Perdue settles class action suit

Poultry producer to pay employees $10 million

August 08, 2002|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

Perdue Farms Inc., the Salisbury-based poultry producer, has agreed to pay $10 million to settle a 1999 lawsuit that claimed hourly chicken processing employees were cheated out of pension benefits and required to work off the clock.

The settlement of the class action lawsuit, which received preliminary approval yesterday from the U.S. District Court for the District of Delaware, is subject to final approval after notice has been sent to about 60,000 workers eligible to make claims. A final approval hearing is set for October, and workers could receive lost wages early next year, said James M. Finberg, a lawyer representing the employees.

"These are people who worked very hard," Finberg said yesterday. "They are not highly paid jobs. One of our class members said that being paid for this time is the difference between having hamburgers and having peanut butter for dinner."

The settlement follows another multimillion-dollar settlement Perdue reached in May with the U.S. Department of Labor. In that case, Perdue agreed to pay about $10 million in back wages after the government said the company had violated the Fair Labor Standards Act by failing to pay workers for time needed to put on and take off protective clothing needed to perform their jobs.

The December 1999 lawsuit that sparked the most recent settlement made similar allegations. The lawsuit covered Perdue workers in Maryland, Kentucky, Delaware, Virginia, Alabama, Florida, Virginia, West Virginia, North Carolina and South Carolina.

Plaintiffs argued that not paying workers for the time it took to dress and undress in protective gear and to clean equipment at the end of the day violated federal and state wage laws. In addition, the lawsuit claimed that workers were cheated out of pension benefits because they were not given credit for all the time worked.

Perdue Chairman Jim Perdue said the proposed settlement puts to rest a contentious issue.

"In May, we took the initiative to resolve this dispute with the U.S. Department of Labor, and now we are concluding the matter by resolving the private action surrounding this issue," Perdue said in a prepared statement. "In resolving this matter I had one goal: `Do the right thing that is fair for all our associates.' This agreement does just that."

Some workers could receive payment under both settlements for different types of claims, lawyers said.

How much employees will receive under the latest settlement will vary, depending partly on how long they worked at Perdue and the number of claimants, said Christine E. Webber, an attorney for the workers. Webber estimated that someone working two years at Perdue could receive $400 to $500 in lost wages.

The $10 million also will cover fees for the lawyers, who took the case on a contingency basis, meaning they are only paid if the case settles in the plaintiffs' favor. The lawyers will ask the court for 25 percent of the settlement, Finberg said.

Webber said the main plaintiffs in the case said they are pleased with the proposed settlement.

"The workers will be happy to know they are going to get paid for all the time they already put in," Webber said.

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