Chicken producer Sanderson Farms said today (23 June) that it will pay US$2.6m in compensation to current and former hourly workers.

The company said a Louisiana court has approved the settlement that will see all pending litigation against the company dismissed.

The hourly employees filed a lawsuit against Sanderson, claiming they were entitled to compensation for the time spent walking to and from workstations and "donning and doffing" protective clothing.

"While we are confident our pay practices are and have been legal and appropriate, a United States Supreme Court decision involving other companies created uncertainty regarding whether time spent donning and doffing protective gear, hair nets and smocks is compensable," said Sanderson Farms CFO Mike Cockrell.

"We have always had excellent relationships with our employees, and look forward to continuing that relationship."

The impact of the payment will be seen in the current quarter's results.