Tyson Foods Inc. agreed to pay up to $32 million to settle 12-year-old litigation about whether it should pay its hourly poultry-plant workers for the time it takes them to get in and out of their work clothes and gear.
Under the settlement, which was approved by a federal judge in Columbus, Ga., Thursday, Tyson Foods will pay as much as $17.5 million to 16,703 workers, and up to $14.5 million in attorney's fees.
Gary Mickelson, a spokesman for Tyson Foods, said the settlement won't have any material impact on the Springdale, Ark., meat giant's fourth-quarter financial results. As part of the settlement, Tyson Foods isn't admitting any wrongdoing.
"The action was resolved on a satisfactory basis," said Mr. Mickelson.
The lawsuit sprung out of a prolonged dispute about whether hourly line workers in the meatpacking industry should be paid for the time it takes them to suit up for work and to prepare their tools. For years, meatpacking companies didn't pay for that time, arguing that the Fair Labor Standards Act is vague about when such employees clock into work.
Last year, Tyson Foods agreed with the U.S. Labor Department to gradually change its hourly wage practices to give employees credit for the time they prepare for their shifts disassembling chickens. Tyson Foods agreed to begin paying certain line employees for an extra eight to 12 minutes of work.
Under the Labor Department agreement, Tyson Foods by December 2012 will arrange for workers to clock in before dressing for work, and to clock out after their work gear is removed. The change in pay practices outlined by the 2010 Labor Department agreement is expected to involve as many as 38,000 Tyson employees.