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The complex calculus of food-label claims

October 14, 2014, 9:24 PM UTC
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Kyle Bean for Fortune

On Monday, Perdue Farms announced that it had agreed to stop using the phrase “humanely raised” on labels for its Harvestland chicken products. In return, the Humane Society of the United States agreed to drop two lawsuits against the company.

Hours later, Kroger (KR) said it had reached an agreement with the group Compassion Over Killing, which had filed a similar lawsuit against the grocer alleging that the labels on some of its chicken products were deceptive. The brand in question is Simple Truth. The labels boasted that the chickens were “raised in a humane environment.” Kroger’s supplier of its store-brand Simple Truth chickens is none other than Perdue Farms.

Two settlements involving the same producer don’t make a trend, but Perdue’s decision to lay down its arms might induce some companies to perform more cost-benefit analysis on their label claims, at least claims about animal welfare. That’s not an easy calculation. Demand for humanely raised meat and poultry is rising. But the costs of actually raising animals humanely are high—certainly much higher than just slapping a label onto a box and continuing to do business as usual. But if the costs of defending lawsuits (especially costs associated with a deteriorating public image) run too high, it might be best for companies that plan to stick with conventional methods to just stop making claims that are so easily assailed.

Further complicating matters: the standards for what constitutes “humane” treatment are squishy at best, which is why these disputes so often end up in court.

The courts are packed with similar lawsuits over labels claiming that foods are, among other things, “natural,” or “sustainably grown.” While food companies must meet specific federal standards to claim that products are organic, the lack of such standards for other claims leaves a lot of room for dispute. Are they false advertising, or mere puffery?

As for industry self-regulation, Temple Grandin, perhaps the most famous expert on the humane treatment of livestock, told Salon that the poultry industry’s own standards are essentially useless: “The National Chicken Council Animal Welfare audit has a scoring system that is so lax that it allows plants or farms with really bad practices to pass.”

The Humane Society alleged that Perdue’s labels amounted to false advertising because Perdue raises chickens under continuous low-level lighting, which promotes growth but disturbs sleep patterns. Chickens also are kept for long periods on cramped trucks and in extreme temperatures, the Humane Society alleged.

Perdue has all along disputed allegations that its practices are inhumane, and the company on Monday reiterated its stance even as it was agreeing to drop the label claims.

Gary Truitt of the blog Hoosier Ag and a longtime critic of the Humane Society of the United States, wrote without elaborating: “This is another reason HSUS must be stopped. This, in my opinion, is intimidation plain and simple.” The headline on his post: “Another Corporate Cave-In.”

The Humane Society (a national animal-rights lobbying organization that is not related to your local Humane Society of lost kitties and pups) filed its first lawsuit against Perdue in 2010. The second followed last year.

The lawsuit against Kroger was filed in federal court in California earlier this year.

This story has been updated. A quote has been updated to reflect Gary Truitt’s current statement.