The Chicken Tycoons vs. the Antitrust Hawks

With the loss of the jury trial, Biden’s plan to tackle competition in the meat industry appeared to have failed. Yet criminal trials were only part of the strategy. The Justice Department could still file civil cases against the poultry processors. Less than three weeks after the bid-rigging lawsuit ended in defeat, the department’s Antitrust Division sued the poultry processors again. This civil suit focused on another type of illegal anti-competitive behavior: wage suppression.

Every year, usually in May, representatives from about two dozen poultry processing companies, which together employed 90 percent of the industry’s workers (a total of about 240,000 in 2020), flew to a secret meeting. They called themselves the Poultry Industry Survey Group. In 2000, they hired a small Pennsylvania consulting firm – Webber, Meng, Sahl and Company – to conduct an annual detailed study of each company’s current and future wage rates. The company’s president, Jonathan Meng, later said in a statement to the court that he would give a PowerPoint presentation with big overviews, then leave and the executives would meet behind closed doors, sometimes for another full day. Each company paid Meng $995 for the service, a fee that rose to $1,100 in 2018.

According to Meng, over the years he became concerned that his presence was intended as a cover for illegal anti-competitive behavior among the group’s members; at times he warned conference organizers that they were violating antitrust laws. But he didn’t quit the job. Fearing legal action, the group’s members named him their “Antitrust Guidon” in 2017, using a military term for a flag that flew when a commander was present, and asked him to ensure that no one at the conference would break the law violate. Despite the precautionary measure, some participants’ corporate lawyers have forced them to abandon the procedure. Meng’s 2019 presentation attempted gallows humor. Paraphrasing on a slide listing the recently abandoned firms, Shakespeare wrote, “The first thing we do, let’s kill all the lawyers.”

Later that year, following a private investigation, attorneys filed a class action lawsuit, Jien, et al. v. Perdue Farms, Inc., et al., against Meng’s company and members of the Poultry Industry Survey Group, including all but one of the companies involved in the separate price-fixing case, on behalf of workers who alleged that the conferences amounted to a conspiracy against wage suppression. As part of a settlement, Meng outlined his role during the conferences in vivid detail in the statement to the court. In the document, Meng maintains his innocence and portrays his company as an “unwitting instrument” of the processors’ misconduct. (He could not be reached for comment for this article.)

The Justice Department apparently wasn’t convinced that Meng’s firm was an “unconscious instrument” because it named him as a defendant in a civil complaint filed in July 2022 against Cargill, Sanderson Farms and Wayne Farms. (The complaint also included 18 unnamed co-conspirators of poultry processors.) The government relied heavily on Meng’s statement to the court, claiming that the processors “artificially suppressed compensation” and “educated a generation of workers in the poultry processing plant denied fair wages. in a free and competitive labor market.”