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Email Content: Poultry Industry News, Comments and more by Simon M. Shane

DOJ Sues Koch Foods over Contracts


The Department of Justice has filed a civil lawsuit against Koch Foods alleging that legally questionable penalties were imposed on contractors transferring to other integrators.  The Department of Justice considers that current and past actions by Koch Foods violate federal antitrust laws.  According to the DOJ complaint, Koch Foods imposes exit penalties on farmers who transfer to other integrators in contravention of the Packers and Stockyards Act and the Sherman Antitrust Act.


The Department of Justice has requested that Koch Foods enter into a consent decree requiring the company to “cease demanding, collecting or accepting termination payments”.  The Company should be “enjoined from any retaliation, intimidation or harassment against the independent contractors involved in termination payment disputes”.  The DOJ will require details of any termination payment obligations to be included in contract agreements.


The DOJ considers that imposing exit penalties including threats of lawsuits, serves as a deterrent to farmers in their exercise of their rights to enter into agreements with other integrators.

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