TUSCALOOSA, Ala. (CN) – Peco Foods pays its chicken growers on a ranking system that “wrongfully pits growers against each other” and arbitrarily punishes growers for factors beyond their control, a class action claims in Federal Court.
Peco is a vertically integrated poultry business that pays growers to raise its chickens for slaughter. It ranks the growers on a class system based on how modern their chicken houses are, with Class A being the most modern and Class C the least. Higher-ranking growers typically receive higher pay. But growers claim the defendant’s system is arbitrary, and houses that are only a few years old are classified as Class C. Additionally, all growers must compete against each other regardless of their ranking, the lawsuit claims.
Growers claim Peco uses this unfair, deceptive and discriminatory ranking system to “wrongfully manipulate” the prices and “maintain financial dominance over growers,” who withhold criticism for fear of losing their business relationship with Peco, which controls nearly every stage of production from breeding and hatching to slaughtering and processing.
Growers say they have no control over the condition of the birds they get, the type of food and medicine provided, or the time Peco comes to collect its chicks.
Peco’s manipulation of the market violates the Packers and Stockyard Act, the lawsuit claims.
Class growers demand actual and punitive damages. They are represented by Milton Brown Jr.