Tyson Foods faces a proposed class action that alleges investors were harmed financially by the company’s inadequate response to the coronavirus pandemic within its facilities.
The 17-page investor lawsuit, which looks to represent those who bought or otherwise acquired publicly traded Tyson securities between March 13 and December 15, 2020, alleges the defendants issued a number of materially false and misleading statements during that timeframe with regard to the company’s ability to protect employees from contracting the virus.
The suit alleges Tyson made false and/or misleading statements and/or failed to disclose that it “knew, or should have known,” that the highly contagious coronavirus was spreading around the world and that the company lacked sufficient safety protocols to protect employees and, as a result, workers contracted and spread the virus, which harmed production, necessitated the complete shutdown of certain facilities and impacted Tyson’s bottom line.
According to the lawsuit, the alleged materially false and misleading statements disseminated by Tyson date back to a March 2020 financial report in which the company noted as a risk the “rapidly evolving coronavirus (COVID-19) outbreak.” Tyson noted, among other items, that the coronavirus “may disrupt consumption and trade patterns, supply chains, and production processes,” which would materially affect the company’s operations and financial health, the complaint relays.
Per the case, statements made by Tyson from May through November 2020 highlighted, among other facets, the creation of an internal task force to maintain the health and safety of employees; that team member health was a top priority; that face coverings, other protective equipment and social distancing were required; and that the company implemented and continued to implement safety measures at its facilities to protect team members amid the pandemic.
Come December 2020, New York City Comptroller Scott M. Stringer called on the Securities Exchange Commission to open an investigation into Tyson, the suit says. In a letter to the SEC, Stringer laid bare what he claimed to be Tyson’s failures in carrying out its stated coronavirus protection policies, stating, in part:
“Unfortunately, the steps Tyson eventually took to protect employees were grudging and minimal, such as letting workers use bandanas or sleep masks, which function poorly as protective devices. Tyson never moved workers six feet apart throughout the plant, nor did it slow the assembly line so that workers could be socially distanced. The Company did hang plastic sheeting between workers as they continued to work elbow to elbow, even though the Centers for Disease Control and Prevention (‘CDC’) told the industry that plastic sheeting does not work unless workers are at least six feet apart.
As COVID-19 was infecting its employees, Tyson reportedly misled its workforce in its largest pork plant by telling them that ‘everything is fine.’ Eventually over 1000 workers in that plant tested positive, leading to worker deaths, hospitalizations, and plant closure.”
Upon this news, Tyson shares fell 2.5 percent on unusually heavy trading volume, damaging investors, the lawsuit says, alleging the price drop was linked to the defendants’ “wrongful acts and omissions.”
The lawsuit’s filing comes on the heels of the announcement of an investigation by U.S. Rep. James E. Clyburn, D-South Carolina, chairman of the House Select Subcommittee on the Coronavirus Crisis, into COVID-19 outbreaks at meatpacking facilities across the country, an inquiry that reportedly centers on the Occupational Safety and Health Administration (OSHA), Tyson, Smithfield Foods and JBS USA.
ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.