Randy Black a contractor to Case Farms in North Carolina has filed a federal lawsuit claiming that the company concealed information concerning the tournament system. Black alleges that Case Farms controls all aspects of grow-out including selection of broiler strains, nutrition and that the tournament system allows the Company to manipulate remuneration.
To state that growers bear risks related to their operations is a misrepresentation of the contract system. Fluctuation in the cost of feed and market prices are borne by integrators. Differences in performance criteria that determine payment relate to the construction of houses including insulation, equipment and above all management of ventilation and other aspects of grow-out that are directly responsibilities of the contractor following Company guidance provided by servicepersons. At the end of the day both parties benefit from attaining high levels of performance.
The lawsuit obviously relates to the proposed new rules under the Packers and Stockyards Act intended to create greater transparency in contracts and the elimination of the tournament system. If successful the case law established will lead to an avalanche of claims.