Tyson Hit With Investor Suit Over Lackluster Virus Response

By Hailey Konnath
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Law360 (February 2, 2021, 11:03 PM EST) -- Tyson Foods Inc. failed to protect its meat plant workers from the COVID-19 pandemic and then lied to investors about its bungled response, which ultimately led to complete shutdowns of some facilities and significantly lowered production, a shareholder told a New York federal court Tuesday.

Tyson is already battling a slew of litigation over coronavirus outbreaks at its plants during the last year, including several wrongful death suits brought by the families of workers who died after contracting the virus. At one Iowa facility, top Tyson officials were suspended after they were accused of organizing a betting pool on how many employees would get sick.

The company knew — or should've known — that COVID-19 was poised to ravage its facilities and still didn't implement sufficient safety protocols, investor Mingxue Guo said in Tuesday's proposed class action. As a result of its failures, the virus tore through its meat plants, many of which had to temporarily shut down, the investor said.

But all the while, Tyson and its top brass misled its investors about the true financial hit the company would take, according to the complaint.

The truth emerged in December, when New York City Comptroller Scott Stringer urged the U.S. Securities and Exchange Commission to investigate Tyson, Mingxue said. Specifically, Stringer claimed the steps Tyson eventually took to protect its employees were "grudging and minimal." At its largest pork plant, Tyson misled its workforce, telling them that "everything is fine," Stringer said. Eventually, more than 1,000 workers tested positive for the virus, some of whom died, he said.

When this news broke, Tyson's stock price fell 2.5% or $1.78 per share to close at $68.25 per share Dec. 15, Mingxue said.

"As a result of defendants' wrongful acts and omissions, and the precipitous decline in the market value of the company's securities, plaintiff and other class members have suffered significant losses and damages," according to the suit.

Mingxue is looking to represent a class of potentially thousands of Tyson investors who purchased stock between March and December 2020. He's alleging violations of the Securities Exchange Act and asked to court to award unspecified damages, court costs and attorney fees.

Also on Tuesday, U.S. Rep. James E. Clyburn, D-S.C., launched an investigation into COVID-19 outbreaks at meatpacking plants nationwide, sending letters to the Occupational Safety and Health Administration, Tyson, Smithfield Foods and JBS USA. Clyburn is chairman of the House's Select Subcommittee on the Coronavirus Crisis.

Clyburn accused OSHA of failing to adequately enforce worker safety laws at meatpacking plants under the Trump administration, a misstep that he says led to preventable infections and deaths.

"It is imperative that the previous administration's shortcomings are swiftly identified and rectified to save lives in the months before coronavirus vaccinations are available for all Americans," Clyburn said in the letter to OSHA.

Tyson representatives didn't immediately return a request for comment late Tuesday.

The families of deceased meat plant workers Pwar Gay and Camha Thi Vu sued Tyson in May 2020, alleging that at least 4,500 Tyson staff had contracted the virus since the pandemic began. At least 18 workers had died, according to that suit.

In June, the family of a longtime Texas meat factory worker slapped Tyson with a wrongful death suit, claiming that Jose Angel Chavez died in April from complications caused by a case of COVID-19 he contracted at work. According to his wife and three children, Tyson disregarded Chavez's safety by failing to distance workers, provide personal protective equipment such as face masks and gloves, check for symptoms, notify staff of infections or tell them to stay home when ill.

Chavez's family has since pulled the plug on that suit, though it vowed to file a "stronger" version of the case in the future.

Then, in July, a number of worker advocacy groups lodged a complaint with the U.S. Department of Agriculture, claiming Tyson, JBS and their subsidiaries had taken millions of dollars in federal contracts while rolling out a COVID-19 response that puts Black, Latino and Asian meat processing workers at greater risk.

Most recently, the widow of a Tyson meatpacking supervisor sued the company in Pennsylvania state court, alleging that lax safety measures at the Philadelphia plant where her husband worked resulted in his untimely death.

Counsel for Mingxue didn't immediately return requests for comment late Tuesday.

Mingxue is represented by Phillip Kim and Laurence M. Rosen of The Rosen Law Firm PA.

Counsel information for Tyson wasn't immediately available Tuesday.

The case is Mingxue Guo v. Tyson Foods Inc. et al., case number 1:21-cv-00552, in the U.S. District Court for the Eastern District of New York.

--Additional reporting by Matt Fair, Craig Clough, Jon Steingart and Rosie Manins. Editing by Breda Lund.

For a reprint of this article, please contact reprints@law360.com.

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