Settlement: Delaware chicken catchers recoup lost wages

The U.S. Department of Labor reached a $1.2 million settlement with a North Carolina staffing company who officials say engaged in wage theft with hundreds of Delaware poultry workers, the federal agency announced Tuesday.

Marshville, North Carolina-based Unicon provides chicken catchers and van drivers to poultry farms in Delaware as well as eight other states and Washington, D.C. Company officials violated federal labor laws by failing to pay employees $600,000 in wages, according to a settlement document obtained through a Freedom of Information Act request. 

Between February 2013 and February 2015, Unicon officials withheld pay for breaks employees did not take. They also failed to compensate workers for activities that fell outside of the scope of chicken catching, such as transporting poultry workers and cleaning company vans, according to a statement from the labor department. 

The company also did not maintain sufficient time and payroll records, the statement read.

The settlement stipulated that Unicon compensate 838 employees for back wages and give them an additional $600,000 in damages for the breach of contract. 

A total of 255 of those workers were employed in Delaware, sending chickens to plants owned by Mountaire Farms' in Millsboro and Selbyville and by Perdue Farms' in Georgetown and Milford, according to a Department of Labor official.

"They're our chickens but the farms are independently owned. So we contract with Unicon to catch the chickens and bring them to the plant," Perdue spokesman Joe Forsthoffer said.

Chicken catchers round up birds within poultry houses and place them in crates before they are sent on a final journey to meat processing plants.

Another 284 of the impacted employees were based in Unicon's home state of North Carolina. The remainder were spread out in Alabama, Arkansas, Washington, D.C., Georgia, Maryland, South Carolina, Texas and Virginia.

“This agreement goes a long way to ensure that Unicon’s workers are made whole," said Department of Labor Wage and Hour Division Administrator Mark Watson in a statement. 

"It also levels the playing field for other employers in this industry,” he said.

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As part of the settlement, the Wage of Hour Division agrees not to issue a notice of civil money penalty nor bring an action in federal court against Unicon. 

But "Wage and Hour does not waive its right to conduct future investigations," the settlement document stated.

Labor spokeswoman Leni Fortson said it is departmental policy not to disclose the reason investigations are opened. Asked if affected employees were migrant workers, Fortson said "they are Americans.”

Department officials do not know if the employees have obtained attorneys, she said. 

"Unicon further agreed that they will continue to comply with all applicable provisions of the (Fair Labor Standards Act) in the future," Fortson said.

Barry Glass, spokesman for Unicon, declined to answer questions about the settlement. 

He instead emailed a statement, which read the settlement "was to correct inadvertent violations that first came to light in 2014" and "the company continues to be in full compliance with all wage and hour laws."

The "settlement puts to rest any back wage claims asserted by the U.S. Department of Labor, and was entered into as a compromise to avoid the expense and distraction of litigation," Glass said in the statement. 

Fortson referred to the settlement document when asked why the labor department did not pursue an action in federal court.

Echoing Glass's comments, the document states the agreement seeks to "avoid the costs and expenses of litigation and to fully and finally resolve all matters."  

Unicon also goes by the name Wilkes Contract Service, according to court documents from a previous dispute. In addition to supplying poultry workers to farms, the company is a full service trucking company that operates on the East Coast and in the southern United States.

A Unicon worker died in 2014 in Federalsburg, Maryland, after a being struck by a tractor-trailer, according to the federal Occupational Safety and Health Administration.

Delaware's dependence on poultry

The poultry industry is vital to the Delmarva Peninsula's economy and growers produce more than $1 billion worth of product annually, with about 20 percent of the meat shipped overseas.

Delaware produced 252 million broiler chickens in 2016, the 11th highest total among all states, according to the U.S. Department of Agriculture.

Poultry farmers in Delaware for decades have grown the birds in standard, long, windowless chicken houses, which dot the southern parts of the state. When plump, they are rounded up by chicken catchers, such as those employed by Unicon.

Perdue Farms and Mountaire Farms each have significant presences in the state. Mountaire officials did not respond to a request for comment for this story.

In 2010, 21 chicken catchers filed a federal lawsuit in U.S. District Court in Delaware against Mountaire claiming the company did not pay overtime required by law.

The case ended when the parties reached a settlement. 

In 2011, Perdue outsourced 100 chicken catching jobs to Unicon to cut costs, following an industry trend toward outsourcing at the time. The initial change took place at the company’s plants in Milford and Perry, Georgia.

“We take any decision affecting our associates very seriously, but the economics of the situation left us with no other choice,” said Perdue spokesman Luis Luna after the cuts were announced.

Perdue Farms employs about 2,900 workers at two Delaware processing plants. It has contracts with more than 300 Delaware poultry growers, who produce more than 95 million birds for the company.

In March, the $6.5 billion, Maryland-based producer named Randy Day as its new CEO. 

Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.