Tyson Taken to Task: Oklahoma Jury Awards Poultry Growers $7.3 Million

by Yee Huang

April 22, 2010

Earlier this month an Oklahoma jury awarded $7.3 million to current and former poultry growers for fraud, negligence, and violations of a state consumer protection act committed by Tyson Foods, Inc. This verdict is not surprising as Tyson, like other major poultry processors, wields considerable economic clout in its relationship with poultry growers. This imbalanced relationship suggests that the “independent contractor” status of poultry growers that Tyson and other major poultry processors describe is a trick for the companies to disclaim any responsibility for the highly pollutant-concentrated poultry waste, which contaminates waterways around the country.

Like other corporate poultry processors, Tyson relies on a network of poultry growers around the country. The growers enter into a contract with the company, which retains nearly total control of the growers’ poultry operations. Tyson provides the physical materials for the poultry operations—from chicks to feed—and specifies the growing conditions for the chickens. The growers are considered independent contractors, but as the Oklahoman explained, “Tyson’s vertically integrating chicken growing system exerts a lot of influence over their operations.” Many growers say the contracts are inherently unfair and favorable to Tyson, which enjoys substantial economic clout.

From an environmental perspective, what is noticeably missing from Tyson’s “vertically integrated system” is the company’s responsibility for the poultry waste produced by the growers’ poultry operations. I wrote previously about the Oklahoma Attorney General’s suit against Tyson, which sought to hold the company, rather than the growers, responsible for the highly pollutant-concentrated poultry waste under various federal environmental laws as an integrator.

In this lawsuit, the poultry growers alleged several unfair practices, including:

  • Tyson used verbal and financial pressure to persuade growers to borrow hundreds of thousands of dollars to construct modern chicken house facilities;
  • Tyson punished growers who refused to upgrade their facilities by providing them with inferior chicks and feed and paying them less for mature birds;
  • Tyson used a secretive system to calculate payments to growers and refused to allow growers to verify feed delivery weights or the weights of mature birds. Tyson's payment system is based on how efficient growers are in converting the weight of the feed into the weight of the chickens.

Tyson is appealing the verdict, which consisted of $4.8 million in actual damages and $2.5 million in punitive damages. In its news release, the company declared that the jury heard a “tabloid-style rumor mill of mostly fabricated evidence” and that it is “assessing all options… to address this injustice and to prevent it from happening again,” a veiled threat to move its operations elsewhere. In McCurtain County, where the lawsuit was filed, Tyson employs over 1,000 people and estimates that it provides an annual economic benefit of $75 million.

With similar lawsuits to come, Tyson may finally get its comeuppance: play nicely, play fairly, or pay up.

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