Cargill, Sanderson, Wayne Farms and WMS: The Pay Survey With Next Year’s Raises

In the Cargill, Sanderson, Wayne Farms and WMS wage antitrust case, the Justice Department proposed $84.8 million in payments to poultry plant workers over alleged coordination of wages and benefits. The complaint alleged a pattern spanning at least 20 years. It follows compensation information from surveys and private meetings into decisions about raises and salary ranges. For anyone who handled those surveys or set a plant’s pay, the revealing question is what happened after a competitor’s numbers arrived.

The department filed its civil case in Maryland on July 25, 2022. Cargill Meat Solutions and its parent, Cargill Inc., Sanderson Farms and Wayne Farms were the processor defendants. Webber, Meng, Sahl and Company, known as WMS, was the data consultant. Its president was also a defendant.

WMS Surveys Reached From the Corporate Budget to the Plant Floor

The alleged poultry worker wage information exchange covered both hourly and salaried jobs, current compensation and future plans. According to the government’s complaint, processors could learn what rivals paid everyone from live hangers and shoulder cutters to plant mechanics. The information extended from national compensation budgets down to individual plants.

That detail mattered because poultry pay decisions happen at different levels. A processor may set its labor budget and health benefits centrally while adjusting hourly rates for a particular plant. Base wages can vary by job, with additions for seniority, skill, productivity or shift. A national average cannot tell a compensation manager everything a table of nearby plants can.

The complaint alleged that the wider group of participating processors employed more than 90% of poultry processing plant workers nationwide. These were businesses competing to recruit and retain workers, including workers whose skills were particularly valuable at another poultry plant.

WMS allegedly collected survey responses, tabulated results and presented them at annual meetings. The processors controlled the information categories and membership rules through a steering committee and participant votes. The consultant ran the survey. The competing employers helped decide what it would reveal.

The complaint describes attendees arriving with compensation data in large binders, and later on laptops, ready for confidential roundtable discussions. Some exchanges also happened directly between corporate compensation staff or competing plant managers. A survey file was one part of a continuing conversation about pay.

Anonymous Columns Could Still Identify a Competitor

The complaint alleged that plant details could reveal which processor stood behind supposedly anonymous survey results. In one exchange, a processor asked WMS how many locations a rival had included in the hourly survey. WMS supplied the count. Matching that count to the plant entries could identify the rival’s data.

The information’s value depended on how closely it described an actual competitor. Removing a company’s name from the table did little if the recipient could work out whose plants it contained.

The complaint also alleged that participants worked to standardize job categories so they could compare compensation across companies. A plant safety manager at one business and a complex safety manager at another might be the same job under different titles. Agreeing on the categories made the pay comparisons easier to use.

Next Year’s Raises Were Part of the Exchange

The WMS survey allegedly showed planned salary merit increases and gave participants a way to compare forecasts with what competitors actually did:

The complaint says employers wanted to know how much their competitors intended to raise salaries and when. It alleged that sharing those plans could discourage an employer from departing from its forecast to compete harder for workers.

Workers did not have the same view. According to the complaint, they relied on word of mouth or their own searches to find out what other plants paid. The employers allegedly shared a detailed account of the choices available to workers while the workers had to discover those choices for themselves.

What Happened After the Competitor’s Numbers Arrived

The Justice Department alleged that shared compensation data affected actual pay decisions, including Cargill’s salary ranges and Wayne’s effort to pay near the industry midpoint.

For Cargill, the complaint described salary bands sent to local plant managers to guide wage decisions:

For Wayne, the government alleged that access to rival compensation information helped the company target the midpoint more precisely, suppressing increases that might otherwise have occurred.

In another example the complaint describes, one employer considering a raise asked competitors about their plans. A rival responded that it had no plans to increase pay. The employer that asked then left hourly wages unchanged that year, despite typically raising them in the surrounding years, according to the complaint.

Those are the connections a compensation employee may recognize: an initial salary range, an incoming survey or competitor email, and a different decision afterward. The draft budget and the final pay instruction can show how information moved from a rival’s business into the employer’s own choices.

The Consultant Raised a Concern, and the Group Kept Going

The complaint alleged that processors chose to distribute identifiable hourly wage data even after the WMS president questioned the change. In August 2012, the steering committee wanted to expand the survey’s detail. The consultant raised an antitrust concern, and committee participants asked him not to highlight it to the other processors:

The complaint says he followed that instruction and circulated the proposed change without calling attention to his concern. The requested detail survived. The objection disappeared from the message.

According to the complaint, earlier that year Sanderson’s human resources manager had emailed other participants and WMS to say that its executives had decided to end participation in the WMS Survey Group after receiving legal advice. The complaint presents these emails as evidence of how participants responded to legal concerns.

The Proposed Worker Remedy Reached Beyond a Payment

The July 2022 proposal combined compensation for harmed workers with restrictions on how the processors and their consultant could exchange information.

Under the proposed terms described by the Justice Department, Cargill, Sanderson and Wayne would stop sharing competitively sensitive information about poultry plant workers’ compensation. A court-appointed monitor would oversee compliance for ten years. The monitor’s authority would extend across the poultry businesses, from hatcheries to sales.

The proposal also would allow the Antitrust Division to inspect facilities and interview employees. WMS and its president faced a broader restriction: a ban on surveys or other services that facilitated sharing competitively sensitive information in any industry.

Their practical reach went from the consultant distributing the tables to the processors making the pay decisions.

Growers Faced a Different Compensation Problem

The grower allegations concerned Sanderson and Wayne’s tournament system for paying farmers who raised their chickens. The Justice Department alleged deceptive practices under the Packers and Stockyards Act.

In this part of the poultry business, processors supply young birds and feed, and growers raise the birds to the processors’ specifications. Growers may invest substantially in barns or improvements to meet those requirements. Their compensation depends on the contract and on how efficiently their flock converts the supplied inputs into bird weight.

The complaint alleged that growers performing above the group average received bonuses while those below it faced deductions. Yet Sanderson and Wayne controlled the major inputs, including chicks and feed. The contracts allegedly omitted information about differences in those inputs, such as breed, sex, breeder flock age and health impairments.

The processor controlled the birds and feed, then judged the grower against other growers whose inputs could differ. The government’s allegation was that growers lacked the information needed to assess that comparison and the financial risk they were taking.

The proposed grower terms would prevent Sanderson and Wayne from reducing base payments because of relative performance, while still allowing incentives and bonuses. They also called for expanded contract disclosures.

A Similar Data Problem on the Selling Side

Agri Stats supplies a useful parallel because it puts the same question to the information used to sell meat. In the government’s amended complaint against the data company, prosecutors alleged that detailed exchanges of pricing, cost, production and profitability information helped competing processors coordinate.

That case alleged that processors used the information to raise prices or restrain supply. The WMS case concerned information allegedly used to suppress worker compensation. Both accounts make the recipient’s use of the data central: who could identify the competitor, what the report revealed, and which business decision followed.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

If you have compensation-sharing evidence, our whistleblower experts work with you to identify a potential reward route. Where the facts also involve false claims for government money, we examine that connection with you.

You Know How the Pay Decision Changed

If you handled compensation surveys, attended the meetings or saw a raise change after contact with a rival, talk with our whistleblower experts about what happened. We build your strongest whistleblower case around your knowledge of those decisions and bring in antitrust whistleblower lawyers who understand employer data exchanges. We stay beside you as partners throughout the case.