Author: Paul Goeringer

Over the past few months, two potential class action lawsuits have been filed in South Carolina and Georgia by former poultry growers for Amick Farms and Perdue Farms, claiming that growers are not independent contractors as stated in their contracts but employees.  In the lawsuits, the former growers claim that both companies miscategorized growers and failed to pay growers a minimum wage and overtime.  The cases are Diaz v. Amick Farms, LLC, No. 5:22-CV-01246, and Parker v. Perdue Farms, Inc., No. 5:22-cv-00268-TES.

Class action lawsuits allow the judicial system to manage lawsuits that could potentially be unmanageable. Cases would become unwieldy if each potential class member were to bring a lawsuit.  In class actions, the class members must share common questions of law or fact, with proposed claims or defenses typical for each member.  At the same time, class actions require that the size of the potential class makes it impractical for all the members to join in and that the class representatives can adequately protect the interests of the entire class.

In both lawsuits, the former growers claim that the poultry companies miscategorized the growers as independent contractors and that growers should be treated as employees.  As employees, the growers are entitled to be paid the minimum wage required under federal law.  At the same time, one of the lawsuits argues that the growers are entitled to overtime pay for all work over 40 hours per week.  The growers claim that the tournament system used to compensate growers did not provide a wage above the minimum wage for hours worked by the growers.  Additional claims were filed, but for now, these are the ones we are focusing on.

It will be interesting to watch if these lawsuits are certified as a class action lawsuit and which federal district court will be given jurisdiction over the class action suit.  All this could happen in 2023, and poultry growers should continue to keep an eye on this litigation.

Author: Paul Goeringer

Senior Faculty Specialist

lgoering@umd.edu

Poultry growers may have started to receive settlement forms recently for a broiler grower class action lawsuit settlement.  Defendants involved in the lawsuit include Koch Poultry, Pilgrim’s Pride, Sanderson Farms, Tysons, and Perdue, and several co-conspirators, including Agri Stats, Foster Farms, Mountaire Farms, Wayne Farms, George’s, Inc., Peco Foods, Inc., House of Raeford Farms, Simmons Foods, Keystone Foods, Fieldale Farms Corp., O.K. Industries, Case Foods, Marshall Durbin Companies, Amick Farms, Inc., Mar-Jac Poultry, Inc., Harrison Poultry, Inc., and Claxton Poultry Farms.  At this point, Perdue and Tyson have not agreed to the settlement, but their growers are still included in the settlement process.  Growers might be surprised to receive this form in the mail and may have questions about the case and settlement.  There is a website designed to answer questions about the settlement process (https://www.broilergrowersantitrustsettlement.com/koch-settlement/), which includes many important deadlines for broiler growers.  Answers to many of the important questions growers may have, including how much money each grower will receive and whether additional integrators will, are currently unknown.  

            Originally filed in 2017 in the federal district court for the Eastern District of Oklahoma, the lawsuit alleges that several integrators colluded in the broiler market.  According to the court filings, the plaintiffs alleged that the integrators agreed not to poach growers.  In addition to the no-poaching agreement, the integrators also allegedly used Agri Stats to share detailed data about their operations.  Although this data shared through Agri Stats is anonymous, it is highly detailed, making it possible for companies to distinguish various operations.  This data is also non-public — private data only available to the integrators, according to the court filings.  By sharing this detailed data with Agri Stats, the integrators could collude to lower grower compensation.

            Growers for all these companies will receive settlement forms as potential class members impacted by the lower grower compensation amount due to the alleged collusion.  Growers receiving settlement forms will need to pay attention to certain dates.  The first important date is Sept. 23, 2022, for postmarking requests to be excluded from the settlement. A party always has the right to be excluded from a settlement.  When a party elects, they often have the right to sue for similar claims on their own or do nothing.  To have that opportunity, a grower must opt out by the September 23 deadline.  Second, all claims’ forms must be submitted online or be postmarked by February 6, 2023.  Please check the website at https://www.broilergrowersantitrustsettlement.com/koch-settlement/ for additional information to determine if a grower wants to be part of the settlement or if a grower notice mistakes on the settlement form.  

Goeringer, Paul. “Broiler Grower Settlement Forms Arriving to Growers: Background on the Class Action“. Southern Ag Today 2(38.5). September 16, 2022. Permalink

Right-to-farm laws provide agricultural producers, forestry operations, and aquaculture producers a defense in a nuisance lawsuit under certain circumstances.  A 2022 Supreme Court of Mississippi decision highlights how the right-to-farm defense can protect agricultural operations.  In this case, two producers began using propane cannon scare guns to prevent deer from eating their cotton and soybean crops during summer. The propane cannons created loud noises, and the neighbors’ ensuing nuisance lawsuit tried to prevent the two producers from using the guns. The trial court agreed with the two producers that the state’s right-to-farm law barred the nuisance claim, and the Supreme Court of Mississippi recently upheld the trial court’s ruling in Briggs v. Hughes.

            On appeal, the neighbors argued that the Mississippi legislature did not create blanket protection for operations adding new practices on a farm, and the Court should look at when the practice began to be used.  The Court disagreed with this view of the state’s right-to-farm law.  The Court must only determine if an agricultural operation complies with all applicable state and federal permits and not when a new practice, such as a scare gun, was first used. 

            The Court then turned to the neighbors’ argument that using propane cannons was not a best management practice.  The neighbors argued that expert testimony demonstrated  propane cannons would become less effective over time and that propane cannons could not be a best practice because they are not always practical.  The court disagreed, relying on expert testimony showed the propane cannons were used appropriately for pest control, and the Court upheld the lower court’s finding.

            Importantly, each state’s right-to-farm statute is different in certain details.  With Mississippi’s law, the farm only needed to demonstrate that the operation complied with federal and state permits and that the practice was a best management practice. Here the producers’ use of scare guns adhered to the Mississippi law.  The analysis would have been different in states with different statutory provisions. Operations should pay attention to the language used in right-to-farm laws to ensure they can maintain the defense.

Goeringer, Paul. “How Right-to-Farm Laws Operate to Protect Ag Practices Used by Producers“. Southern Ag Today 2(25.5). June 17, 2022. Permalink