Nebraska Beef ruling shows courts are willing to crack down on food companies

Dive Brief:

  • The U.S. District Court for the District of Nebraska has sided with the U.S. Department of Justice in its dispute with Nebraska Beef that began in October 2015, Meatingplace reported.
  • The DOJ made a breach of contract claim against Nebraska Beef after the company refused to comply with several terms of a settlement agreement the parties agreed to in August 2015. That settlement included an agreed-upon $200,000 civil penalty and the beginning of a back pay claims process.
  • That agreement settled the DOJ's investigation into whether the company discriminated against work-authorized immigrants. When Nebraska Beef did not hold up its end of the agreement, DOJ sued to enforce it.

Dive Insight:

Workplace discrimination and employee lawsuits have had mixed outcomes over the years. But recent decisions show that the courts will not shy away from cracking down on food and beverage companies if they are suspected of discrimination or mistreatment of employees.

Tyson endured a similar experience when the courts ruled earlier this year that the company had to pay nearly $3 billion in back pay. Employees joined a class action lawsuit that claimed Tyson withheld pay for the amount of time donning and removing safety gear before and after their factory shifts.

Tyson's angle was that because each employee spent a different amount of time performing these activities, they shouldn't be allowed to sue the company as a group. While this time around the effort failed, Tyson based its argument on a 2011 case against Wal-Mart regarding gender discrimination and the Supreme Court's denial of their ability to file a class action.

Nebraska Beef could potentially appeal its case to a higher court, which could result in a dissolution of the agreement or simply prolong its ultimate enforcement. But having already agreed to a settlement and then with the courts ruling to enforce that settlement, a different outcome seems unlikely at this point.

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Filed Under: Corporate Meat / Protein