Iowa lawsuits against Tyson on hold as company faces potential SEC probe

By: - March 4, 2021 4:16 pm

Tyson Foods is facing new challenges in its effort to dispose of lawsuits accusing the company of failing to protect workers from injury and death due to COVID-19. (Photo provided by Tyson Fresh Meats)

Tyson Foods is facing new legal challenges in court, but the company is making headway in attempting to move wrongful-death cases tied to the pandemic from state court to federal court.

The meat and poultry giant has been hit with several lawsuits from the families of Iowa workers who died after allegedly contracting the coronavirus in the company’s plants. Now, the company is facing a new set of allegations related to its conduct with shareholders.

A lawsuit seeking class-action status on behalf of shareholders was filed recently in New York, and it echoes claims made in December by Scott Stringer, the New York City comptroller.

Stringer has asked the U.S. Securities and Exchange Commission to launch an investigation into health and safety disclosures that Tyson made in its annual report to investors in late 2020.

His written request cites a report by the non-profit Food Environment Reporting Network that concluded Tyson had triple the number of COVID-19 cases — more than 11,000 — and twice as many deaths as any other American meatpacking company last year. Stringer accused the company of misrepresenting its response to the pandemic, a charge Tyson has denied.

The comptroller is also alleging that Tyson’s statement to investors, made after Joe Biden was elected president, fails to acknowledge “the risks posed by the outcome of the election” and the resulting likelihood of stricter enforcement of workplace safety laws under the Biden administration.

At a town hall meeting in May 2020, Biden discussed workplace safety in meatpacking plants and said, “No worker’s life is worth me getting a cheaper hamburger. No worker’s life is worth that. That’s what the hell’s happened here.”

At the same event, Biden added, “Whether it’s cattle, whether it’s beef, whether it’s pigs, whether it’s chicken, they’re moving down that line faster and faster and faster to increase the profit rate. People are getting sicker. People are getting hurt. The very thing we should be doing now is making sure these people are protected.”

In contesting lawsuits filed by the families of deceased workers, Tyson has cited the words and actions of Biden’s predecessor, Donald Trump, in attempting to have those cases heard in federal court.

The company’s lawyers argue Tyson has been operating “under the supervision of the U.S. Department of Homeland Security and the U.S. Department of Agriculture” during the pandemic, and that it has “worked hand-in-hand with federal officials from the time of the declaration of a national emergency.”

Tyson’s claim is that because it has been helping the government produce food needed “for the national defense,” and because President Trump ordered meat processing plants to continue operating during the pandemic, the federal courts are the proper forum for resolving each lawsuit.

In January, U.S. District Judge Linda Reade ruled otherwise, saying President Trump’s designation of meatpacking plants as “critical infrastructure” did not insulate Tyson Foods from state-court claims of wrongful death tied to the pandemic.

Reade stated that while Tyson cited Trump’s April 28, 2020, executive order blocking the closure of meat plants, the offenses the company was alleged to have committed took place weeks before.

As to the larger and more important issue of Tyson being designated part of the nation’s “critical infrastructure” by the president, Reade noted the lawsuit did not seek damages for Tyson’s failure to shut down the facility, but instead alleged executives and supervisors at the company acted with gross negligence in disregarding the danger of the pandemic and the risks associated with an outbreak.

Reade ruled those alleged actions are “not connected or associated in any manner with the directions of a federal officer.”

Tyson, however, succeeded in persuading the 8th Circuit Court of Appeals to hear its appeal of that decision – effectively putting all of the litigation on hold, at least for a few months.

The Iowa litigants include:

  • The family of Michael Everhard of western Iowa, which sued Tyson late last year, alleging gross negligence. They claimed Everhard was forced to work in a confined space at the company’s Storm Lake plant without proper safety precautions in place. Everhard, who was 65, died in June.
  • The family of the late Isidro Fernandez, which sued Tyson last year, alleging Fernandez was exposed to the coronavirus at the company’s Waterloo plant and later died. The lawsuit alleges that in mid-April, plant manager Tom Hart organized a cash-buy-in, winner-take-all, betting pool for supervisors and managers so they could wager how many plant employees would test positive for COVID-19.
  • The family of the late Pedro Cano Rodriguez, which sued Tyson last fall, alleging the company failed to adequately protect its workers from COVID-19. Rodriguez, who died on April 14 at the age of 51, was an employee of Tyson’s pork packing plant in Columbus Junction.
  • The families of Sedika Buljic, Honario Garcia and Jose Luis Ayala, Jr., which sued Tyson last July, alleging the three former employees of the Waterloo plant spread the virus to them after contracting it at work. The three workers later died of the virus, according to the lawsuit.

In Texas, several lawsuits have been filed against Tyson, including one by a group of 12 employees at the company’s plant in Center, Texas, and one by 41 employees of Tyson’s Amarillo plant.

Last year, after the Iowa Capital Dispatch reported allegations that Tyson supervisors had privately wagered money on the number of workers who would be sickened by the deadly virus, Tyson hired former U.S. Attorney General Eric Holder to investigate the claim. Four weeks later, Tyson fired seven plant managers in Waterloo based on the results of that investigation — although the company did not disclose the details of its findings.

Tyson is one of the world’s largest food companies with four major business segments: beef, pork, chicken, and prepared foods. According to SEC filings, it is the top meat and poultry processor in the United States, with 139,000 employees, 120,000 of whom are in the United States.

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Clark Kauffman
Clark Kauffman

Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.