On Tuesday, Mingxue Guo filed a class-action complaint against Tyson Foods, Inc in the New York Eastern District alleging that the company’s neglectful response to the COVID-19 pandemic caused the value of its publicly traded securities to decrease. The complaint claimed that while Tyson was forced to close facilities following COVID-19 outbreaks, because of the companies’ response to the pandemic, it breached federal securities laws.
The complaint also named executives of Tyson as defendants, including Noel White, Dean Banks, and Stewart Glendinning. According to Tyson’s U.S. Securities and Exchange Commission (SEC) filings, the company was aware of the potential impact of COVID-19 in February 2020. Additionally, the company said in a March 13, 2020 report that the pandemic could disrupt supply chains, production, consumption, and could “depress demand for protein,” and that the companies’ workforce and operations could be limited.
In May on the company’s forms for the second quarter, Tyson reported that it was prioritizing the safety of its employees. However, Tuesday’s complaint reported that in December a New York City Comptroller urged the SEC to investigate Tyson’s failures to follow COVID-19 related guidance based on the company having three times as many cases and twice as many deaths as other meatpacking companies.
The Comptroller’s report said “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.”
News of this request for an investigation reportedly caused shares in Tyson to fall $1.78, down 2.5 percent from the previous price. Guo claimed that he purchased Tyson’s securities “at artificially inflated prices,” and was damaged when the value decreased due to the actions of the company. The complaint suggested that additional support for the claims would come through discovery, but that the allegations were supported by the plaintiff’s investigation, SEC filings, and analyst reports.
The plaintiff is represented by The Rosen Law Firm, the putative class includes anyone who traded Tyson securities between March 13, 2020 and December 15, 2020.
Tyson is also facing multiple lawsuits from employees and family members of employees claiming the company is at fault for allowing its employees to contract COVID-19. Allegations claim that managers forced employees to work and made bets on the numbers of employees who would test positive for COVID-19.
