The Exclusive Poultry Inc., a poultry processor and supplier in Southern California, has agreed to pay an estimated $3.8 million in penalties and damages after an investigation revealed that the firm employed minors in "dangerous jobs."
According to the Department of Labor (DOL), the company hired children as young as 14 to debone poultry using dangerous tools like sharp knives, and to operate power-driven lifts to move pallets.
Employers slashed the wages of workers who cooperated with DOL investigators
Officials who investigated the matter said minors worked "excessive hours" in violation of federal child labor regulations. Employers later punished workers who cooperated with DOL investigators by reducing their wages.
Investigators also accused employers of refusing to pay required overtime wages to their employees. Instead, they were paid either by piece rate or by straight-time hourly rate even when they worked grueling 50- or 60-hour weeks.
Investigators also discovered that employers failed to maintain required records when they omitted several workers from payroll records.
Jessica Looman, acting head of the DOL's Wage and Hour Division, said The Exclusive Poultry and owner Tony Bran "willfully withheld workers' hard-earned wages, endangered young workers and retaliated against employees to conceal their wrongdoing."
Looman added that the Wage and Hour Division will continue to work at every level of the industry to "prevent employers or retailers from exploiting workers, including children, for profit."
Aside from the nearly $3.8 million in fines, the settlement's terms also require Bran and The Exclusive Poultry to be monitored for the next three years to ensure their compliance.
Employers must also offer the workers, who were fired from The Exclusive Poultry following the investigation, hiring preference before they are allowed to hire more workers.
Bran denies knowing children were employed at the poultry processor
According to the judgment, Bran and The Exclusive Poultry must pay $3.5 million in back wages and damages to affected workers. Out of the total amount, $300,000 will be set aside for punitive damages.
Meanwhile, back wages totaling more than $100,000 will be paid to employees who experienced retaliatory conduct from their employers.
The employers must also pay more than $200,000 in civil penalties assessed by the DOL's division for child labor and willful violations.
Despite the proof that the investigators uncovered, Anthony McClaren, the company's lawyer, claimed that his client was unaware children had been employed at the poultry processor, adding that the $3.8 million agreement with the federal government was "in the best interest of moving forward."
"These were just allegations and the case was in its infancy. We were just beginning to do our own discovery to understand whether or not these allegations were true," insisted McClaren. He added that the company is effectively out of business following the DOL's recent judgment.
The DOL investigation included two poultry plants in the City of Industry and La Puente controlled by Bran. Evidence suggests that Bran had set up "front companies" to employ workers at these plants. The companies include Meza Poultry, Nollus's Poultry, Sullon Poultry Inc. and Valtierra Poultry.
Bran, the companies and the listed owners of the front companies are now subject to a consent judgment that prevents them from violating labor laws, including paying employees less than minimum wage, paying inadequate overtime costs, and allowing children younger than 16 to work too many hours.
Court documents reveal that the investigation was initially launched in 2022 after an adult worker reported unpaid wages to the DOL.
The judgment follows several months after the DOL received a preliminary injunction and temporary restraining order against The Exclusive Poultry, preventing the company from shipping any "hot goods" into commerce and any goods from a location where the department observed child labor.
Through a statement, Marc Pilot, the agency's solicitor of labor in San Francisco, explained that when employers build a business based on wage theft or violations of child labor laws, the goods they produce are considered "illegal contraband that cannot be shipped into commerce."
Pilot added that The Solicitor’s Office will use all tools at its disposal to prevent and stop the shipment of "hot goods" that continue to harm workers and competition in the marketplace.
The Exclusive Poultry, which is based in La Puente, California, supplies goods to supermarkets and food distributors that sell chicken products, such as Aldi, Kroger-owned Ralphs, Grocery Outlet and Sysco Co.
According to Aldi, it has never used The Exclusive Poultry as a supplier. The company said that it has "stringent processes" for identifying suppliers to ensure compliance with legal and regulatory requirements.
Meanwhile, Grocery Outlet also claimed that it has never used The Exclusive Poultry as a supplier. The company also denied using any of the other companies associated with the DOL's investigation.
According to Sysco, the DOL investigation findings of The Exclusive Poultry represent "serious violations of legal and regulatory requirements and are inconsistent with the ethical standards outlined in Sysco’s Supplier Code of Conduct."
Sysco added that it was "evaluating the situation" and would take "appropriate remedial actions" to ensure that all its suppliers uphold company standards on labor and food safety.
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