Tyson Foods (NYSE:TSN) and Perdue Farms are currently under investigation by the U.S. Department of Labor. The probe follows reports that migrant children were allegedly employed to clean their meat-processing plants during nighttime hours. This investigation was prompted by a report published in the New York Times Magazine last week.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
The magazine cited instances where children as young as 14 were tasked with cleaning duties at these plants and subsequently experienced serious injuries. Federal law prohibits minors from engaging in such hazardous work.
The department is investigating the plants of both companies in Virginia. Both companies have stated that they were unaware of children working in their plants but have expressed their intention to cooperate with the investigation. They also said that sanitation companies are hired to handle the cleaning at several of their facilities.
Nonetheless, the Department of Labor has the authority to deem Tyson and Perdue responsible for their contractors’ labor practices, citing the concept of joint employment.
Surge in Child Labor
The regulator aims to combat the increasing occurrence of child labor in the country. Some well-known companies have been exposed for their involvement in these unlawful activities.
In late 2022, Packers Sanitation Services, a food safety sanitation provider, was discovered to have employed 31 children aged 13 to 17. These minors were assigned to work for major meat industry players like Cargill and JBS USA in Minnesota and Nebraska. Several of the children reportedly experienced chemical burns and other injuries.
The department’s Wage and Hour Division reported a 44% rise in children employed in violation of federal law during the period from October 1, 2022, to July 20, 2023. The rise can be attributed to heightened enforcement of child labor laws.
Is TSN a Buy or Sell?
Tyson’s investments to increase its capacity and modernize the facilities by increasing automation processes are encouraging. However, the inflationary pressure continues to take a toll and keeps analysts sidelined on TSN stock.
Based on one Buy, four Hold, and three Sell ratings, Tyson has a Hold consensus rating. The average stock price target of $51.57 implies a 0.88% upside potential from the current level. Shares of the company have declined about 17.5% so far in 2023.
