others, the results of a survey 
``on pay ranges of Live Hang employees versus General Production 
employees,'' noting that ``sixteen sites'' participated. The survey 
questions sought the ``average per hour rate that you pay,'' meaning 
the current pay rate, of both Live Hang employees and General 
Production employees.
    128. The U.S. Poultry & Egg Association also conducted in-person 
meetings between the processor competitors, similar to the WMS Survey 
Group. In fact, enough participants attended both in-person meetings 
that in September 2012, Processor Co-Conspirator 18 and Processor Co-
Conspirator 7 discussed scheduling the WMS Survey Group meeting at the 
same location and around the same dates as the U.S. Poultry & Egg 
Association in-person meeting due to ``the people that attend both.'' 
In December 2016, Defendant Sanderson attended the U.S. Poultry & Egg 
Association meeting, four years after Sanderson's departure from the 
WMS Survey Group.
c. Processor Conspirators' Ad Hoc Direct Exchanges
    129. The Processor Defendants also collaborated to exchange and 
discuss confidential compensation information directly in an ad hoc 
fashion. These direct exchanges were often between two or three 
competitors. Some processor-to-processor communications were between 
senior employees in processors' corporate offices and concerned 
nationwide compensation. Others were between processor employees at the 
local plant level, such as exchanges between competing plant managers 
that were then reported to processor executives at the national level.
    130. In January 2009, an employee of Processor Co-Conspirator 14 
emailed Defendants Cargill, George's, Sanderson, and Wayne and 
Processor Co-Conspirators 6, 7, 15, and 18, asking, ``I am curious to 
find out if anyone has (or is in discussions) about postponing plant or 
merit increases.'' In addition, in the same email, she noted, ``I know 
there has been some previous dialogue about plant and merit 
increases.''
    131. In September 2013, an employee of Defendant Cargill sent 
Processor Co-Conspirator 18 her company's internal medical leave 
policy, which included a detailed description of benefits.
    132. In January 2015, an employee of Defendant George's emailed his 
supervisors to tell them he had spoken with the HR Manager of a 
particular Processor Co-Conspirator 18 plant, who told him that ``[t]he 
$13.90 starting pay is for Breast Debone at their Green Forrest 
facility. The $13.90 is available once they qualify and then they are 
eligible for incentive pay on top of that. So in fact an experienced 
Shoulder Cutter could go there and get a $13.90 starting pay rate. He 
said that the normal starting rate was $10.50 per hour with $0.40 extra 
of 2nd shift and $0.45 extra for 3rd shift.'' This George's employee 
then mentioned he would contact HR managers at another Processor Co-
Conspirator 18 plant, as well as a plant owned by Processor Co-
Conspirator 17.
3. Exchange of Compensation Information Through Consultant Co-
Conspirator 1
    133. From at least 2010 to the present, the Processor Defendants 
also used another data consultant, Consultant Co-Conspirator 1, to 
collaborate with each other on compensation decisions through the 
exchange of current, disaggregated, and identifiable information about 
their poultry processing plant workers' wages and benefits, 
artificially and anticompetitively suppressing this compensation.
    134. Consultant Co-Conspirator 1 gathers data from companies and 
distributes it to paying customers. Consultant Co-Conspirator 1 does 
not sell this data to the public; its reports are only available to its 
subscribers.
    135. Publicly available information dating from both 2011 and 2020 
shows Consultant Co-Conspirator 1 gathered data from over 95 percent of 
U.S.

[[Page 34042]]

poultry processors, including all of the Processor Conspirators. 
Consultant Co-Conspirator 1 also admitted in Jien (19-cv-2521) that its 
subscribers have included all of the Processor Conspirators. Thus, it 
is likely that all Processor Defendants exchanged compensation 
information through Consultant Co-Conspirator 1 from at least 2010 to 
present.
    136. The data Consultant Co-Conspirator 1 gathers and sells is 
current, disaggregated, and identifiable. Consultant Co-Conspirator 1 
claims that it can minimize those risks to make this data ``safer'' to 
distribute by anonymizing the companies and processing plants for which 
it reports specific wages and salaries per job role. Although the 
plants reported in Consultant Co-Conspirator 1's data reports are not 
identified by name, they are grouped by region, and the list of all 
participants in the region is provided. Accordingly, the number of 
employees and other data provided per plant makes this data 
identifiable to other processors.
    137. Processors are thus likely able to use Consultant Co-
Conspirator 1's data reports to identify the wage and salary rates, as 
well as benefits, that each of their competitors is currently setting 
for each of its plants.
    138. In addition to permitting competing poultry processors to 
collaborate on their wages and benefits at the individual plant level, 
Consultant Co-Conspirator 1's data reports also provide a means for 
processors to monitor whether their collaborators are following through 
on the compensation decisions they reported through the WMS Survey 
Group and the ad hoc compensation exchanges.
4. Processors' Collaboration and Assistance on Compensation
    139. In a patchwork of different combinations, through different 
methods, and with respect to different types of compensation 
information, the Processor Defendants built a pervasive conspiracy 
across the poultry processing industry to collaborate on, and not 
merely exchange, poultry processing plant worker wages and benefits 
information.
    140. As described above, many of the Processor Conspirators, 
including Defendants Cargill, Sanderson, and Wayne, as well as 
Processor Co-Conspirators 6, 7, 14, 15, 17, and 18, began exchanging 
compensation information directly, without involvement from WMS, as 
long ago as the 1980s. One employee of Processor Co-Conspirator 6 told 
WMS's Jonathan Meng that ``executives from each of those poultry 
processors would meet in a private room and bring enough copies of 
their salary and wage data to distribute to all the other attendees,'' 
and ``the attendees would then exchange and discuss their compensation 
schedules.'' According to one participant, these pre-2000 exchanges 
included an understanding between participants that they would not use 
the information they exchanged about each other's salaried compensation 
to attempt to hire away each other's salaried employees. This early 
conspiracy to collaborate helped foster the mutual understanding in 
which processors agreed to collaborate on, rather than compete over, 
poultry processing plant worker compensation.
    141. In December 2008, for example, an executive at Processor Co-
Conspirator 4 emailed Defendants Cargill, George's, Sanderson, and 
Wayne and Processor Co-Conspirators 6, 7, 8, and 14, seeking details of 
each competitor's dental plan benefits, which her company was 
``currently reviewing.'' The Processor Co-Conspirator 4 executive made 
clear that her company would use the information provided by its 
competitors to shape its own compensation decisions, explaining that 
``[y]our responses to the questions below would greatly help us ensure 
we stay competitive within the industry.'' The questions she included 
related to eligibility for coverage, services included in the plan, 
``annual deductible,'' and ``annual max per person.''
    142. In September 2009, an executive at Defendant Wayne emailed 
Defendants Cargill, George's, and Sanderson and Processor Co-
Conspirators 6, 7, 14, 15, and 18 informing them that ``[i]t's that 
time of year already'' because Wayne was ``working on 2010 budget 
increase recommendations.'' The executive then asked Wayne's 
competitors to send future, disaggregated, directly-exchanged (and thus 
identifiable) compensation information: ``What is your companies 
projected salary budget increase recommendation for 2010?'' Later in 
this email chain to the same group, the Wayne executive noted that her 
colleague's ``sanity is depending on your response. Seriously--any info 
you can give us will be helpful, we appreciate your help.'' Defendant 
George's and Processor Co-Conspirator 14 both responded to this email 
chain with their competitors and directly disclosed a projected 
(future) recommendation to increase their budgets for salaries by three 
percent.
    143. In July 2015, an executive for Processor Co-Conspirator 14 
emailed her peers at Defendant Sanderson and Processor Co-Conspirator 
18, explaining that Processor Co-Conspirator 14 was ``in the midst of 
completely revamping our Plant Management Trainee program.'' Her email 
continued, ``and I was wondering if you would be willing to share with 
me . . . what your starting rate is for these kids hired right out of 
college?'' The Processor Co-Conspirator 14 employee sought current, 
disaggregated, and identifiable wage information from her competitors 
for the explicit purpose of assisting Processor Co-Conspirator 14 to 
make its own wage decisions for this cohort. Her peer at Sanderson 
responded the very next day to both Processor Co-Conspirator 14 and 
Processor Co-Conspirator 18, disclosing, among other information, that 
Sanderson's Beginning Trainee Program paid ``from 36,000 to 38,000, no 
signing bonuses'' and that Sanderson's Advance Trainee program paid 
``from $48,000 to $87,000, no signing bonuses.''
    144. In February 2016, the Director of Compensation at Processor 
Co-Conspirator 4 emailed Defendants Cargill, George's, and Wayne, as 
well as Processor Co-Conspirators 3, 6, 7, 14, 15, 17, and 18. She 
thanked a Wayne employee and noted, ``that reminded me that I had a 
question for the group also. We are trying to determine what is 
reasonable for salaried employee to be compensated for working 6 and/or 
7 days in a work week when the plant is running.'' The questions she 
asked included ``Do you pay extra for these extra days worked for 
salaried (exempt) employees?'' and ``If so, how is that calculated?'' 
The statement that Processor Co-Conspirator 4 was in the midst of 
``trying to determine'' overtime pay decisions, and wanted to know what 
its competitors did in the same circumstances, likely made clear to the 
recipients that Processor Co-Conspirator 4 planned to use the 
information it gathered in its own decision-making. An employee from 
Processor Co-Conspirator 10 responded to all recipients, noting, ``We 
pay \1/5\ of the weekly salary for the sixth and seventh days if 
working due to production. This includes supervisors and managers below 
the plant manager level and all are paid the same. If the day off is 
compensated by a paid benefit, other than sick time, we pay the sixth 
and seventh days. Sanitation and maintenance only get paid for the 
seventh day worked.''
    145. In September 2016, an executive from Processor Co-Conspirator 
7 sought future compensation information from Defendants Cargill, 
George's, and Wayne and Processor Co-Conspirators 3, 6, 14, 15, 17, and 
18 related to a new Fair Labor Standards Act salary threshold for

[[Page 34043]]

exempt status, a federal requirement determining to which workers the 
processors would have to pay overtime wages based on salary. The 
Processor Co-Conspirator 7 executive asked his competitors to fill out 
a directly-exchanged survey form to indicate how they would change 
compensation plans for all employees and, more specifically, for first-
line supervisor roles. Within a week, Defendants Cargill and George's 
and Processor Co-Conspirators 6, 15, and 17 responded by sharing their 
future compensation plans, which the Processor Co-Conspirator 7 
executive passed on (labeled by processor) to the entire group, 
reflecting, ``If more respond, I'll republish, but the target grouping 
pattern already appears pretty tight.''
    146. The chart attached to the executive's email showed that eight 
of the ten processors selected ``most employees are receiving base 
salary increases to bring them to the threshold salary,'' thus ending 
the processors' obligation to provide these workers with overtime pay, 
and ``a smaller number will not receive a base increase but will 
receive overtime.'' Similarly, eight of the ten respondents selected, 
as to the first-line supervisors, ``are either above the salary 
threshold or will receive a base salary increase to the threshold.''
    147. The Processor Defendants' collaboration also involved forms of 
compensation other than wages. In January 2010, an executive for 
Processor Co-Conspirator 18 wrote to Defendants Cargill, George's, 
Sanderson, Wayne, and WMS and Processor Co-Conspirators 6, 7, 15, and 
17 for help because Processor Co-Conspirator 18 was ``considering a 
change to convert'' some of its plant worker jobs to a category that 
would provide them with fewer benefits: ``Production workers on the 
line do not get quite the same as our technical support jobs, nurses 
and clerical. The difference is 5 days daily sick pay, better vacation 
schedule, higher short-term disability pay and the ability to use our 
flexible (pre-tax) benefits saving plan.'' Processor Co-Conspirator 18 
noted that a ``prompt response would be much appreciated'' from its 
competitors about whether ``any of you have a difference in benefits 
between'' these two job categories, to assist it in making this 
decision. Processor Co-Conspirator 7 responded to Processor Co-
Conspirator 18's question, stating it did not.
    148. A 2015 email exchange between Defendant George's and Processor 
Co-Conspirator 18 provides detail on how the competitors may have 
viewed their relationships with each other as collaborators. On October 
6, 2015, Processor Co-Conspirator 18 received an email from a George's 
executive asking, ``Would you mind sending me your current Health 
Insurance Rates? Also do you plan on raising them in 2016? Thanks you 
so much for your help.'' Processor Co-Conspirator 18 then discussed 
this request internally, noting, ``We don't count on them [George's] 
for much so we don't owe them anything from our side.'' This view of 
the request for future and directly exchanged compensation information 
as part of a quid pro quo calculation--that to get the helpful 
information, you have to give the helpful information--helps explain 
why the competing processors were so willing to share compensation 
information when their competitors asked for it.
    149. In designing the WMS survey, the WMS Survey Group participants 
collaborated to ensure the exchanged data included the type of 
disaggregated compensation information that antitrust agencies warned 
against as a risk factor for identifying information exchanges not 
designed in accordance with the antitrust laws. For example, in 2012, 
the Steering Committee, which then included Processor Co-Conspirators 
6, 7, 14, 15, and 18, decided to distribute disaggregated and 
identifiable data regarding hourly plant workers. WMS's Jonathan Meng 
warned the Steering Committee that distributing this data would violate 
the guidance and proposed ways of presenting the data that would make 
it less identifiable. Processor Co-Conspirator 18, however, instructed 
Meng to let the WMS survey group know of the change to the survey 
design but not to ``call out'' Meng's concerns. Meng followed Processor 
Co-Conspirator 18's instructions and simply advised the Survey Group of 
the changes, stating that ``The Steering Committee has requested that 
the hourly wage information included in the report be expanded to 
include the raw data for each state. . . . The steering committee needs 
to know if you are in agreement with the proposed changes.'' Meng noted 
that under this plan, which he asked each WMS Group Participant to 
agree to explicitly, he would include disaggregated, identifiable wage 
data from Alabama, Arkansas, Georgia, Missouri, Mississippi, North 
Carolina, Tennessee, and Virginia. Later, Meng stated that ``everyone 
is in agreement with the change except [Processor Co-Conspirator 4] and 
[Processor Co-Conspirator 13], who have not responded yet.''
    150. The WMS Survey Group participants, competitors in the market 
for poultry processing plant labor, also collaborated to standardize 
the job categories for which they each reported compensation data, 
ensuring they could match each other's compensation decisions. The 
Processor Defendants also may have worked, with assistance from 
Defendant WMS, to standardize job types and categories across their 
different enterprises. This made a comparison between each 
participant's jobs easier, and thus made the information swapped about 
each job category's compensation more accessible for use. With respect 
to salaried positions, the annual survey questionnaire was intended to 
permit participants to match all jobs to defined job categories while 
indicating when the matched job was, in the view of the participant, 
``larger'' or ``smaller'' than the job as described in the 
questionnaire. Survey results reported the percentages of respondents 
indicating inexact job matches. In 2012, an employee for Processor Co-
Conspirator 14 employee described in an email to a Processor Co-
Conspirator 18 employee the prior year's WMS Survey Group in-person 
meeting, at which ``the discussion around the room was that some 
companies call this single incumbent job a Plant Safety Manager and 
some a Complex Safety Manager.'' This standardization for purposes of 
collaboration, enabled by WMS, made it easier for the Processor 
Defendants to determine and monitor consensus among themselves for 
compensation, enabling their conspiracy, which suppressed compensation.
5. Processors Recognize Their Agreement Likely Violated the Antitrust 
Laws and Attempt To Cover It Up
    151. The Defendants at times expressed concern that their agreement 
was unlawful. Sometimes, fear of discovery or other outside events 
prompted them to change their views of the risk they were each engaged 
in. Nonetheless, they maintained secrecy throughout the conspiracy.
    152. On February 14, 2012, Defendant Sanderson's HR Manager emailed 
Defendants Cargill, George's, and Wayne and Processor Co-Conspirators 
7, 15, and 17 along with Defendant WMS, notifying them that Sanderson 
would be ending its relationship with the WMS Survey Group. The HR 
Manager stated, ``On the advice of legal counsel, our Executives have 
decided that we can no longer participate in this type of survey.'' If 
the Defendants had not been previously aware of the legal risk involved 
in the WMS Survey Group exchange, this email put them on notice.
    153. Private class actions related to this conduct and other 
allegedly anticompetitive behavior in the poultry

[[Page 34044]]

industry caused the members of the WMS Survey Group to change some of 
their behavior. As noted above, at their 2017 in-person meeting, the 
participating Processor Conspirators, in the words of WMS's Jonathan 
Meng, ``all agreed that moving forward all questions about future 
increases would be removed from the survey. . . . It was also 
recommended by counsel for [Processor Co-Conspirator 7] to have an 
Antitrust Attorney present for the general group discussions (post 
survey results).''
    154. As Processor Co-Conspirator 7 described in October 2017, the 
Processor Conspirators would thereafter treat Meng as an ``Antitrust 
Guidon.'' In military terminology, a guidon is a flag flown at the head 
of a unit to signify that the commander is present. An executive at 
Defendant George's put it more bluntly, commenting that ``One thing 
that has changed is that the group will now have an attorney present 
for the full meeting to make sure no collusion and that the Safe Harbor 
provisions are all met and followed.'' Meng acknowledged in January 
2018 to an executive for Processor Co-Conspirator 17 that ``I will be 
present at all sessions this year (which did satisfy [Processor Co-
Conspirator 7's] counsel).''
    155. But Meng's presence at meetings did not ultimately quell the 
Processor Conspirators' fears that their conduct was unlawful. From 
2017 to 2020, spooked processors began dropping out of the WMS Survey 
Group due to, as an employee of Processor Co-Conspirator 14 put it, 
``the `big scare' ''--i.e., a private class action alleging a broiler 
chickens price-fixing conspiracy.
    156. In response to the elimination of disaggregated data from the 
survey, an executive for Processor Co-Conspirator 7 complained, ``how 
useful is the `average rate report' now anyway? It has suffered 
significant obscuring of results due to aggregating, and I would ask--
Is it still useful information any longer?''
    157. Processor Co-Conspirator 13 left in 2018; that year, Defendant 
Wayne also considered leaving, but decided to remain in the group after 
heavy lobbying by Meng. Defendant George's and Processor Co-
Conspirators 1 and 17 left in 2019.
    158. In a 2019 email, an executive for Processor Co-Conspirator 7 
noted that Defendant ``Georges was skittish very early on in the anti-
trust concerns, including their attorneys contacting other companies to 
warn about attending our conference.''
    159. In July 2019, an executive from Processor Co-Conspirator 7 
sent an alert to Processor Co-Conspirator 14 and WMS describing a call 
his colleague received ``from someone representing themselves as a 
private investigator from New York. The caller had questions about the 
types of information we shared at our meeting, the survey and other 
questions that I will simply call `general anti-trust fishing' 
questions. . . . So just a little reminder that the bad-guys are still 
out there, and why we hold strict confidences about discussing wages--
and have Jon [Meng] at our entire meeting.'' Notably, the Processor Co-
Conspirator 7 executive did not say the competing processors should 
take care not to discuss wages, but rather take care to keep such 
discussions in ``strict confidence.''
    160. And if there were any question whom the WMS participants 
considered the ``bad-guys,'' Defendant WMS's presentation for the 2019 
WMS Survey Group meeting features, at the top of the presentation's 
first slide, a quote from Shakespeare: ``The first thing we do, let's 
kill all the lawyers.''
    161. The WMS Survey Group did not meet again after this 2019 
meeting.

C. Defendants Sanderson's and Wayne's Deceptive Practices Toward 
Growers

    162. Growers sign contracts with Sanderson and Wayne, respectively, 
to raise chickens. Growers often make substantial financial investments 
including building or upgrading their facilities. The success of those 
investments depends on the compensation system they receive.
    163. Under the compensation system known as the tournament system, 
each contract provides an average or base price that the grower 
receives. But the average or base price is not necessarily what the 
grower actually receives. The growers' compensation depends on how each 
grower performs relative to other growers--in particular, on their 
performance relative to other growers at converting the inputs to bird 
weight. Growers who overperform the average are paid a bonus, while 
those that underperform the average are penalized. Sanderson and Wayne, 
however, control the major inputs the grower receives, including the 
chicks and feed. As a result, growers cannot reasonably assess the 
range of expected financial outcomes, effectively manage their risks, 
and properly compare contracts from competing processors.
    164. Sanderson and Wayne do not adequately disclose the risk 
inherent in this system to the growers. Their contracts with growers 
omit or inadequately describe material key terms and risks that 
mislead, camouflage, conceal, or otherwise inhibit growers' ability to 
assess the financial risks and expected return on investment. For 
example, the grower contracts disclose neither the minimum number of 
placements nor the minimum stocking density that the grower is 
guaranteed. The contracts also lack material financial disclosures 
regarding poultry grower performance, including the range of that 
performance, and other terms relevant to the financial impact of the 
grower's investment.
    165. Similarly, the contracts omit material information relating to 
the variability of inputs that can influence grower performance, 
including breed, sex, breeder flock age, and health impairments, on an 
ongoing basis, including at input delivery and at settlement (including 
information to determine the fairness of the tournament). Without this 
information, growers are impaired in their ability to manage any 
differences in inputs, or evaluate whether to invest in new 
infrastructure, that may arise from the Sanderson's and Wayne's 
operation of the tournament system. This failure to disclose is 
deceptive and violates the Section 202(a) of the Packers and Stockyards 
Act, 1921, as amended and supplemented, 7 U.S.C. 192(a). These 
deceptions should be enjoined.

VI. Elements of the Sherman Act Claim

A. The Agreement To Collaborate on Compensation Decisions, Exchange 
Compensation Information, and Facilitate Such Collaboration and 
Exchanges

    166. As detailed above, the Processor Defendants collaborated on 
what should have been independent decisions about poultry processing 
plant worker compensation. As reflected by in-person meetings, 
correspondence, and the regular exchange of compensation information, 
the Processor Defendants and their co-conspirators had a mutual 
understanding that they would contact each other for advice, 
discussion, and competitively-sensitive compensation information to 
help each other make decisions about worker compensation at the 
nationwide and local level. This agreement undermined the competitive 
process, distorted the ordinary, free-market bargaining and 
compensation-setting mechanisms, and suppressed competition and 
compensation for poultry processing plant workers.
    167. The Processor Defendants' exchanges of current and future, 
disaggregated, and identifiable information about poultry processing 
plant worker wages and benefits, through the facilitation provided by 
the Consultant Defendants and through direct exchanges with each other, 
supported this conspiracy to

[[Page 34045]]

collaborate. However, even standing alone, these exchanges allowed each 
participant to more closely align its wage and benefit offerings with 
its competitors, harmed the competitive process, distorted the 
competitive mechanism, and suppressed competition and compensation for 
their poultry processing plant workers.

B. Primary Poultry Processing Plant Employment Is a Relevant Labor 
Market

    168. The market for primary poultry processing plant labor is a 
relevant antitrust labor market. If a single employer controlled all 
the primary poultry processing plant jobs in a geographic market, it 
could profitably suppress compensation (either in wages or benefits) by 
a small but significant and non-transitory amount. In other words, if a 
poultry processing employer with buyer market power (monopsony power) 
chose to reduce or forgo raising its workers' wages and benefits, or 
otherwise worsen the compensation offered to workers, too few poultry 
processing workers would switch to other jobs to make the employer's 
choice unprofitable.
    169. Labor markets are inextricably connected to the most personal 
choices workers make: how and where to live, work, and raise a family. 
In labor markets, employers compete to purchase labor from a pool of 
potential and actual workers by setting wages, benefits, and working 
conditions.
    170. In choosing among potential employers, workers who may be 
different from each other--for example, who fill different types of 
jobs--may be similarly positioned with respect to potential employers. 
While hourly and salaried poultry processing jobs may attract different 
job applicants, poultry processing plants may constitute potential 
employers for those workers because of commonalities shared among 
hourly and salaried workers (and among workers filling different roles 
within those categories).
    171. To poultry processing plant workers, all of the Processor 
Conspirators are close competitors for their labor. From the 
perspective of workers, poultry processing jobs are distinguishable 
from, and not reasonable substitutes for, jobs in other industries. 
Many processing plant workers share common constraints that make 
poultry processing plant jobs accessible to them while other year-
round, full-time jobs are not. Poultry processing plant workers also 
share common attributes and learn job-specific skills, which the 
poultry industry compensates more than other industries would. Thus, 
these particular employers compete to offer jobs to this pool of labor 
that these workers both have access to and that offer value for their 
common attributes in a way that other industries might not. Many of 
these workers are able to find work in the poultry industry but not in 
other industries that seek workers with different skills, experience, 
and attributes.
    172. Although poultry processing plants employ varied types of 
workers, they occupy a common labor market. All the workers were the 
target of a single overarching information-sharing conspiracy. All the 
workers have thus had their compensation information distributed 
without their consent by their employer to other employers who might 
hire them. All the workers have developed experience, familiarity, and 
expertise in poultry processing plants, and all or nearly all the 
workers have located their households near poultry processing plants, 
acquired friends or colleagues in poultry plants, and have or have 
developed the types of personal characteristics that enable them to 
tolerate the harsh conditions of poultry processing plants. As a 
result, workers who are unsatisfied with their current employer would 
normally seek, or at least consider, alternative employment in the 
poultry processing plants owned by their employer's co-conspirators.
    173. Each of the Processor Conspirators sees poultry processing 
workers as sufficiently alike to find it worthwhile to place them in a 
common worksite, creating a cluster of jobs associated with particular 
market activity (poultry processing), just as grocery stores sell 
multiple products to customers who prefer the convenience of one-stop 
shopping. The common characteristics of the employees as required by 
the logistics of processing poultry explain why Defendants treat the 
employees together in the conspiracy. For these reasons, it is 
appropriate to consider all the poultry processing workers as a common 
group of harmed parties for the purpose of this action, even though the 
jobs in poultry processing plants differ.
    174. Both chicken processing plants and turkey processing plants 
compete to purchase labor in this market because the jobs they seek to 
fill are similar. These industries use similar facilities, materials, 
tools, methods, job categories, and vertically-integrated processes to 
produce downstream products. These industries also exhibit similar 
difficult working conditions.
    175. In addition, the poultry industry itself recognizes that 
poultry processing workers are a distinct market. The Processor 
Defendants' and Processor Conspirators' agreement to collaborate on 
compensation decisions included the exchange of information about both 
hourly and salaried plant jobs. The WMS Survey Group set criteria for 
membership that permitted both chicken and turkey processors to 
participate, but not other meat processors or other employers. When one 
member of the WMS Survey Group proposed including processors of red 
meat, this idea was rejected by the group because, according to 
Defendant Jonathan Meng, as he was informed by members of the WMS 
Survey Group, ``the poultry processing labor market is distinct from 
the red meat processing labor market.'' Informed by their knowledge and 
experience, the Processor Conspirators chose to include poultry 
processors in the WMS Survey Group and exclude other industries.

C. The Geographic Markets for Poultry Processing Plant Labor

    176. The relevant geographic markets for poultry processing plant 
labor include both local submarkets and a nationwide market.
    177. Local markets for poultry processing plant labor are relevant 
geographic markets. Many poultry processors adjust wages and benefits 
at a local level and based on local factors, meaning that a particular 
processor's compensation for job categories between different plants in 
different locations may differ. The Processor Conspirators made 
decisions affecting competition and competed on a local basis. Poultry 
processing workers reside within commuting distance from their plants.
    178. The Processor Conspirators' anticompetitive agreement to 
collaborate on compensation decisions included the exchange of local 
data through the Consultant Defendants and Consultant Co-Conspirator 1 
and the direct exchange of such data with the other Defendants and co-
conspirators. For example, as Processor Co-Conspirator 18 noted in 
describing the CHIWI survey, ``With this information, we feel that we 
are in a better position to strategically evaluate wages on a location 
by location level.''
    179. Employed poultry processing plant workers reside within 
commuting distance from the plant at which they work. In addition, many 
applicants to these jobs reside within commuting distance from the 
plant to which they have applied, at the time they have applied. Thus, 
if multiple processing plants are located within a worker's commuting 
boundary, those plants are potential competitors for that worker's 
labor.

[[Page 34046]]

    180. The relevant local submarkets can be identified according to 
workers' willingness and ability to commute. The local submarkets here 
are those in which, according to data from the United States Department 
of Agriculture, at least two Processor Conspirators compete with each 
other for primary poultry processing plant workers. In these relevant 
local submarkets, it is likely that the Processor Conspirators together 
hold market power, because they control over 80 percent, and in many 
local submarkets, control 100 percent, of primary poultry processing 
plant jobs. A hypothetical monopsonist of poultry processing plant 
labor jobs in each local labor submarket would likely be able to 
suppress compensation for poultry processing plant workers by a small, 
but significant, amount.
    181. The local labor submarkets in which the Processor Defendants 
and Processor Conspirators have suppressed competition, which 
suppressed poultry processing plant workers' compensation, include:
    a. the ``Eastern Shore Poultry Region'': containing eleven primary 
poultry processing facilities \7\ in Hurlock, MD; Salisbury, MD; 
Princess Anne, MD; Harbeson, DE; Millsboro, DE; Selbyville, DE; 
Georgetown, DE; Milford, DE; Norma, NJ; Accomac, VA; and 
Temperanceville, VA, four of which are owned by Processor Co-
Conspirator 14, five of which are owned by other Processor 
Conspirators, and two of which are owned by other poultry processors;
---------------------------------------------------------------------------

    \7\ The number of primary poultry processing facilities in the 
Amended Complaint is based on data from the United States Department 
of Agriculture on chicken and turkey slaughtering from 2022 and 
excludes facilities designated as ``Very Small.''
---------------------------------------------------------------------------

    b. the ``Central Valley Poultry Region'': containing three primary 
poultry processing facilities in Fresno, CA and Sanger, CA, two of 
which are owned by Processor Co-Conspirator 7, and one of which is 
owned by another Processor Conspirator;
    c. the ``West-Central Missouri Poultry Region'': containing two 
primary poultry processing facilities in California, MO and Sedalia, 
MO, one of which is owned by Defendant Cargill, and one of which is 
owned by another Processor Conspirator;
    d. the ``Ozark Poultry Region'': containing nineteen primary 
poultry processing facilities in Huntsville, AR; Ozark, AR; Springdale, 
AR; Fort Smith, AR; Clarksville, AR; Dardanelle, AR; Green Forest, AR; 
Waldron, AR; Danville, AR; Carthage, MO; Cassville, MO; Southwest City, 
MO; Monett, MO; Noel, MO; Heavener, OK; and Jay, OK, two of which are 
owned by Defendant George's, one of which is owned by Processor Co-
Conspirator 17, one of which is owned by Defendant Wayne, one of which 
is owned by Defendant Cargill, thirteen of which are owned by other 
Processor Conspirators, and one of which is owned by another poultry 
processor;
    e. the ``Ouachita Poultry Region'': containing five primary poultry 
processing facilities in De Queen, AR; Grannis, AR; Hope, AR; 
Nashville, AR; and Broken Bow, OK, one of which is owned by Processor 
Co-Conspirator 15, and four of which are owned by another Processor 
Conspirator;
    f. the ``East Texas Poultry Region'': containing four primary 
poultry processing facilities in Lufkin, TX; Nacogdoches, TX; Carthage, 
TX; and Center, TX, two of which are owned by Processor Co-Conspirator 
15, and two of which are owned by another Processor Conspirator;
    g. the ``River Valley Poultry Region'': containing three primary 
poultry processing facilities in Union City, TN; Humboldt, TN; and 
Hickory, KY, one of which is owned by Processor Co-Conspirator 15, and 
two of which are owned by another Processor Conspirator;
    h. the ``Western Coal Fields Poultry Region'': containing two 
primary poultry processing facilities in Cromwell, KY and Robards, KY, 
one of which is owned by Processor Co-Conspirator 14, and one of which 
is owned by another Processor Conspirator;
    i. the ``North/South Carolina Poultry Region'': containing seven 
primary poultry processing facilities in Lumber Bridge, NC; Rockingham, 
NC; Marshville, NC; St. Pauls, NC; Monroe, NC; and Dillon, SC, two of 
which are owned by Processor Co-Conspirator 14, two of which are owned 
by Processor Co-Conspirator 15, one of which is owned by Defendant 
Sanderson, two of which are owned by other Processor Conspirators, and 
one of which is owned by another poultry processor;
    j. the ``Northern Georgia Poultry Region'': containing eleven 
primary poultry processing facilities in Cornelia, GA; Murrayville, GA; 
Gainesville, GA; Athens, GA; Canton, GA; Ellijay, GA; Cumming, GA; 
Bethlehem, GA; Marietta, GA; and Pendergrass, GA, two of which are 
owned by Processor Co-Conspirator 7, four of which are owned by 
Processor Co-Conspirator 15, one of which is owned by Defendant Wayne, 
two of which are owned by other Processor Conspirators, and two of 
which are owned by other poultry processors;
    k. the ``Central Georgia Poultry Region'': containing two primary 
poultry processing facilities in Perry, GA and Vienna, GA, one of which 
is owned by Processor Co-Conspirator 14, and one of which is owned by 
another Processor Conspirator;
    l. the ``Chattanooga Poultry Region'': containing two primary 
poultry processing facilities in Chattanooga, TN, one of which is owned 
by Processor Co-Conspirator 15, and one of which is owned by another 
Processor Conspirator;
    m. the ``Central North Carolina Poultry Region'': containing two 
primary poultry processing facilities in Sanford, NC; and Siler City, 
NC, one of which is owned by Processor Co-Conspirator 15, and one of 
which is owned by another Processor Conspirator;
    n. the ``Southern Alabama/Georgia Poultry Region'': containing 
seven primary poultry processing facilities in Enterprise, AL; Dothan 
AL; Jack AL; Union Springs AL; Bakerhill, AL; Montgomery AL; and 
Bluffton, GA, one of which is owned by Processor Co-Conspirator 15, 
three of which are owned by Defendant Wayne, two of which are owned by 
other Processor Conspirators, and one of which is owned by another 
poultry processor;
    o. the ``Northern Alabama Poultry Region'': containing eleven 
primary poultry processing facilities in Guntersville, AL; 
Russellville, AL; Albertville, AL; Decatur, AL; Blountsville, AL; 
Collinsville, AL; Gadsden, AL; Jasper, AL; Cullman, AL; and Tuscaloosa 
AL, two of which are owned by Processor Co-Conspirator 15, two of which 
are owned by Defendant Wayne, five of which are owned by other 
Processor Conspirators, and two of are owned by other poultry 
processors;
    p. the ``Western North Carolina Poultry Region'': containing four 
primary poultry processing facilities in Dobson, NC; Wilkesboro, NC; 
Morganton, NC; and Winston-Salem, NC, one of which is owned by 
Defendant Wayne, two of which are owned by other Processor 
Conspirators, and one of which is owned by another poultry processor;
    q. the ``Virginia/West Virginia Poultry Region'': containing eight 
primary poultry processing facilities in Timberville, VA; Moorefield, 
WV; Dayton, VA; Edinburg, VA; Harrisonburg, VA; New Market, VA; and 
Hinton, VA, one of which is owned by Defendant Cargill, two of which 
are owned by Defendant George's, two of which are owned by Processor 
Co-

[[Page 34047]]

Conspirator 15, two of which are owned by other Processor Conspirators, 
and one of which is owned by other poultry processors;
    r. the ``Laurel Poultry Region'': containing six primary poultry 
processing facilities in Collins, MS; Laurel, MS; Hattiesburg, MS; Bay 
Springs, MS: and Moselle MS, two of which are owned by Defendant 
Sanderson, one of which was owned by Defendant Wayne until 2021 and is 
now owned by another Processor Conspirator, one of which is owned by 
another Processor Conspirator, and at least two of which are owned by 
other poultry processors; and
    s. the ``Southern Georgia Poultry Region'': containing three 
primary poultry processing facilities in Moultrie, GA; Camilla, GA; and 
Bluffton, GA, one of is was owned by Defendant Sanderson, one of which 
is owned by another Processor Conspirator, and one of which is owned by 
another poultry processor.
    182. The United States is also a relevant geographic market for 
primary poultry processing plant labor. Poultry processing plant jobs 
outside the United States are not reasonable substitutes for workers 
seeking employment in the United States.
    183. Many poultry processors make significant compensation 
decisions at a nationwide level. The executives in charge of such 
decisions often set nationwide policies or budgets for processors' 
wages and benefits. These nationwide decisions then influence local 
decisions, such as setting different wage base rates between particular 
local plants. At least one Processor Conspirator, Defendant Sanderson, 
sets its processing plant workers' wages at a nationwide level, meaning 
workers in the same position at different plants in different local 
areas receive the same base compensation.
    184. Poultry processors also sometimes recruit workers from beyond 
the local regions where particular plants are located. For example, 
they may make use of their current workers' personal connections to 
recruit their friends or family members internationally, such as by 
giving referral bonuses to current workers. And some workers move 
between states or internationally to take processing plant jobs.
    185. The Processor Defendants also viewed themselves as part of a 
nationwide market for poultry processing plant work. They gave 
significant time, expertise, and money over at least two decades to 
participate in the nationwide WMS Survey Group, including traveling to 
Florida (or another resort destination) to meet in person and swap 
compensation information about both hourly and salaried workers with 
poultry processors from across the country. The Steering Committee of 
the WMS Survey Group restricted the Group's membership to poultry 
processors with at least three plant locations nationwide.
    186. Informed by their knowledge of and experience with their labor 
pool of potential and actual poultry processing plant workers, the 
Processor Conspirators chose to compose the WMS Survey Group to include 
poultry processors nationwide. The Processor Conspirators are not 
likely to have wasted their time and money on useless information 
exchanges. Thus, the Processor Conspirators, with the help of 
Defendants WMS and Meng and Consultant Co-Conspirator 1, formed their 
agreement to collaborate on compensation decisions, including through 
the anticompetitive exchange of compensation information, at a 
nationwide level.
    187. The Processor Conspirators together control more than 90 
percent of poultry processing plant jobs nationwide. A hypothetical 
monopsonist of poultry labor jobs nationwide would likely be able to 
suppress compensation for poultry workers by a small, but significant, 
amount.

D. Market Power

    188. Together, the Processor Conspirators control over 90 percent 
of poultry processing plant jobs nationwide; the four largest of the 
Processor Conspirators control about half of that share. The Processor 
Conspirators also control at least 80 percent of poultry processing 
jobs in relevant local submarkets.
    189. Further, many poultry processing plants are located in rural 
areas near poultry grower operations. The processors likely have even 
greater buyer market power in these markets, in which there are often 
fewer full-time, year-round jobs available than in more heavily 
populated areas.
    190. Finally, the nature of labor markets generally means employers 
have market power at far lower levels of market share than the 
Processor Conspirators have here. Labor markets are matching markets--
employees cannot simply switch jobs like a customer switches from one 
beverage to another. Finding a new job takes time, effort, and often, 
money. The new employer has to offer the job to the worker, while the 
employee must overcome the inertia provided by an existing job, even if 
it is an unfavorable one, to seek out and find, interview for, and 
accept the new job. Employees often have less freedom to move to take a 
new job due to family commitments such as their spouse's employment, 
their children's education, or the need to provide care to family 
members. Thus, workers are more likely to stay in the jobs they already 
have than consumers are to continue to buy the same product; labor 
markets come with a level of ``stickiness'' that many product markets 
do not.

E. Anticompetitive Effects: Processor Conspirators' Conspiracy 
Anticompetitively Affected Decisions About Compensation for Plant 
Processing Workers

    191. The Processor Conspirators' pervasive and decades-long 
conspiracy and anticompetitive exchange of current and future, 
disaggregated, and identifiable information, facilitated and furthered 
by the Consultant Defendants, suppressed compensation for poultry 
processing plant workers nationwide. This anticompetitive agreement 
distorted the competitive mechanism for wage-setting and robbed poultry 
processing plant workers of the benefits of full and fair competition 
for their labor.
    192. In labor markets, reductions to absolute compensation are 
unusual. Thus, the anticompetitive effects of agreements in such 
markets are most likely to be reflected in compensation remaining flat 
or increasing at a lower rate than would have occurred without the 
anticompetitive conduct.
    193. The Processor Defendants' anticompetitive information sharing 
about poultry processing plant worker compensation supported their 
larger conspiracy to collaborate with competitors on their own 
compensation decisions. Both their broader conspiracy to collaborate 
and their information sharing suppressed competition among them and led 
to compensation that was lower than it would have been without either 
the larger conspiracy or the information sharing alone.
    194. As the Processor Defendants themselves admitted to each other 
in emails, they used the current and future, disaggregated, and 
identifiable compensation data they exchanged directly and through 
consultants when making compensation decisions company-wide and for 
specific positions and plant locations. Because the shared information 
allowed the Processor Defendants to understand how their competitors 
currently compensated plant workers, or were planning to in the future, 
the

[[Page 34048]]

information they exchanged allowed the Processor Defendants to offer 
lower compensation than they would have had to absent their agreement. 
The Processor Defendants' collaboration distorted the typical 
competitive process in which they would have had to fully and fairly 
compete by making their own independent choices about what wages and 
benefits to offer workers.
    195. Further, because of the length of time the Processor 
Defendants were able to engage in their conspiracy and their financial 
interest in keeping their labor costs below competitive levels, they 
are likely to continue collaborating and exchanging compensation 
information unless they are enjoined from doing so.
    196. Conduct by multiple Defendants in 2009 illustrates the types 
of effects likely to have occurred as a result of the Defendants' 
conduct.
    197. In January 2009, an executive at Processor Co-Conspirator 14 
emailed Defendants Cargill, George's, Sanderson, and Wayne and 
Processor Co-Conspirators 6, 7, 15, and 18 seeking her competitors' 
help on the question of ``plant and merit increases'' for the next 
year. She described to her competitors that ``Our fiscal year begins 
03/30/09, and, we have recently started talking about delaying.'' She 
asked these competitors, ``I am curious to find out if anyone has (or 
is in discussions) about postponing plant or merit increases.'' In 
addition, in the same email, she noted, ``I know there has been some 
previous dialogue about plant and merit increases.'' This 
correspondence both makes clear that Processor Co-Conspirator 14 was 
seeking its competitors' assistance in making its own wage decisions 
and suggests that the competitors had held similar discussions before. 
The Processor Co-Conspirator 14 executive sent her email directly in 
response to a question from an executive for Processor Co-Conspirator 6 
about making travel and scheduling arrangements to meet in person for 
the annual WMS Survey Group meeting.
    198. In July 2009, a strikingly similar discussion took place 
between Defendant George's and Processor Co-Conspirators 17 and 18. 
George's Vice President of Human Resources emailed at least two of 
George's competitors, Processor Co-Conspirator 17 and Processor Co-
Conspirator 18, disclosing to Processor Co-Conspirator 17 that ``we are 
working on budgets for our next fiscal year. . . . We are looking at a 
raise in September/Oct. and have not decided on the amount yet . . . 
we're surveying the other poultry companies to get a feel for what they 
are going to do.'' As a result, he asked Processor Co-Conspirator 17, 
``Do you know what [Processor Co-Conspirator 17] is planning on giving 
in the way of % or $ amount for your processing plants? What month will 
the raise go into effect?'' He concluded, ``I will be happy to let you 
know our decision within the next week.'' Processor Co-Conspirator 17's 
VP of People Services responded to the George's executive that ``We 
have no plans at this time to give increases.''
    199. The George's executive made a similar disclosure to Processor 
Co-Conspirator 18--``We are budgeting for our next fiscal year''--as 
well as a similar request--``and was wondering what [Processor Co-
Conspirator 18] is going to do as far as Plant Wages in November? Do 
you know the % amount or $ amount that [Processor Co-Conspirator 18] 
will be giving in Springdale and Monett, MO?'' The George's executive 
also, as he did with Processor Co-Conspirator 17, promised an exchange: 
``I will be able to give you ours within the next week or so as well.'' 
The Processor Co-Conspirator 18 executive responded, ``Sorry, we don't 
know yet what we are going to do,'' to which the George's executive 
replied ``will you please share with me once you know?''
    200. A later document from July 2010 states that the effective date 
of Processor Co-Conspirator 18's last plant-wide wage raise was in 
November 2008, suggesting that Processor Co-Conspirator 18, like 
Processor Co-Conspirator 17, did not raise its wages in 2009.
    201. While in the years before and after 2009, George's typically 
raised its hourly plant worker wages, in 2009 itself, after hearing 
directly from its competitor Processor Co-Conspirator 17, and 
potentially also from its competitor Processor Co-Conspirator 18, 
George's chose not to raise its hourly worker wages. Thus, because 
George's collaborated with its competitors through the direct sharing 
of future compensation information, and received comfort from those 
competitors that they did not plan to raise their employees' wages, 
George's processing plant employees suffered a harmful effect.
    202. Evidence of harmful effects from an information-sharing 
conspiracy is not restricted to denials of wage raises or choices not 
to grant benefits. If each participant in a labor market is suppressing 
its compensation levels by using information about its competitors' 
compensation plans to make smaller and more targeted wage increases 
than it would have absent such information sharing, wages will rise 
more slowly, and for fewer workers, than they would have without the 
conspiracy.
    203. For example, in 2013, Processor Co-Conspirator 18's Director 
of Labor Compensation informed her coworkers that in preparation for 
internal decision-making about plant wages, Processor Co-Conspirator 18 
``completed a third-party survey with competing poultry companies. With 
this information, we feel that we are in a better position to 
strategically evaluate wages on a location by location level.'' 
Attached to this email are charts using data exchanged about competing 
processors' base wage rates through the WMS Survey Group, as well as 
other documents to which ``We [Processor Co-Conspirator 18] have added 
the [Consultant Co-Conspirator 1] wages and ranking'' and ``maintenance 
start and base rates by [Consultant Co-Conspirator 1] region.'' At 
least three of these charts marked specific plants for which Processor 
Co-Conspirator 18, as compared to the averages of other processors' 
plants in that region, was paying below median wages for the industry.
    204. The information exchange informed Processor Co-Conspirator 18 
exactly where and by how much it would have to increase wages to match 
its competitors; the exchange deprived plant workers, who lack any 
comparable information, of an independent effort by Processor Co-
Conspirator 18 to recruit and hire workers by competing against other 
processors.
    205. Defendant Wayne has admitted that it used its collaboration 
with the Processor Conspirators, and the information they exchanged 
with each other, in this way. Wayne's compensation strategy was to pay 
wages at or near the midpoint of compensation (i.e., 50%) for its 
workers as compared to its competitors. Wayne's discussions and 
exchange of compensation information with the Processor Conspirators 
allowed it to more precisely target what the mid-point of compensation 
would be, suppressing the rise in compensation that might otherwise 
have occurred if Wayne had less ability to target that mid-point.
    206. Similarly, Defendant Cargill used discussions and exchange of 
compensation information with the Processor Conspirators to assist in 
determining the ``salary bands'' it would set for salaried worker 
positions. Cargill sent these band amounts to local plant managers to 
inform the setting of local wages. Cargill admitted that on at least 
one occasion the WMS Survey Group compensation data influenced 
Cargill's decision to lower the salary band range

[[Page 34049]]

for plant supervisors from where it had originally set that band.
    207. The Processor Conspirators' compensation information exchanges 
therefore distorted compensation-setting processes in the poultry 
processor plant worker labor market and harmed the competitive process.

VII. Violations Alleged

Count I: Sherman Act Section 1 (By the United States Against All 
Defendants)

    208. Paragraphs 1 through 207 are repeated and realleged as if 
fully set forth herein.
    209. The Processor Defendants violated Section 1 of the Sherman 
Act, 15 U.S.C. 1, by agreeing to collaborate with and assist their 
competitors in making poultry processing worker compensation decisions, 
to exchange current and future, disaggregated, and identifiable 
information about their compensation of poultry processing plant 
workers, and to facilitate this collaboration and such exchanges. This 
agreement suppressed compensation for poultry processing workers for 
decades.
    210. This agreement included more than 20 years of discussions 
between and among these competitors about wage and benefit policies and 
amounts, which went well beyond the sharing of information and included 
consultation and advice-giving--as one processor put it, ``a 
collaborative working relationship''--on decisions that were 
competitively sensitive and should have been made independently.
    211. The agreement also included exchanging (or, for the Consultant 
Defendants, facilitating the exchange of) competitively sensitive 
information about poultry processing plant workers' wages and benefits 
at both local levels and the national level. Such exchanges allowed 
these competitors to understand wages and benefits paid or planned by 
specific competitors, in specific places, to specific types of workers. 
(Standing alone, these exchanges of information would constitute a 
violation of Section 1 of the Sherman Act.)
    212. The Processor Defendants themselves understood that their 
anticompetitive agreement likely raised serious legal concerns. They 
went to great lengths to keep their exchanges confidential. Some 
expressed their concerns explicitly; others abandoned some of the 
larger-group exchanges once antitrust investigations and private 
lawsuits began to uncover their behavior. The Processor Defendants and 
Processor Conspirators nonetheless continued exchanging information 
through less observable methods, for example through Consultant Co-
Conspirator 1.
    213. The Processor Conspirators' market power increases their 
agreement's likely anticompetitive effects. In relevant local labor 
submarkets, they control more than 80 percent of poultry processing 
jobs--in some areas, likely 100 percent of poultry processing jobs--and 
thus have market power in local markets for poultry processing plant 
workers. They enjoy outsize market power over the supply of poultry 
processing plant jobs in these local areas, in which they are often 
among the largest employers. In the national market, they control over 
90 percent of poultry processing jobs nationwide, and thus have buyer 
market power in the nationwide market for poultry processing plant 
workers. Their choice to collaborate on compensation decisions and to 
exchange information, even though they had buyer market power, 
disrupted the competitive mechanism for negotiating and setting wages 
and benefits for poultry processing plant workers and harmed the 
competitive process.
    214. As described in more detail in paragraphs 1 through 213 above, 
from 2000 or earlier to the present, Defendants Cargill, George's, 
Sanderson, Wayne, WMS, and G. Jonathan Meng agreed to collaborate with 
and assist their competitors in making compensation decisions and to 
exchange current and future, disaggregated, and identifiable 
compensation information, or to facilitate this anticompetitive 
agreement, an unlawful restraint of trade under Section 1 of the 
Sherman Act, 15 U.S.C. 1.
    215. There is no justification, procompetitive or otherwise, for 
large, profitable, and sophisticated competitors collaborating with the 
effect of suppressing wages and benefits for their workers.
    216. The Defendants' agreement to collaborate on compensation 
decisions, exchange current and future compensation information, and 
facilitate those collaborations and exchanges suppressed poultry 
processing plant worker compensation. It constitutes an unreasonable 
restraint of interstate trade and commerce in the nationwide and in 
local labor markets for hourly and salaried poultry processing plant 
workers. This offense is likely to continue and recur unless this court 
grants the requested relief.

Count II: Packers and Stockyards Act Section 202(a) (By the United 
States Against Sanderson and Wayne Only)

    217. Paragraphs 1 through 216 are repeated and realleged as if 
fully set forth herein.
    218. Defendants Sanderson and Wayne violated Section 202(a) of the 
Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. 
192(a), by engaging in deceptive practices regarding their contracts 
with growers. These deceptions deprived growers of material information 
necessary to make informed decisions about their contracting 
opportunities and to compare offers from different poultry processors.
    219. Defendants Sanderson and Wayne are ``live poultry dealers'' 
under 7 U.S.C. 182(10), because each is engaged in the business of 
obtaining live poultry under a poultry growing arrangement for the 
purpose of slaughtering it.
    220. Defendants Sanderson's and Wayne's grower contracts concern 
``live poultry'' under 7 U.S.C. 182(6), 192, because the contracts 
concerned the raising of live chickens.
    221. Defendants Sanderson and Wayne each engaged in deceptive 
practices through their grower contracts, which omitted material 
disclosures about how each compensates growers. Those disclosures would 
have provided information the grower needs to effectively compete in 
the tournament system and allowed growers to evaluate their likely 
return and risks, including, among other things the variability of 
inputs the grower would receive, the risks regarding downside penalties 
for underperforming relative to other growers in the tournament system.
    222. Defendants Sanderson's and Wayne's deceptive practices are 
ongoing and likely to continue and recur unless the court grants the 
requested relief.

VIII. Requested Relief

    223. The United States requests that this Court:
    a. rule that Defendants' conspiracy to collaborate on processing 
plant compensation decisions, including through the exchange of 
compensation information, has unreasonably restrained trade and is 
unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1;
    b. rule that Defendants' exchange of compensation information 
itself, without more, has unreasonably restrained trade and is unlawful 
under Section 1 of the Sherman Act, 15 U.S.C. 1;
    c. permanently enjoin and restrain all Defendants from 
collaborating on

[[Page 34050]]

decisions related to worker wages and benefits with any other company 
engaged in poultry growing or processing or the sale of poultry 
products;
    d. permanently enjoin and restrain all Defendants from sharing, or 
facilitating the sharing of, information about compensation for their 
workers with any other company engaged in poultry growing or processing 
or the sale of poultry products, whether that sharing is direct or 
indirect;
    e. require all Defendants to take such internal measures as are 
necessary to ensure compliance with that injunction;
    f. impose on all Defendants a Monitoring Trustee to ensure 
compliance with the antitrust laws;
    g. grant equitable monetary relief;
    h. permanently enjoin and restrain Defendants Sanderson and Wayne 
from engaging in deceptive practices regarding their contracts with 
growers;
    i. require Defendants Sanderson and Wayne to make appropriate 
disclosures to growers before entering into contracts concerning live 
poultry, in order to provide sufficient information for the growers to 
understand the scope of the contract and the potential risks;
    j. require Defendants Sanderson and Wayne to modify their grower 
compensation systems to eliminate the harm arising from each firm's 
failure to disclose to growers all of the potential risks associated 
with that firm's compensation system;
    k. grant other relief as required by the nature of this case and as 
is just and proper to prevent the recurrence of the alleged violation 
and to dissipate its anticompetitive effects, including such structural 
relief as may be necessary to prevent the anticompetitive effects 
caused by the challenged conduct and described in this Amended 
Complaint;
    l. award the United States the costs of this action; and
    m. award such other relief to the United States as the Court may 
deem just and proper.

Dated: May 17, 2023
Respectfully submitted,
For Plaintiff United States of America,
Jonathan Kanter,
Assistant Attorney General.

Doha Mekki,
Principal Deputy Assistant Attorney General.

Michael Kades,
Deputy Assistant Attorney General.

Hetal J. Doshi,
Deputy Assistant Attorney General for Litigation.

Ryan Danks,
Director of Civil Enforcement.

Miriam R. Vishio (USDC Md. Bar No. 17171),
Deputy Director of Civil Enforcement.

Daniel Guarnera,
Acting Chief, Civil Conduct Task Force.

Kate M. Riggs (USDC Md. Bar No. 18154),
Acting Assistant Chief, Civil Conduct Task Force.

United States Department of Justice, Antitrust Division.

By:--------------------------------------------------------------------

Kathleen Simpson Kiernan,
Jessica J. Taticchi,
Jeremy C. Keeney,
Eun Ha Kim,
United States Department of Justice, Antitrust Division, Civil 
Conduct Task Force, 450 Fifth Street NW, Suite 8600, Washington, DC 
20530, Tel: 202-353-3100, Fax: 202-616-2441, 
[email protected].

Erek L. Barron,
United States Attorney.

Ariana Wright Arnold,
USDC Md. Bar No. 23000,
Assistant United States Attorney, 36 S Charles St., 4th Floor, 
Baltimore, Maryland 21201, Tel: 410-209-4813, Fax: 410-962-2310, 
[email protected].

United States District Court for the District of Maryland

    United States of America, Plaintiff, v. Cargill Meat Solutions 
Corporation, et al., Defendants.

Civil Action No.: 22-cv-1821
(Gallagher, J.)

[Proposed] Final Judgment

    Whereas, Plaintiff, the United States of America, moved to amend 
its Complaint on May 17, 2023, alleging that Defendants George's, Inc. 
and George's Foods, LLC (collectively, ``Settling Defendants'') 
violated Section 1 of the Sherman Act, 15 U.S.C. 1;
    And whereas, the United States and Settling Defendants have 
consented to the entry of this Final Judgment without the taking of 
testimony, without trial or adjudication of any issue of fact or law, 
and without this Final Judgment constituting any evidence against or 
admission by any party relating to any issue of fact or law;
    And whereas, Settling Defendants agree to undertake certain actions 
and refrain from certain conduct for the purpose of remedying the 
anticompetitive effects alleged in the Amended Complaint;
    And whereas, Settling Defendants agree to be bound by the 
provisions of this Final Judgment pending its approval by the Court;
    Now therefore, it is ordered, adjudged, and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of this action 
and each of the parties named herein. The Amended Complaint states a 
claim upon which relief may be granted against the Settling Defendants 
under Section 1 of the Sherman Act, 15 U.S.C. 1.

II. Definitions

    As used in this Final Judgment:
    A. ``Agreement'' means any contract, arrangement, or understanding, 
formal or informal, oral or written, between two or more persons.
    B. ``George's, Inc.'' means Defendant George's, Inc., a privately-
held company headquartered in Springdale, Arkansas, its successors and 
assigns, subsidiaries, divisions, groups, affiliates, partnerships, and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    C. ``George's Foods'' means Defendant George's Foods, LLC, a 
company headquartered in Edinburg, Virginia that is an affiliate of 
George's, Inc., and its successors and assigns, subsidiaries, 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees.
    D. ``Communicate'' means to discuss, disclose, transfer, 
disseminate, circulate, provide, request, solicit, send, receive or 
exchange information or opinion, formally or informally, directly or 
indirectly, in any manner, and regardless of the means by which it is 
accomplished, including orally or by written means of any kind, such as 
electronic communications, emails, facsimiles, telephone 
communications, voicemails, text messages, audio recordings, meetings, 
interviews, correspondence, exchange of written or recorded 
information, including surveys, or face-to-face meetings.
    E. ``Compensation'' means all forms of payment for work, including 
salaried pay, hourly pay, regular or ad hoc bonuses, over-time pay, and 
benefits, including healthcare coverage, vacation or personal leave, 
sick leave, and life insurance or disability insurance policies.
    F. ``Competitively Sensitive Information'' means information that 
is relevant to, or likely to have an impact on, at least one dimension 
of competition, including price, cost (including Compensation), output, 
quality, and innovation. Competitively Sensitive Information includes 
prices, strategic plans, amounts and types of Compensation, formula and 
algorithms used for calculating Compensation or proposed Compensation, 
other information related to costs or profits, markets, distribution, 
business relationships, customer lists, production capacity, and any 
confidential information the exchange of which could harm competition.
    G. ``Consulting Firm'' means any organization, including Webber, 
Meng, Sahl & Company, Inc. and Agri Stats,

[[Page 34051]]

Inc., that gathers, sorts, compiles, and/or sells information about 
Compensation for Poultry Processing Workers, or provides advice 
regarding Compensation for Poultry Processing Workers; ``Consulting 
Firm'' does not include job boards, employment agencies or other 
entities that facilitate employment opportunities for employees.
    H. ``Grower'' means any person engaged in the business of raising 
and caring for live Poultry for slaughter by another, whether the 
Poultry is owned by such a person or by another, but not an employee of 
the owner of such Poultry.
    I. ``Human Resources Staff'' means any and all full-time, part-
time, or contract employees of Settling Defendants, wherever located, 
whose job responsibilities relate in any way to hiring or retaining 
workers, employment, or evaluating, setting, budgeting for, 
administering, or otherwise affecting Compensation for Poultry 
Processing Workers, and any other employee or agent working at any of 
those employees' direction.
    J. ``Including'' means including, but not limited to.
    K. ``Jien'' means the case Jien v. Perdue Farms, Inc., No. 1:19-cv-
2521 (D. Md.).
    L. ``Management'' means all directors and executive officers of 
Settling Defendants, or any other of Settling Defendants' employees 
with management or supervisory responsibilities related to hiring, 
employment, or Compensation of Poultry Processing plant labor, 
including Poultry Processing plant managers.
    M. ``Person'' means any natural person, corporation, firm, company, 
sole proprietorship, partnership, joint venture, association, 
institute, governmental unit, or other legal entity.
    N. ``Poultry'' means chicken or turkey.
    O. ``Poultry Processing'' means the business of raising, 
slaughtering, cleaning, packing, packaging, and related activities 
associated with producing Poultry, including activities conducted by 
Poultry Processors at integrated feed mills, hatcheries, and processing 
plant facilities and the management of those activities.
    P. ``Poultry Processing Worker'' means anyone paid any 
Compensation, directly or indirectly (such as through a temporary 
employment agency or third-party staffing agency), by a Poultry 
Processor related to Poultry Processing, including temporary workers, 
permanent workers, employees, workers paid hourly wages, workers paid 
salaried wages, and workers paid benefits.
    Q. ``Poultry Processor'' means any person (1) who is engaged in 
Poultry Processing or (2) that has full or partial ownership or control 
of a Poultry Processing facility, or (3) that provides Compensation to 
Poultry Processing Workers; ``Poultry Processor'' does not include 
staffing agencies or other entities that are not owned, operated, or 
controlled by a person engaged in Poultry Processing or that owns or 
controls, in full or part, Poultry Processing facilities, that make 
individuals available to work at Poultry Processing facilities.
    R. ``Restitution Amount'' means $5.8 million for Settling 
Defendants.

III. Applicability

    This Final Judgment applies to Settling Defendants and all other 
persons in active concert or participation with them who receive actual 
notice of this Final Judgment.

IV. Prohibited Conduct

    A. Management and Human Resources Staff of each Settling Defendant 
must not, whether directly or indirectly, including through a 
Consulting Firm or other person:
    1. participate in any meeting or gathering (including in-person, 
virtual, and telephonic meetings and gatherings) related to 
Compensation for Poultry Processing Workers, or for any purpose related 
to Compensation for Poultry Processing Workers, at which any other 
Poultry Processor not owned or operated by Settling Defendants is 
present;
    2. Communicate Competitively Sensitive Information about 
Compensation for Poultry Processing Workers with any Poultry Processor 
not owned or operated by one or both Settling Defendants, including 
about types, amounts, or methods of setting or negotiating Compensation 
for Poultry Processing Workers;
    3. attempt to enter into, enter into, maintain, or enforce any 
Agreement with any Poultry Processor not owned or operated by one or 
both Settling Defendants about Poultry Processing Worker Compensation 
information, including how to set or decide Compensation or the types 
of Compensation for Poultry Processing Workers;
    4. Communicate Competitively Sensitive Information about 
Compensation for Poultry Processing Workers to any Poultry Processor 
not owned or operated by one or both Settling Defendants, including 
Communicating Competitively Sensitive Information about Compensation 
for Poultry Processing Workers to any Consulting Firm that produces 
reports regarding Compensation for Poultry Processing Workers that are 
shared with other Poultry Processors;
    5. use non-public, Competitively Sensitive Information about 
Compensation for Poultry Processing Workers from or about any Poultry 
Processor not owned or operated by one or both Settling Defendants; or
    6. encourage or facilitate the communication of Competitively 
Sensitive Information about Compensation for Poultry Processing Workers 
to or from any Poultry Processor not owned or operated by one or both 
Settling Defendants.
    B. Settling Defendants must not knowingly use from any Poultry 
Processor not owned or operated by one or both Settling Defendants or 
any of that Poultry Processor's officers, consultants, attorneys, or 
other representatives any Competitively Sensitive Information about 
Compensation for Poultry Processing Workers except as set forth in 
Section V or in connection with pending or threatened litigation as a 
party or fact witness, pursuant to court order, subpoena, or similar 
legal process, or for which any Settling Defendant has received 
specific prior approval in writing from the Division.
    C. The Settling Defendants must not retaliate against any employee 
or third party for disclosing information to the monitor described in 
Section VI, a government antitrust enforcement agency, or a government 
legislature.

V. Conduct Not Prohibited

    A. Nothing in Section IV prohibits a Settling Defendant from 
Communicating, using, or encouraging or facilitating the Communication 
of, its Competitively Sensitive Information with an actual or 
prospective Poultry Processing Worker, or with the Poultry Processing 
Worker's labor union or other bargaining agent, except that, if a 
prospective Poultry Processing Worker is employed by another Poultry 
Processor, Settling Defendants' Communicating, using, or encouraging or 
facilitating the Communication of, Competitively Sensitive Information 
is excluded from the prohibitions of Section IV only insofar as is 
necessary to negotiate the Compensation of a prospective Poultry 
Processing Worker. Settling Defendants are not prohibited from 
internally using Competitively Sensitive Information received from a 
prospective Poultry Processing Worker who is employed by a Poultry 
Processor in the ordinary course of a legitimate

[[Page 34052]]

hiring, retention, or off-boarding process, but Settling Defendants are 
prohibited from Communicating that Competitively Sensitive Information 
about Compensation for Poultry Processing Workers to another Poultry 
Processor.
    B. Nothing in Section IV prohibits the Settling Defendants from (1) 
sharing information with or receiving information from a staffing 
agency or entity that is not owned or controlled by any Poultry 
Processor, that facilitates employment, if necessary to effectuate an 
existing or potential staffing Agreement between the staffing agency or 
entity and the Settling Defendants; and (2) advertising Compensation 
through public job postings, billboards or help wanted advertisements.
    C. Nothing in Section IV prohibits Settling Defendants from, after 
securing advice of counsel and in consultation with their respective 
antitrust compliance officers, Communicating, using, encouraging or 
facilitating the Communication of, or attempting to enter into, 
entering into, maintaining, or enforcing any Agreement to Communicate 
Competitively Sensitive Information relating to Compensation for 
Poultry Processing Workers with any Poultry Processor when such 
Communication or use is for the purpose of evaluating or effectuating a 
bona fide acquisition, disposition, or exchange of assets:
    1. For all Agreements under Paragraph V(C) with any other Poultry 
Processor to Communicate Competitively Sensitive Information relating 
to Compensation for Poultry Processing Workers that a Settling 
Defendant enters into, renews, or affirmatively extends after the date 
of entry of this Final Judgment, the Settling Defendant must maintain 
documents sufficient to show:
    i. the specific transaction or proposed transaction to which the 
sharing of Competitively Sensitive Information relating to Compensation 
for Poultry Processing Workers relates;
    ii. the employees, identified with reasonable specificity, who are 
involved in the sharing of Competitively Sensitive Information relating 
to Compensation for Poultry Processing Workers;
    iii. with specificity the Competitively Sensitive Information 
relating to Compensation for Poultry Processing Workers Communicated; 
and
    iv. the termination date or event of the sharing of Competitively 
Sensitive Information relating to Compensation for Poultry Processing 
Workers.
    2. For Communications under Paragraph V(C), Settling Defendants 
must maintain copies of all materials required under Paragraph V(C)(1) 
for the duration of the Final Judgment, following entry into any 
Agreement to Communicate or receive Competitively Sensitive Information 
relating to Compensation for Poultry Processing Workers, and must make 
such documents available to the United States and the monitor appointed 
under Section VI upon request.
    D. Nothing in Section IV prohibits Settling Defendants, after 
securing the advice of counsel and in consultation with the antitrust 
compliance officer, from engaging in conduct in accordance with the 
doctrine established in Eastern Railroad Presidents Conference v. Noerr 
Motor Freight, Inc., 365 U.S. 127 (1961), United Mine Workers v. 
Pennington, 381 U.S. 657 (1965), and their progeny.
    E. Nothing in Paragraph IV(A)(1) prohibits Settling Defendants from 
participating in meetings and gatherings in which they receive (but do 
not provide) information relating to Compensation that does not reflect 
or reveal information received from or about one or more Poultry 
Processors.

VI. Monitor

    A. Upon application of the United States, which Settling Defendants 
may not oppose, the Court will appoint a monitor selected by the United 
States and approved by the Court. Within 30 calendar days after entry 
of the Stipulation and Order in this case, the Settling Defendants may 
together propose to the United States a pool of three candidates to 
serve as the monitor, and the United States may consider the Settling 
Defendants' perspectives on the Settling Defendants' three proposed 
candidates or any other candidates identified by the United States. The 
United States retains the right, in its sole discretion, either to 
select the monitor from among the three candidates proposed by the 
Settling Defendants or to select a different candidate for the monitor.
    B. The monitor will have the power and authority to monitor: (1) 
Settling Defendants' compliance with the terms of this Final Judgment 
entered by the Court, including compliance with Paragraph IV(C), and 
(2) Settling Defendants' compliance, regarding events occurring after 
entry of the Stipulation and Order in this case (even if such events 
began before that date), with the U.S. federal antitrust laws relating 
to Poultry Processing, Poultry Processing Workers, Growers, integrated 
Poultry feed, hatcheries, the transportation of Poultry and Poultry 
products, and the sale of Poultry and Poultry Processing products. The 
monitor may also have other powers as the Court deems appropriate. The 
monitor's power and authority will not extend to monitoring the 
processing of meat or material other than Poultry, even if such 
processing of meat or material other than Poultry takes place in a 
facility or location that also engages in Poultry Processing. The 
monitor will have no right, responsibility or obligation for the 
operation of Settling Defendants' businesses, and the Settling 
Defendants do not have any obligation to seek the monitor's approval or 
authorization before making business decisions. No attorney-client 
relationship will be formed between the Settling Defendants and the 
monitor.
    C. The monitor will serve at the cost and expense of Settling 
Defendants pursuant to a written Agreement, on terms and conditions, 
including confidentiality requirements and conflict-of-interest 
certifications, approved by the United States in its sole discretion.
    D. The monitor may hire, at the cost and expense of Settling 
Defendants, any agents and consultants, including attorneys and 
accountants, that are reasonably necessary in the monitor's judgment to 
assist with the monitor's duties. These agents or consultants will be 
solely accountable to the monitor and will serve on terms and 
conditions, including confidentiality requirements and conflict-of-
interest certifications, approved by the United States in its sole 
discretion.
    E. The compensation of the monitor and agents or consultants 
retained by the monitor must be on reasonable and customary terms 
commensurate with the individuals' experience and responsibilities. If 
the monitor and Settling Defendants are unable to reach agreement on 
the monitor's compensation or other terms and conditions of engagement 
within 14 calendar days of the appointment of the monitor, the United 
States, in its sole discretion, may take appropriate action, including 
by making a recommendation to the Court. Within three business days of 
hiring any agents or consultants, the monitor must provide written 
notice of the hiring and the rate of compensation to Settling 
Defendants and the United States.
    F. The monitor must account for all costs and expenses incurred.
    G. The monitor will have the authority to take such reasonable 
steps as, in the United States' view, may be necessary to accomplish 
the monitor's duties. The monitor may seek information from Settling 
Defendants' personnel, including in-house counsel, compliance 
personnel, and internal

[[Page 34053]]

auditors. If the monitor has confidence in the quality of the 
resources, the monitor may consider the products of Settling 
Defendants' processes, such as the results of studies, reviews, 
sampling and testing methodologies, audits, and analyses conducted by 
or on behalf of any Settling Defendant, as well as any of Settling 
Defendants' internal resources (e.g., legal, compliance, and internal 
audit), which may assist the monitor in carrying out the monitor's 
duties). The monitor may take into account (a) the extent to which the 
Settling Defendants have dedicated internal personnel to ensure 
compliance with this Order, (b) the quality of the compliance work 
performed by such internal personnel, and (c) the availability and 
quality of analyses conducted by such internal personnel in determining 
or modifying an appropriate work plan that enables the monitor to 
accomplish his or her duties without unnecessary involvement in the 
day-to-day operation of the business. The Settling Defendants will 
establish a policy, annually communicated to all employees, that 
employees may disclose any information to the monitor, without reprisal 
for such disclosure.
    H. Settling Defendants must use best efforts to cooperate fully 
with the monitor. Subject to reasonable protection for trade secrets 
and confidential research, development, or commercial information, or 
any applicable privileges or laws, Settling Defendants must (1) provide 
the monitor and agents or consultants retained by the monitor with full 
and complete access to all personnel, books, records, and facilities, 
and (2) use reasonable efforts to provide the monitor with access to 
Settling Defendants' former employees, Growers, third-party vendors, 
agents, and consultants. Settling Defendants may not take any action to 
interfere with or to impede accomplishment of the monitor's 
responsibilities.
    I. If Settling Defendants seek to withhold from the monitor access 
to anything or anyone on the basis of attorney-client privilege or the 
attorney work-product doctrine, or because Settling Defendants 
reasonably believe providing the monitor with access would be 
inconsistent with applicable law, the Settling Defendants must work 
cooperatively with the monitor to resolve the issue to the satisfaction 
of the monitor. If Settling Defendants and the monitor do not reach a 
resolution of the issue to the satisfaction of the monitor within 21 
calendar days, Settling Defendants must immediately provide written 
notice to the United States and the monitor. The written notice must 
include a description of what is being withheld and the Settling 
Defendants' legal basis for withholding access.
    J. Except as specifically provided by Paragraph VI(I), Settling 
Defendants may not object to requests made or actions taken by the 
monitor in fulfillment of the monitor's responsibilities under this 
Final Judgment or any other Order of the Court on any ground other than 
malfeasance by the monitor; provided, however, that if Settling 
Defendants believe in good faith that a request or action by the 
monitor pursuant to the monitor's authority under Paragraph VI(B)(2) 
exceeds the scope of the monitor's authority or is unduly burdensome, 
the Settling Defendants may object to the United States. Objections by 
Settling Defendants under this Paragraph VI(J) regarding a request or 
action exceeding the monitor's scope must be conveyed in writing to the 
United States and the monitor within 10 calendar days of the monitor's 
request or action that gives rise to Settling Defendants' objection. 
Objections by Settling Defendants under this Paragraph VI(J) regarding 
a request or action being unduly burdensome must be made, with 
specificity, to the monitor within seven calendar days of the request 
or action; if the Settling Defendants and the monitor cannot resolve 
the objections regarding a request or action being unduly burdensome, 
within 21 days of the request or action the Settling Defendants must 
convey their objections in writing to the United States. All objections 
will be resolved by the United States, in its sole discretion.
    K. The monitor must investigate and report on Settling Defendants' 
compliance with this Final Judgment, including those provisions 
governing Settling Defendants' communications with Poultry Processors 
and third parties related to Poultry Processing Worker Compensation 
information, and Settling Defendants' compliance, regarding events 
occurring after entry of the Stipulation and Order in this case (even 
if such events began before that date), with the U.S. federal antitrust 
laws relating to Poultry Processing, Poultry Processing Workers, 
Growers, integrated Poultry feed, hatcheries, the transportation of 
Poultry and Poultry products, and the sale of Poultry and Poultry 
Processing products.
    L. The monitor must provide periodic written reports to the United 
States and the Settling Defendants setting forth Settling Defendants' 
efforts to comply with their obligations under this Final Judgment and 
the U.S. federal antitrust laws relating to Poultry Processing, Poultry 
Processing Workers, Growers, integrated Poultry feed, hatcheries, the 
transportation of Poultry and Poultry products, and the sale of Poultry 
and Poultry Processing products. The monitor must provide written 
reports every six months for the first two years of the term of the 
monitor's appointment after which the monitor must provide written 
reports on an annual basis. The monitor must provide the first written 
report within six months of the monitor's appointment by the Court. The 
United States, in its sole discretion, may change the frequency of the 
monitor's written reports at any time, communicate or meet with the 
monitor at any time, and make any other requests of the monitor as the 
United States deems appropriate.
    M. Within 30 days after appointment of the monitor by the Court, 
and on a yearly basis thereafter, the monitor must provide to the 
United States and Settling Defendants a written work plan for the 
monitor's proposed review. Settling Defendants may provide comments on 
a written work plan to the United States and the monitor within 14 
calendar days after receipt of the written work plan. The United States 
retains the right, in its sole discretion, to request changes or 
additions to a work plan at any time. Any disputes between Settling 
Defendants and the monitor with respect to any written work plan will 
be decided by the United States in its sole discretion.
    N. The monitor will serve for the full term of this Final Judgment, 
unless the United States, in its sole discretion, determines a 
different period is appropriate. After three years from the date this 
Final Judgment was entered, the United States, in its sole discretion, 
will determine whether continuation of the monitor's full term is 
appropriate, or whether to suspend the remainder of the term.
    O. If the United States determines that the monitor is not acting 
diligently or in a reasonably cost-effective manner or if the monitor 
becomes unable to continue in their role for any reason, the United 
States may recommend that the Court appoint a substitute.

VII. Required Conduct

    A. Within 10 days of entry of this Final Judgment, Settling 
Defendants must appoint an antitrust compliance officer who is an 
internal employee or officer of the Settling Defendants and identify to 
the United States the antitrust compliance officer's name, business 
address, telephone number, and email address. Within 45 days of a 
vacancy in the antitrust compliance

[[Page 34054]]

officer position, Settling Defendants must appoint a replacement, and 
must identify to the United States the antitrust compliance officer's 
name, business address, telephone number, and email address. Settling 
Defendants' initial or replacement appointment of an antitrust 
compliance officer is subject to the approval of the United States, in 
its sole discretion.
    B. Settling Defendants' antitrust compliance officer must have, or 
must retain outside counsel who has, the following minimum 
qualifications:
    1. be an active member in good standing of the bar in any U.S. 
jurisdiction; and
    2. have at least five years' experience in legal practice, 
including experience with antitrust matters.
    C. Settling Defendants' antitrust compliance officer must, directly 
or through the employees or counsel working at the direction of the 
antitrust compliance officer:
    1. within 14 days of entry of the Final Judgment, furnish to the 
relevant Settling Defendants' Management, all Human Resources Staff, 
and Settling Defendants' retained Consulting Firms and utilized 
temporary employment agencies a copy of this Final Judgment, the 
Competitive Impact Statement filed by the United States with the Court, 
and a cover letter in a form attached as Exhibit 1;
    2. within 14 days of entry of the Final Judgment, in a manner to be 
devised by Settling Defendants and approved by the United States, in 
its sole discretion, provide Settling Defendants' Management, all Human 
Resources Staff, and Settling Defendant's retained Consulting Firms and 
utilized temporary employment agencies reasonable notice of the meaning 
and requirements of this Final Judgment;
    3. annually brief Settling Defendants' Management, Human Resources 
Staff, and Settling Defendants' retained Consulting Firms and utilized 
temporary employment agencies on the meaning and requirements of this 
Final Judgment and the U.S. federal antitrust laws;
    4. brief any person who succeeds a person in any position 
identified in Paragraph VII(C)(3) within 60 days of such succession;
    5. obtain from each person designated in Paragraph VII(C)(3) or 
VII(C)(4), within 30 days of that person's receipt of the Final 
Judgment, a certification that the person (i) has read and understands 
and agrees to abide by the terms of this Final Judgment; (ii) is not 
aware of any violation of the Final Judgment or of any violation of any 
U.S. antitrust law that has not been reported to Settling Defendants' 
Management; and (iii) understands that failure to comply with this 
Final Judgment may result in an enforcement action for civil or 
criminal contempt of court;
    6. annually communicate to Settling Defendants' Management and 
Human Resources Staff, and Settling Defendants' retained Consulting 
Firms and utilized temporary employment agencies that they may disclose 
to the antitrust compliance officer, without reprisal for such 
disclosure, information concerning any violation or potential violation 
of this Final Judgment or the U.S. federal antitrust laws by Settling 
Defendants; and
    7. maintain for five years or until expiration of the Final 
Judgment, whichever is longer, a copy of all materials required to be 
issued under Paragraph VII(C), and furnish them to the United States 
within 10 days if requested to do so, except documents protected under 
the attorney-client privilege or the attorney work-product doctrine.
    D. Each Settling Defendant must:
    1. within 30 days of the filing of the Amended Complaint, Proposed 
Final Judgment, or Competitive Impact Statement in this action, 
whichever is latest, provide notice to every Poultry Processor and to 
every Consulting Firm with which that Settling Defendant has a contract 
or Agreement in place relating to Compensation for Poultry Processing 
Workers, of the Amended Complaint, Proposed Final Judgment, and 
Competitive Impact Statement in a form and manner to be proposed by 
Settling Defendants and approved by the United States, in its sole 
discretion. Settling Defendants must provide the United States with 
their proposals, including their lists of recipients, within 10 days of 
the filing of the Amended Complaint;
    2. for all materials required to be furnished under Paragraph 
VII(C) that Settling Defendants claim are protected under the attorney-
client privilege or the attorney work-product doctrine, Settling 
Defendants must furnish to the United States a privilege log;
    3. upon Management or the antitrust compliance officer learning of 
any violation or potential violation of any of the terms and conditions 
contained in this Final Judgment, promptly take appropriate action to 
terminate or modify the activity so as to comply with this Final 
Judgment and maintain, and produce to the United States upon request, 
all documents related to any violation or potential violation of this 
Final Judgment;
    4. file with the United States a statement describing any violation 
or potential violation within 30 days of a violation or potential 
violation becoming known to Management or the antitrust compliance 
officer. Descriptions of violations or potential violations of this 
Final Judgment must include, to the extent practicable, a description 
of any communications constituting the violation or potential 
violation, including the date and place of the communication, the 
persons involved, and the subject matter of the communication;
    5. have their Chief Executive Officers or President certify to the 
United States annually on the anniversary date of the entry of this 
Final Judgment that the Settling Defendants have complied with all of 
the provisions of this Final Judgment, and list all Agreements subject 
to Paragraph V(C) from the prior year; and
    6. maintain and produce to the United States upon request: (i) a 
list identifying all employees having received the antitrust briefings 
required under Paragraphs VII(C)(3) and VII(C)(4); and (ii) copies of 
all materials distributed as part of the antitrust briefings required 
under Paragraph VII(C)(3) and VII(C)(4). For all materials requested to 
be produced under this Paragraph VII(D)(6) that a Settling Defendant 
claims is protected under the attorney-client privilege or the attorney 
work-product doctrine, Settling Defendant must furnish to the United 
States a privilege log.
    G. The term ``potential violation'' as used in this Section VII 
does not include the discussion with counsel, the antitrust compliance 
officer, or anyone working at counsel's or the antitrust compliance 
officer's direction, regarding future conduct.

VIII. Required Cooperation

    A. Settling Defendants must cooperate fully and truthfully with the 
United States in any investigation or litigation relating to the 
sharing of Poultry Processing Worker Compensation information among 
Poultry Processors, in violation of Section 1 of the Sherman Act, as 
amended, 15 U.S.C. 1. Settling Defendants must use their best efforts 
to ensure that all current officers, directors, employees, and agents 
also fully and promptly cooperate with the United States and use 
reasonable efforts to ensure that all former officers, directors, 
employees, and agents also fully and promptly cooperate with the United 
States. The full, truthful, and continuing cooperation of Settling 
Defendants must include:
    1. as requested on reasonable notice by the United States, being 
available for interviews, depositions, and providing

[[Page 34055]]

sworn testimony to the United States orally and in writing as the 
United States so chooses;
    2. producing, upon request of the United States, all documents, 
data, information, and other materials, wherever located, not protected 
under the attorney-client privilege or attorney work product doctrine, 
in the possession, custody, or control of that Settling Defendant, and 
a privilege log of any materials the Settling Defendant claims are 
protected under the attorney-client privilege or the attorney work-
product doctrine; and
    3. testifying at trial and other judicial proceedings fully, 
truthfully, and under oath, when called upon to do so by the United 
States.
    B. The obligations of Settling Defendants to cooperate fully and 
truthfully with the United States as required in this Section VIII will 
cease upon the conclusion of all investigations and litigation related 
to the sharing of Poultry Processing Worker Compensation information in 
violation of Section 1 of the Sherman Act, including exhaustion of all 
appeals or expiration of time for all appeals of any Court ruling in 
this matter, or the expiration of the Final Judgment, whichever is 
later.
    C. Settling Defendants must take all necessary steps to preserve 
all documents and information relevant to the United States' 
investigations and litigation alleging that Settling Defendants and 
other Poultry Processors shared Poultry Processing Worker Compensation 
information in violation of Section 1 of the Sherman Act until the 
United States provides written notice to the Settling Defendants that 
their obligations under this Section VIII have expired.
    D. Subject to the full, truthful, and continuing cooperation of 
each Settling Defendant, as required under this Section VIII, Settling 
Defendants are fully and finally discharged and released from any civil 
or criminal claim by the United States arising from the sharing of 
Poultry Processing Worker Compensation information among Poultry 
Processors prior to the date of filing of the Amended Complaint in this 
action; provided, however, that this discharge and release does not 
include any criminal claim arising from any subsequently-discovered 
evidence of an Agreement to fix prices or wages or to divide or 
allocate markets, including to allocate Poultry Processing Workers.
    E. Paragraph VIII(D) does not apply to any acts of perjury or 
subornation of perjury (18 U.S.C. 1621-22), making a false statement or 
declaration (18 U.S.C. 1001, 1623), contempt (18 U.S.C. 401-402), or 
obstruction of justice (18 U.S.C. 1503, et seq.) by any Settling 
Defendant.

IX. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment or of determining whether this Final Judgment should be 
modified or vacated, upon written request of an authorized 
representative of the Assistant Attorney General for the Antitrust 
Division, and reasonable notice to Settling Defendants, Settling 
Defendants must permit, from time to time and subject to legally 
recognized privileges, authorized representatives, including agents 
retained by the United States:
    1. to have access during Settling Defendants' office hours to 
inspect and copy, or at the option of the United States, to require 
Settling Defendants to provide electronic copies of all books, ledgers, 
accounts, records, data, and documents in the possession, custody, or 
control of Settling Defendants relating to any matters contained in 
this Final Judgment; and
    2. to interview, either informally or on the record, Settling 
Defendants' officers, employees, or agents, who may have their 
individual counsel present, relating to any matters contained in this 
Final Judgment. The interviews must be subject to the reasonable 
convenience of the interviewee and without restraint or interference by 
Settling Defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General for the Antitrust Division, Settling 
Defendants must submit written reports or respond to written 
interrogatories, under oath if requested, relating to any matters 
contained in this Final Judgment.

X. Restitution

    A. Within 60 days of entry of this Final Judgment, Settling 
Defendants must place funds equal to 10% of their Restitution Amount 
into an escrow account selected by the United States, in its sole 
discretion.
    B. If the Jien Court grants a motion for final approval of a 
settlement and certification of a settlement class with respect to 
Settling Defendants' settlement with the Jien plaintiffs, the entire 
balance of Settling Defendants' escrow account, including any accrued 
interest and less any administrative costs, must be returned to 
Settling Defendants.
    C. If Settling Defendants have not entered into a settlement 
agreement with the plaintiffs in Jien before entry of this Final 
Judgment, or if preliminary or final approval of a settlement is 
denied, or if certification of a settlement class is denied, or if a 
settlement is terminated or rescinded for any reason, Settling 
Defendants, within 21 days after (1) entry of this Final Judgment in 
the case of Settling Defendants having not reached a settlement 
agreement with the plaintiffs in Jien, or (2) any order denying 
settlement approval or certification of the settlement class or any 
termination or rescinding of a settlement, must deposit into their 
escrow account an amount equal to their Restitution Amount. This amount 
must be in addition to the initial 10% payment made pursuant to 
Paragraph X(A) and any accrued interest already present in the Settling 
Defendants' escrow account. Upon full funding of the escrow account, 
the entire balance of the escrow account, including any accrued 
interest, must be released to the United States for distribution to 
affected Poultry Processing Workers in the form of restitution and 
payment for expenses related to distribution. In the event that 
preliminary or final approval of a settlement or class certification is 
denied, or the settlement agreement is rescinded or terminated, for 
reasons that the United States in its sole discretion believes to be 
curable, the United States, in its sole discretion, may agree to one or 
more extensions of the 21-day period in this Paragraph X(C).
    D. The claims and disbursement process will be established in the 
sole discretion of the United States. Settling Defendants must 
reimburse the United States for any costs associated with claims 
administration or remittance of restitution, including fees payable to 
a third-party claims administrator hired at the United States' sole 
discretion, that extend beyond the sum of the initial 10% payments made 
by Settling Defendants under Paragraph X(A). Contributions beyond the 
initial 10% payments will be made on a pro rata basis based on Settling 
Defendants' Restitution Amount.
    E. Upon completion of the restitution payments, the United States 
must return any funds remaining in the escrow account to the Settling 
Defendants, on a pro rata basis based on Settling Defendants' 
Restitution Amount.

XI. Public Disclosure

    A. No information or documents obtained pursuant to any provision 
in this Final Judgment, including reports the monitor provides to the 
United States pursuant to Paragraphs VI(K) and VI(L), may be divulged 
by the United States or the monitor to any person other than an 
authorized representative of the executive branch of the United States, 
except in the course of legal

[[Page 34056]]

proceedings to which the United States is a party, including grand-jury 
proceedings, for the purpose of securing compliance with this Final 
Judgment, or as otherwise required by law. In the event that the 
monitor should receive a subpoena, court order or other court process 
seeking production of information or documents obtained pursuant to any 
provision in this Final Judgment, including reports the monitor 
provides to the United States pursuant to Paragraphs VI(K) and VI(L), 
the applicable disclosing party shall notify Settling Defendants 
immediately and prior to any disclosure, so that Settling Defendants 
may address such potential disclosure and, if necessary, pursue 
alternative legal remedies, including if deemed appropriate by Settling 
Defendants, intervention in the relevant proceedings.
    B. In the event of a request by a third party, pursuant to the 
Freedom of Information Act, 5 U.S.C. 552, for disclosure of information 
obtained pursuant to any provision of this Final Judgment, the 
Antitrust Division will act in accordance with that statute, and the 
Department of Justice regulations at 28 CFR part 16, including the 
provision on confidential commercial information, at 28 CFR 16.7. 
Settling Defendants submitting information to the Antitrust Division 
should designate the confidential commercial information portions of 
all applicable documents and information under 28 CFR 16.7. 
Designations of confidentiality expire 10 years after submission, 
``unless the submitter requests and provides justification for a longer 
designation period.'' See 28 CFR 16.7(b).
    C. If at the time that Settling Defendants furnish information or 
documents to the United States pursuant to any provision of this Final 
Judgment, Settling Defendants represent and identify in writing 
information or documents for which a claim of protection may be 
asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil 
Procedure, and Settling Defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(1)(G) of 
the Federal Rules of Civil Procedure,'' the United States must give 
Settling Defendants 10 calendar days' notice before divulging the 
material in any legal proceeding (other than a grand jury proceeding).

XII. Retention of Jurisdiction

    The Court retains jurisdiction to enable any party to this Final 
Judgment to apply to the Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. Enforcement of Final Judgment

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including the right to seek an order 
of contempt from the Court. Settling Defendants agree that in a civil 
contempt action, a motion to show cause, or a similar action brought by 
the United States relating to an alleged violation of this Final 
Judgment, the United States may establish a violation of this Final 
Judgment and the appropriateness of a remedy therefor by a 
preponderance of the evidence, and Settling Defendants waive any 
argument that a different standard of proof should apply.
    B. This Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore the 
competition the United States alleges was harmed by the challenged 
conduct. Settling Defendants agree that they may be held in contempt 
of, and that the Court may enforce, any provision of this Final 
Judgment that, as interpreted by the Court in light of these 
procompetitive principles and applying ordinary tools of 
interpretation, is stated specifically and in reasonable detail, 
whether or not it is clear and unambiguous on its face. In any such 
interpretation, the terms of this Final Judgment should not be 
construed against either party as the drafter.
    C. In an enforcement proceeding in which the Court finds that any 
Settling Defendant has violated this Final Judgment, the United States 
may apply to the Court for an extension of this Final Judgment, 
together with other relief that may be appropriate. In connection with 
a successful effort by the United States to enforce this Final Judgment 
against a Settling Defendant, whether litigated or resolved before 
litigation, that Settling Defendant agrees to reimburse the United 
States for the fees and expenses of its attorneys, as well as all other 
costs including experts' fees, incurred in connection with that effort 
to enforce this Final Judgment, including in the investigation of the 
potential violation.
    D. For a period of four years following the expiration of this 
Final Judgment, if the United States has evidence that a Settling 
Defendant violated this Final Judgment before it expired, the United 
States may file an action against that Settling Defendant in this Court 
requesting that the Court order: (1) Settling Defendant to comply with 
the terms of this Final Judgment for an additional term of at least 
four years following the filing of the enforcement action; (2) all 
appropriate contempt remedies; (3) additional relief needed to ensure 
the Settling Defendant complies with the terms of this Final Judgment; 
and (4) fees or expenses as called for by this Section XIII.

XIV. Expiration of Final Judgment

    Unless the Court grants an extension, this Final Judgment will 
expire seven years from the date of its entry, except that after three 
years from the date of its entry, this Final Judgment may be terminated 
upon notice by the United States to the Court and Settling Defendants 
that continuation of this Final Judgment is no longer necessary or in 
the public interest. Provided, however, that the obligations under 
Section X will continue as long as one or more of the escrow accounts 
created under Section X remain open.

XV. Reservation of Rights

    The Final Judgment terminates only the claims expressly stated in 
the Amended Complaint. The Final Judgment does not in any way affect 
any other charges or claims filed by the United States subsequent to 
the commencement of this action, including any charges or claims 
relating to Growers, integrated Poultry feed, hatcheries, Poultry 
products, the transportation of Poultry and Poultry products, and the 
sale of Poultry and Poultry products.

XVI. Notice

    For purposes of this Final Judgment, any notice or other 
communication required to be filed with or provided to the United 
States must be sent to the address set forth below (or such other 
address as the United States may specify in writing to any Settling 
Defendant): Chief, Civil Conduct Task Force, U.S. Department of 
Justice, Antitrust Division, 450 Fifth Street, Washington, DC 20530, 
[email protected].

XVII. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The 
Settling Defendants have complied with the requirements of the 
Antitrust Procedures and Penalties Act, 15 U.S.C. 16, including by 
making available to the public copies of this Final Judgment and the 
Competitive Impact Statement, public comments thereon, and any response 
to comments by the United States. Based upon the record before the 
Court, which includes the Competitive Impact Statement and, if 
applicable, any comments and response to comments filed with the

[[Page 34057]]

Court, entry of this Final Judgment is in the public interest.
Date:------------------------------------------------------------------
[Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16]
United States District Judge-------------------------------------------

Exhibit 1

[Version for Management and Human Resources Staff]
[Letterhead of Settling Defendant]
[Name and Address of Antitrust Compliance Officer]
Dear [XX]:

    I am providing you this letter to make sure you know about a court 
order recently entered by a federal judge in [jurisdiction]. This order 
applies to [Settling Defendant's] Human Resources Staff and Management 
as defined in Section II (Definitions) of the attached Final Judgment, 
including you, so it is important that you understand the obligations 
it imposes on us. [CEO or President Name] has asked me to let each of 
you know that s/he expects you to take these obligations seriously and 
abide by them.
    Under the order, we are largely prohibited from communicating with 
other poultry processors, whether directly or indirectly (such as 
through a consulting agency) about poultry processing plant worker 
compensation--pay or benefits. This means you may not discuss with any 
poultry processor or employee of a poultry processor any non-public 
information about our plant workers' wages, salaries, and benefits, and 
you may not ask any poultry processor or employee of a poultry 
processor for any non-public information about their plant workers' 
wages, salaries, and benefits. In addition, we are largely prohibited 
from sending any non-public information about our processing plant 
workers' wages and benefits to any third party, such as a consulting 
agency. There are only limited exceptions to these prohibitions, which 
are outlined in Section V (Conduct Not Prohibited) of the Final 
Judgment.
    A copy of the court order is attached. Please read it carefully and 
familiarize yourself with its terms. The order, rather than the above 
description, is controlling. If you have any questions about the order 
or how it affects your activities, please contact me.

Thank you for your cooperation.
Sincerely,
[Settling Defendant's Antitrust Compliance Officer]
* * * * *
[Version for Consulting Firms and temporary employment agencies]
[Letterhead of Settling Defendant]
[Name and Address of Antitrust Compliance Officer]
Dear [XX]:

    I am providing you this letter to make sure you know about a court 
order recently entered by a federal judge in [jurisdiction]. This order 
applies to [Settling Defendant's] Consulting Firms as defined in 
Section II (Definitions) of the attached Final Judgment and temporary 
employment agencies, including your agency, so it is important that you 
understand the obligations it imposes on us. [CEO or President Name] 
has asked me to let each of you know that s/he expects you to take 
these obligations seriously and abide by them.
    Under the order, we are largely prohibited from communicating with 
other poultry processors, whether directly or indirectly (such as 
through a Consulting Firm or temporary employment agency, including 
your agency) about poultry processing plant worker compensation--pay or 
benefits. This means you may not disclose to us any non-public 
information about another poultry processor's plant workers' wages, 
salaries, and benefits, and you may not provide any non-public 
information about our poultry plant workers' wages, salaries, and 
benefits to another poultry processor. In addition, we are largely 
prohibited from sending any non-public information about our processing 
plant workers' wages and benefits to any third party, such as a 
Consulting Firm or temporary employment agency, including your agency. 
There are only limited exceptions to these prohibitions, which are 
outlined in Section V (Conduct Not Prohibited) of the Final Judgment.
    A copy of the court order is attached. Please read it carefully and 
familiarize yourself with its terms. The order, rather than the above 
description, is controlling. If you have any questions about the order 
or how it affects your activities, please contact me.

Thank you for your cooperation.
Sincerely,
[Settling Defendant's Antitrust Compliance Officer]

United States District Court for the District of Maryland

    United States Of America, Plaintiff, v. Cargill Meat Solutions 
Corporation, et al., Defendants.
Civil Action No.: 22-cv-1821
(Gallagher, J.)

Competitive Impact Statement

    In accordance with the Antitrust Procedures and Penalties Act, 15 
U.S.C. 16(b)-(h) (the ``Tunney Act''), the United States of America 
files this Competitive Impact Statement related to the proposed Final 
Judgment as to Defendants George's, Inc. and George's Foods, LLC 
(collectively, ``Settling Defendants'').

I. Nature and Purpose of the Proceeding

    On July 25, 2022, the United States filed a civil Complaint against 
Cargill Meat Solutions Corp. and Cargill, Inc. (``Cargill''), Wayne 
Farms, LLC (``Wayne''), Sanderson Farms, Inc. (``Sanderson''), Webber, 
Meng, Sahl and Company, Inc., d/b/a WMS & Company, Inc. (``WMS'') and 
G. Jonathan Meng (``Meng''). The Complaint alleged that those 
defendants, together with another data consultant and other poultry 
processors that combined controlled over 90% of poultry processing jobs 
nationwide, conspired from 2000 or before to the present to assist 
their competitors in making compensation decisions, to exchange current 
and future, disaggregated, and identifiable compensation information, 
and to facilitate this anticompetitive agreement. These conspirators 
collaborated on decisions about poultry plant worker compensation, 
including through the direct exchange of compensation information. This 
conspiracy suppressed competition in the nationwide and local labor 
markets for poultry processing. Their agreement distorted the 
competitive process, disrupted the competitive mechanism for setting 
wages and benefits, and harmed a generation of poultry processing plant 
workers by unfairly suppressing their compensation.
    With the Complaint, the United States also filed two proposed Final 
Judgments, one with respect to Cargill, Wayne, and Sanderson and one 
with respect to WMS and Meng (Dkt. Nos. 2 & 3), to settle this lawsuit 
as to those five defendants. The Tunney Act review process for those 
settlements is ongoing.
    On May 17, 2023, the United States filed an Amended Complaint 
alleging that beginning in 2005 or before, Settling Defendants also 
participated in the conspiracy to exchange information about wages and 
benefits for poultry processing plant workers and collaborate with 
their competitors on compensation decisions. The Amended Complaint does 
not contain additional causes of action or requests for relief.
    The Amended Complaint alleges that, from 2005 or before to the 
present, the Settling Defendants and their poultry processing and 
consultant co-conspirators exchanged compensation information through 
the dissemination of survey reports in which they shared current and 
future, detailed, and

[[Page 34058]]

identifiable plant-level and job-level compensation information for 
poultry processing plant workers. The shared information allowed 
poultry processors to determine the wages and benefits their 
competitors were paying--and planning to pay--for specific job 
categories at specific plants.
    The Amended Complaint further alleges that the Settling Defendants 
and their co-conspirators met in person at annual meetings. From at 
least 2005 to 2018, Settling Defendants attended meetings with other 
poultry processors during which they and the consultant co-conspirators 
facilitated, supervised, and participated in the exchange of 
confidential, competitively sensitive information about poultry plant 
workers.
    The Settling Defendants' and their co-conspirators' collaboration 
on compensation decisions and exchange of competitively sensitive 
compensation information extended beyond the shared survey reports and 
in-person annual meetings. As alleged in the Amended Complaint, from 
2005 or before to the present, the Settling Defendants and their co-
conspirators repeatedly contacted each other to seek and provide advice 
and assistance on compensation decisions, including by sharing further 
non-public information regarding each other's wages and benefits. This 
demonstrates a clear agreement between competitors to ask for help with 
compensation decisions and to provide such help to others upon request.
    In sum, this conspiracy, from at least 2005 to the present, 
permitted the Settling Defendants and their co-conspirators to 
collaborate with and assist their competitors in making decisions about 
worker compensation, including wages and benefits, and to exchange 
information about current and future compensation plans. Through this 
conspiracy, the Settling Defendants artificially suppressed 
compensation for poultry processing workers.
    The Complaint and the Amended Complaint also include a claim 
alleging that Defendants Sanderson and Wayne acted deceptively in the 
manner in which they compensated poultry growers in violation of 
Section 202(a) of the Packers and Stockyards Act, 1921, as amended and 
supplemented, 7 U.S.C. 192(a). The Settling Defendants are not 
defendants as to this claim.
    At the time the Amended Complaint was filed, the United States also 
filed a proposed Final Judgment and Stipulation and Order with respect 
to the Settling Defendants, which is designed to remedy the 
anticompetitive effects resulting from the harm alleged in the Amended 
Complaint.
    The proposed Final Judgment for the Settling Defendants, explained 
more fully below, requires the Settling Defendants to:
    a. end their agreement to collaborate with and assist in making 
compensation decisions for poultry processing workers and their 
anticompetitive exchange of compensation information with other poultry 
processors;
    b. submit to a monitor (determined by the United States in its sole 
discretion) for a term of seven years, who will examine the Settling 
Defendants' compliance with both the terms of the proposed Final 
Judgment and U.S. federal antitrust law generally, across their entire 
poultry businesses; and
    c. provide significant and meaningful restitution to the poultry 
processing workers harmed by their anticompetitive conduct, who should 
have received competitive compensation for their valuable, difficult, 
and dangerous labor.
    The proposed Final Judgment for the Settling Defendants also 
prohibits them from retaliating against any employee or third party for 
disclosing information to the monitor, an antitrust enforcement agency, 
or a legislature, and includes other terms discussed below.
    The term of the proposed Final Judgment reflects the significant 
and voluntary cooperation that Settling Defendants provided in the 
United States' investigation into the conduct described in the 
Complaint, for which the United States is grateful.
    The Stipulation and Order for the Settling Defendants requires them 
to abide by and comply with the provisions of the proposed Final 
Judgment until it is entered by the Court or until the time for all 
appeals of any Court ruling declining entry of the proposed Final 
Judgment has expired.
    The United States has stipulated with the Settling Defendants that 
the proposed Final Judgment may be entered after compliance with the 
Tunney Act. Entry of the proposed Final Judgment will terminate this 
action as to the Settling Defendants, except that the Court will retain 
jurisdiction to construe, modify, or enforce the provisions of the 
proposed Final Judgment and to punish violations thereof.

II. Description of Events Giving Rise to the Alleged Violation

A. The Settling Defendants' Anticompetitive Agreement To Collaborate on 
Compensation, Including Through Their Anticompetitive Exchange of 
Compensation Information

    The Amended Complaint alleges that the Settling Defendants agreed 
to collaborate with and assist each other and their co-conspirators in 
making decisions about wages and benefits for their poultry processing 
plant workers, exchanged competitively sensitive information, and 
facilitated the exchange of each other's competitively sensitive 
information. This agreement includes over a decade of discussions about 
current and future compensation plans and exchanges of compensation 
information between and among the Settling Defendants and their co-
conspirators, who collectively held market power over local and the 
nationwide markets for poultry plant workers. This conspiracy, while 
including detailed exchanges of information about current and future 
wage and benefit policies and amounts, went well beyond the sharing of 
information and included individual processor-to-processor consultation 
and advice-giving on decisions that were competitively sensitive and 
should have been made independently.
    From 2005 or earlier to the present, the Settling Defendants and 
their co-conspirators collaborated on compensation decisions, including 
by discussing, giving advice, and sharing with each other their 
competitively sensitive compensation information--rather than each 
individual firm making its own decisions regarding poultry processing 
plant worker compensation. This collaboration related to compensation 
topics such as current wages and benefits, planned and contemplated 
future wage raises, and changes to benefits, at a nationwide level, at 
a regional level, and at the individual plant or individual job 
category level. The Settling Defendants and their co-conspirators 
engaged in such collaborations via correspondence and at annual in-
person meetings, at which they explicitly discussed poultry processing 
plant worker compensation, and to which they brought competitively 
sensitive compensation information.
    As part of their collaboration, the Settling Defendants and their 
co-conspirators exchanged confidential, current and future, 
disaggregated, and identifiable compensation information related to 
poultry processing workers with each other, both directly and

[[Page 34059]]

through facilitation by data consultant co-conspirators, from at least 
2005 to the present. Their exchange of information through these 
consultants included an annual survey designed and controlled by the 
Settling Defendants and their co-conspirators. The survey compiled and 
disseminated information to competitors about current compensation and 
planned or contemplated changes in plant worker wages and salaries. The 
survey reported compensation and benefits data for standardized job 
categories at the Settling Defendants' and their co-conspirators' 
individual processing plants.
    From their information exchanges, the Settling Defendants knew how, 
and how much, their competitors were compensating their poultry 
processing plant workers at both a nationwide and a local level.

B. The Competitive Effects of the Conduct

    The Amended Complaint alleges that the Settling Defendants' and 
their co-conspirators' agreement to collaborate on compensation 
decisions, including through the anticompetitive exchange of 
compensation information, distorted the competitive mechanism of local 
and nationwide markets for poultry processing plant labor. By doing so, 
this conspiracy harmed a generation of poultry processing plant workers 
by artificially suppressing their wages and benefits for decades.
    Poultry processors are distinguishable from other kinds of 
employers from the perspective of poultry processing plant workers. 
Many poultry processing plant jobs are dangerous and require physical 
stamina and tolerance of unpleasant conditions. Poultry processing 
workers also develop common skills or industry-specific knowledge in 
poultry processing work, making such workers most valuable to other 
poultry processing plants. Additionally, many poultry processing plant 
workers face constraints that reduce the number of jobs and employers 
available to them, limiting the number of competitors for their labor. 
For example, workers who cannot speak, read, or write English or 
Spanish can still perform poultry processing plant line work. 
Similarly, workers with criminal records, probation status, or lack of 
high school or college education are often able to work at poultry 
processing plants even when other jobs are not available to them. 
Finally, many poultry processing plants are located in rural areas, in 
which workers often have fewer job alternatives--especially for full-
time, year-round work--as compared to workers in other areas. Thus, 
other jobs are not reasonable substitutes for poultry processing plant 
jobs.
    In local poultry processing labor markets, defined by the commuting 
distance between workers' homes and poultry processing plants, the 
Settling Defendants and their co-conspirators control more than 80% of 
poultry processing jobs--and in some areas, likely 100%--and thus 
collectively have market power in those local markets. The Settling 
Defendants and their co-conspirators also together control over 90% of 
poultry processing jobs nationwide, giving them market power in the 
nationwide labor market for poultry processing plant work.
    The Settling Defendants' agreement to collaborate on compensation 
decisions and accompanying exchange of information related to 
compensation, which was anticompetitive even standing alone, distorted 
the normal wage-setting and benefits-setting mechanisms in the 
processor plant worker labor market, thereby harming the competitive 
process. Because the collaboration and the shared compensation 
information facilitated by the consultant co-conspirators allowed the 
Settling Defendants and their co-conspirators to understand more 
precisely what their competitors were paying, or were planning to pay, 
for processing plant worker compensation, they were able to pay less 
compensation than they otherwise would have in a competitive labor 
market. In contrast, the Settling Defendants' workers lacked any 
comparable information, a clear asymmetry in the market.
    In sum, the Settling Defendants' anticompetitive agreement to 
collaborate on compensation decisions, exchange of compensation 
information, and facilitation of such (alongside the facilitation of 
this conduct by the consultant co-conspirators) suppressed compensation 
in the local submarkets and the nationwide market for poultry 
processing plant workers to the detriment of hundreds of thousands of 
processing plant workers, who were financially harmed by such conduct.

III. Explanation of the Proposed Final Judgment

    The relief required by the proposed Final Judgments will remedy the 
harm to competition alleged in the Amended Complaint.

A. Prohibited Conduct

    Section IV of the Final Judgment prevents the Settling Defendants 
from continuing their collaboration and information-sharing with 
competing poultry processors about poultry processing worker 
compensation. Paragraphs IV.A and B prohibit Settling Defendants' 
employees in management positions or any positions related to 
compensation from directly or indirectly participating in meetings or 
gatherings related to compensation for poultry processing workers, 
communicating with any poultry processor about competitively sensitive 
information related to poultry processing compensation, or facilitating 
or encouraging such communications; entering into, attempting to enter 
into, maintaining, or enforcing any agreement with any poultry 
processor about compensation for poultry processing workers; or using 
any such information about another poultry processor's compensation for 
poultry processing workers. Accordingly, under the proposed Final 
Judgment, the Settling Defendants may not collaborate on wages and 
benefits for their workers or share confidential wage and benefit 
information with any poultry processor not owned or operated by 
Settling Defendants, and may not provide confidential wage and benefit 
information to any consultants that produce reports regarding 
compensation for poultry processing workers, among other prohibited 
activities.
    To ensure that poultry plant workers and third parties are not 
punished by the Settling Defendants for raising antitrust or other 
concerns, Paragraph IV.D. of the proposed Final Judgment prohibits the 
Settling Defendants from retaliating against any employee or third 
party for disclosing information to the monitor, a government antitrust 
agency, or a government legislature.

B. Monitor

    Section VI of the proposed Final Judgment provides that the Court 
will appoint a monitor, selected by the United States in its sole 
discretion, who will have the power and authority to investigate and 
report on the Settling Defendants' compliance with the terms of the 
Final Judgment and the Stipulation and Order. In addition, the monitor 
will have the power and authority to investigate and report on the 
Settling Defendants' compliance with the U.S. federal antitrust laws. 
When investigating and reporting on the Settling Defendants' compliance 
with the U.S. federal antitrust laws, the monitor may examine all 
aspects of the Settling Defendants' poultry businesses, including 
poultry processing, poultry processing workers, growers, integrated 
poultry feed, hatcheries, transportation of poultry and poultry 
products, and the sale of poultry and poultry processing products.

[[Page 34060]]

    The monitor will not have any responsibility or obligation for the 
operation of the Settling Defendants' businesses. The monitor will 
serve at the Settling Defendants' expense, on such terms and conditions 
as the United States approves in its sole discretion. The monitor will 
have the authority to take reasonable steps as, in the United States' 
view, may be necessary to accomplish the monitor's duties and the 
Settling Defendants must assist the monitor. The monitor will provide 
periodic reports to the United States and will serve for a term of up 
to seven years.

C. Restitution

    The Settling Defendants have inflicted financial harm on the 
hundreds of thousands of poultry plant workers who have labored for 
them and their co-conspirators during the term of the conspiracy 
alleged in the Amended Complaint. These workers perform jobs that are 
physically demanding, involve high risk of injury, and require 
tolerance of unpleasant working conditions, in exchange for wages and 
benefits from the Settling Defendants and their co-conspirators. 
Because of the conspiracy, those wages and benefits were likely less 
than they would have been in a free and competitive labor market. For 
this reason, Section X of the proposed Final Judgment includes a 
requirement that the Settling Defendants pay restitution to workers 
harmed by the Settling Defendants' conduct.
    The Settling Defendants may satisfy the restitution requirement in 
the proposed Final Judgment in one of two ways. In an ongoing private 
antitrust suit brought by a class of nationwide poultry processing 
workers in this Court, Jien v. Perdue Farms, Inc., No. 1:19-cv-2521 (D. 
Md.), which involves allegations and claims similar to those in the 
United States' Amended Complaint, the Settling Defendants negotiated a 
settlement with the plaintiff class for $5.8 million. If the Jien Court 
grants final approval to the Settling Defendants' Jien settlement, the 
disbursement process approved by the Jien Court of the Jien settlements 
satisfies the Settling Defendants' restitution obligation under Section 
X of the proposed Final Judgment.
    Section X of the proposed Final Judgment also sets forth an 
alternative method by which the Settling Defendants may satisfy their 
restitution obligations. Under Paragraph X.A. of the proposed Final 
Judgment, the Settling Defendants must create an escrow account and 
contribute to that account 10% of the amount of their Jien settlement. 
Under Paragraphs X.C. and X.D. of the proposed Final Judgment, should 
the Jien Court not grant final approval of the Settling Defendants' 
Jien settlement, the Settling Defendants must transfer to that escrow 
account the entire amount of their Jien settlement, so that the account 
would contain the full Jien settlement amount plus the 10% initially 
required. The United States would then disburse this fund, minus the 
cost of administration, to the poultry processing plant workers.

D. Required Conduct, Compliance, and Inspection

    The proposed Final Judgment sets forth various provisions to ensure 
the Settling Defendants' compliance with the proposed Final Judgment.
    Paragraph VII.A. of the proposed Final Judgment requires the 
Settling Defendants to appoint an Antitrust Compliance Officer within 
10 days of the Final Judgment's entry. Under Paragraph VII.C. of the 
proposed Final Judgment, the Antitrust Compliance Officer must furnish 
copies of this Competitive Impact Statement, the Final Judgment, and a 
notice approved by the United States explaining the obligations of the 
Final Judgment to the Settling Defendants' management and all employees 
responsible for evaluating or setting compensation for poultry 
processing workers, among others. The Antitrust Compliance Officer must 
also obtain from each recipient a certification that he or she has read 
and agreed to abide by the terms of the Final Judgment, and must 
maintain a record of all certifications received. Recipients must also 
certify that they are not aware of any violation of the Final Judgment 
or any violation of federal antitrust law. Additionally, the Antitrust 
Compliance Officer must annually brief each person required to receive 
a copy of the Amended Complaint, Final Judgment and this Competitive 
Impact Statement on the meaning and requirements of the Final Judgment 
and the antitrust laws. The Antitrust Compliance Officer must also 
annually communicate to all employees that any employee may disclose, 
without reprisal, information concerning any potential violation of the 
Final Judgment or the antitrust laws.
    Paragraph VII.D. of the proposed Final Judgment imposes similar 
notice provisions on the Settling Defendants to ensure that any poultry 
processor or consulting firm they contract with related to poultry 
processing compensation also has notice of the Amended Complaint, Final 
Judgment, and Competitive Impact Statement.

E. Other Provisions

    For a period of seven years following the date of entry of the 
Final Judgment, the Settling Defendants must certify annually to the 
United States that they have complied with the provisions of the Final 
Judgment. Additionally, upon learning of any violation or potential 
violation of the terms and conditions of the Final Judgment, the 
Settling Defendants, within 30 days, must file with the United States a 
statement describing the violation or potential violation, and must 
promptly terminate or modify the activity.
    The proposed Final Judgment requires the Settling Defendants to 
provide full, truthful, and continuing cooperation to the United States 
in any investigation or litigation relating to the sharing of 
compensation information among poultry processors in violation of 
Section 1 of the Sherman Act, as amended, 15 U.S.C. 1. This cooperation 
provision requires the Settling Defendants to use their best efforts to 
effectuate interviews, depositions, and sworn testimony with their 
current and former employees, officers, directors, and agents and to 
produce documents, data, and information upon request. The Settling 
Defendants' obligation to cooperate lasts for the full term of the 
proposed Final Judgment or until the conclusion of all investigations 
and litigations, including appeals, related to sharing poultry 
processing worker compensation information. Subject to this full, 
truthful, and continuing cooperation, the Settling Defendants are 
discharged from any civil or criminal claim by the United States 
arising from the sharing of compensation information among poultry 
processors, provided that the information-sharing occurred before the 
date of the filing of the Amended Complaint and does not include an 
agreement to fix prices or wages or to divide or allocate markets.
    To ensure compliance with the Final Judgment, the proposed Final 
Judgment requires the Settling Defendants to grant the United States 
access, upon reasonable notice, to the Settling Defendants' records and 
documents relating to matters contained in the Final Judgment. Upon 
request, the Settling Defendants must also make their employees 
available for interviews or depositions, answer interrogatories, and 
prepare written reports relating to matters contained in the Final 
Judgment.
    The proposed Final Judgment also contains provisions designed to 
make enforcement of the Final Judgment as effective as possible. The 
proposed Final Judgment provides that the United

[[Page 34061]]

States retains and reserves all rights to enforce the Final Judgment, 
including the right to seek an order of contempt from the Court. Under 
the terms of these provisions, the Settling Defendants have agreed that 
in any civil contempt action, any motion to show cause, or any similar 
action brought by the United States regarding an alleged violation of 
the Final Judgment, the United States may establish the violation and 
the appropriateness of any remedy by a preponderance of the evidence 
and that the Settling Defendants have waived any argument that a 
different standard of proof should apply. This provision aligns the 
standard for compliance with the Final Judgment with the standard of 
proof that applies to the underlying offense that the Final Judgment 
addresses.
    The proposed Final Judgment contains provisions that clarify its 
interpretation. The proposed Final Judgment is intended to remedy the 
loss of competition the United States alleges occurred because of the 
Settling Defendants' conduct. The Settling Defendants agree that they 
will abide by the proposed Final Judgment and that they may be held in 
contempt of the Court for failing to comply with any provision of the 
proposed Final Judgment that is stated specifically and in reasonable 
detail, as interpreted in light of this procompetitive purpose.
    The proposed Final Judgment provides that if the Court finds in an 
enforcement proceeding that a Settling Defendant has violated the Final 
Judgment, the United States may apply to the Court for an extension of 
the Final Judgment, together with such other relief as may be 
appropriate. In addition, to compensate American taxpayers for any 
costs associated with investigating and enforcing violations of the 
Final Judgment, in any successful effort by the United States to 
enforce the Final Judgment against a Settling Defendant, whether 
litigated or resolved before litigation, the Settling Defendant must 
reimburse the United States for attorneys' fees, experts' fees, and 
other costs incurred in connection with that effort to enforce this 
Final Judgment, including the investigation of the potential violation.
    The proposed Final Judgment states that the United States may file 
an action against a Settling Defendant for violating the Final Judgment 
for up to four years after the Final Judgment has expired or been 
terminated. This provision is meant to address circumstances such as 
when evidence that a violation of the Final Judgment occurred during 
the term of the Final Judgment is not discovered until after the Final 
Judgment has expired or been terminated or when there is not sufficient 
time for the United States to complete an investigation of an alleged 
violation until after the Final Judgment has expired or been 
terminated. This provision, therefore, makes clear that, for four years 
after the Final Judgment has expired or been terminated, the United 
States may still challenge a violation that occurred during the term of 
the Final Judgment.
    Finally, the proposed Final Judgment provides that it will expire 
seven years from the date of its entry, except that after three years 
from the date of its entry, the Final Judgment may be terminated upon 
notice by the United States to the Court and the Settling Defendants 
that continuation of the Final Judgment is no longer necessary or in 
the public interest.
    This length of term reflects important cooperation by the Settling 
Defendants with the United States' investigation and litigation. 
Settling Defendants provided significant documents and information to 
the United States over a lengthy period and on a voluntary basis, which 
advanced the investigation in meaningful ways. The United States is 
grateful for this cooperation.

IV. Remedies Available to Potential Private Plaintiffs

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment neither impairs 
nor assists the bringing of any private antitrust damage action. Under 
the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the 
proposed Final Judgment has no prima facie effect in any subsequent 
private lawsuit that may be brought against the Settling Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Settling Defendants have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the Tunney Act, provided that the United States 
has not withdrawn its consent. The Tunney Act conditions entry upon the 
Court's determination that the proposed Final Judgment is in the public 
interest.
    The Tunney Act provides a period of at least 60 days preceding the 
effective date of a proposed Final Judgment within which any person may 
submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment on the proposed Final 
Judgment should do so within 60 days of the date of publication of this 
Competitive Impact Statement in the Federal Register, or the last date 
of publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the U.S. Department of Justice, which remains 
free to withdraw its consent to the proposed Final Judgment at any time 
before the Court's entry of the Final Judgment. The comments and the 
response of the United States will be filed with the Court. In 
addition, the comments and the United States' responses will be 
published in the Federal Register unless the Court agrees that the 
United States instead may publish them on the U.S. Department of 
Justice, Antitrust Division's internet website.
    Written comments should be submitted in English to: Chief, Civil 
Conduct Task Force, Antitrust Division, United States Department of 
Justice, 450 Fifth St. NW, Suite 8600, Washington, DC 20530, 
[email protected].
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    As an alternative to the proposed Final Judgment, the United States 
considered a full trial on the merits against the Settling Defendants. 
The United States could have commenced contested litigation and brought 
the case to trial, seeking relief including an injunction against the 
collaboration on compensation decisions, sharing of compensation 
information, and facilitation of this conduct, as well as the 
imposition of a monitor. The United States is satisfied, however, that 
the relief required by the proposed Final Judgment will remedy the 
anticompetitive effects alleged in the Amended Complaint against the 
Settling Defendants, preserving competition in the poultry processing 
plant labor markets and in the poultry processing industry at large, 
given the relief secured, including the poultry-business-wide monitor. 
Thus, the proposed Final Judgment achieves all or substantially all of 
the relief the United States would

[[Page 34062]]

have obtained through litigation against the Settling Defendants but 
avoids the time, expense, and uncertainty of a full trial on the 
merits.

VII. Standard of Review Under The Tunney Act for the Proposed Final 
Judgment

    Under the Clayton Act and Tunney Act, proposed Final Judgments, or 
``consent decrees,'' in antitrust cases brought by the United States 
are subject to a 60-day comment period, after which the Court must 
determine whether entry of a proposed Final Judgment ``is in the public 
interest.'' 15 U.S.C. 16(e)(1). In making that determination, the 
Court, in accordance with the statute as amended in 2004, is required 
to consider:
    (A) the competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.
    15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory 
factors, the Court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v. 
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) 
(explaining that the ``court's inquiry is limited'' in Tunney Act 
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 
U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a 
court's review of a proposed Final Judgment is limited and only 
inquires ``into whether the government's determination that the 
proposed remedies will cure the antitrust violations alleged in the 
complaint was reasonable, and whether the mechanisms to enforce the 
final judgment are clear and manageable'').
    As the U.S. Court of Appeals for the District of Columbia Circuit 
has held, under the Tunney Act, a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations in the government's complaint, whether a proposed Final 
Judgment is sufficiently clear, whether its enforcement mechanisms are 
sufficient, and whether it may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by a proposed Final Judgment, a court may not ``make de 
novo determination of facts and issues.'' United States v. W. Elec. 
Co., 993 F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); 
see also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 
152 F. Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 
F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Instead, ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust decree must be left, in the 
first instance, to the discretion of the Attorney General.'' W. Elec. 
Co., 993 F.2d at 1577 (quotation marks omitted). ``The court should 
also bear in mind the flexibility of the public interest inquiry: the 
court's function is not to determine whether the resulting array of 
rights and liabilities is the one that will best serve society, but 
only to confirm that the resulting settlement is within the reaches of 
the public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks 
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232 
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding 
requirements would ``have enormous practical consequences for the 
government's ability to negotiate future settlements,'' contrary to 
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was 
not intended to create a disincentive to the use of the consent 
decree.'' Id.
    The United States' predictions about the efficacy of the remedy are 
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 
1461 (recognizing courts should give ``due respect to the Justice 
Department's . . . view of the nature of its case''); United States v. 
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In 
evaluating objections to settlement agreements under the Tunney Act, a 
court must be mindful that [t]he government need not prove that the 
settlements will perfectly remedy the alleged antitrust harms[;] it 
need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' (internal 
citations omitted)); United States v. Republic Servs., Inc., 723 F. 
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to 
which the government's proposed remedy is accorded''); United States v. 
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case.''). The ultimate 
question is whether ``the remedies [obtained by the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.' '' Microsoft, 56 F.3d at 1461 
(quoting W. Elec. Co., 900 F.2d at 309).
    Moreover, the Court's role under the Tunney Act is limited to 
reviewing the remedy in relationship to the violations that the United 
States has alleged in its Amended Complaint, and does not authorize the 
Court to ``construct [its] own hypothetical case and then evaluate the 
decree against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. 
Airways, 38 F. Supp. 3d at 75 (noting that the court must simply 
determine whether there is a factual foundation for the government's 
decisions such that its conclusions regarding the proposed settlements 
are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he 
`public interest' is not to be measured by comparing the violations 
alleged in the complaint against those the court believes could have, 
or even should have, been alleged''). Because the ``court's authority 
to review the decree depends entirely on the government's exercising 
its prosecutorial discretion by bringing a case in the first place,'' 
it follows that ``the court is only authorized to review the decree 
itself,'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Microsoft, 56 
F.3d at 1459-60.
    In its 2004 amendments to the Tunney Act, Congress made clear its 
intent to preserve the practical benefits of using judgments proposed 
by the United States in antitrust enforcement, Public Law 108-237 Sec.  
221, and added the unambiguous instruction that ``[n]othing in this 
section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d 
at 76 (indicating that a court is not required to hold an evidentiary 
hearing or to permit intervenors as part of its review under the Tunney 
Act). This language explicitly wrote into the statute what Congress 
intended when it first enacted the Tunney Act in 1974. As Senator 
Tunney explained: ``[t]he court is nowhere compelled to go to trial or 
to

[[Page 34063]]

engage in extended proceedings which might have the effect of vitiating 
the benefits of prompt and less costly settlement through the consent 
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Sen. 
Tunney). ``A court can make its public interest determination based on 
the competitive impact statement and response to public comments 
alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F. 
Supp. 2d at 17).

    Dated: May 17, 2023.

Respectfully submitted,
For Plaintiff United States of America
-----------------------------------------------------------------------
Kathleen Simpson Kiernan,
U.S. Department of Justice, Antitrust Division, Civil Conduct Task 
Force, 450 Fifth Street NW, Suite 8600, Washington, DC 20530, Tel: 
202-353-3100, Fax: 202-616-2441, Email: [email protected].

[FR Doc. 2023-11058 Filed 5-24-23; 8:45 am]
BILLING CODE 4410-11-P

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