Tyson Foods (TSN) and Perdue Farms are under investigation from the Department of Labor following a media report that migrant children were working in their facilities. Reuters reports that the investigation was to determine whether migrant children were used to clean slaughterhouses, after another report from The New York Times showed children working overnight shifts for contractors at the companies' plants. Both companies have told Yahoo Finance they have not received notice of a probe. Yahoo Finance Legal Reporter Alexis Keenan discusses what has been reported and how each company has responded to the allegations.
Video Transcript
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JARED BLIKRE: Poultry giant Tyson Foods and Perdue Farms, they're finding themselves under federal investigation coming after a report that some of their contractors are employing migrant children. Here with the details is Yahoo finance's Alexis Keenan. Alexis.
ALEXIS KEENAN: Hi, Jared. Yes, this is the US Labor Department reportedly investigating the two poultry producers on complaints that they had or have migrant children working in their meat processing facilities in Virginia, those two separate companies, the two separate facilities. These are sanitizing workers reportedly. And they are working during overnight shifts. That's the way that this complaint is lodged. Now, both Perdue Farms and Tyson, they both tell Yahoo Finance that they've received no notice of a probe.
But the two companies responding to our questions really differently. Perdue for their part telling Yahoo Finance that the workers at issue are employed by a third-party sanitation company in Tennessee, that's based in Tennessee, called Fayette Industrial. And they say this, "The most important thing is ensuring underage labor has no place in business. We are conducting a third-party audit of our procedures." And they also say they plan to cooperate fully with any government inquiry.
Now, Tyson for its part said that because the company had not received a notice of any inquiry that they therefore cannot comment at all. Now together, Perdue and Tyson, they produce about one-third of all of the poultry that is sold in the United States. So those are two absolute giants here in this industry. And this all came to a head after the New York Times magazine last week issued a report of a 14-year-old migrant worker who was working in reportedly Perdue facility and suffered a very severe arm injury.
So we're still waiting to hear what the department of labor has to say and how extensive this probe is. Jared.
JULIE HYMAN: I'll take it from here, Alexis. What kind of fines are we talking about potentially if it does-- if it is found that there's a liability here?
ALEXIS KEENAN: Yeah, Julie. So one place to look is back in February. That's the most recent case where the department of labor did find a company called Packers Sanitation Services. And they're headquartered in Wisconsin. After an investigation by the department, they found that the company had employed 102 minors in meat processing facilities. They were fined, get this, just $15,000 approximately for each violation, so each worker that was working there illegally. All totaled, that fine comes to roughly $1.5 million.
So when you're looking at a company like, let's say, Tyson Foods that's a public company here, Perdue being private, but revenue for the last 12 months for Tyson, $53 billion, a drop in the bucket here in terms of these fines. So, you know, that's probably why you're not seeing the stock move too much on this news.
JARED BLIKRE: Makes sense. And we thank you for the report. Yahoo Finance's Alexis Keenan.
