By Jacob Bunge and Brent Kendall

The chief executive of Pilgrim's Pride Corp. pleaded not guilty to federal charges that he conspired to fix chicken prices, while a judge barred him from contacting poultry buyers allegedly victimized by the scheme.

Jayson Penn, CEO of the second-largest U.S. chicken processor, entered the plea in a federal court in Colorado on Thursday. He and three other U.S. poultry industry executives were indicted Wednesday by the Justice Department for allegedly coordinating chicken pricing-strategies in negotiations with restaurants and other buyers.

"He plans to fight these charges and expects to be fully vindicated," Michael Tubach, a lawyer for Mr. Penn, said at Thursday's hearing.

Justice Department lawyers on Wednesday alleged that four executives of Pilgrim's and Claxton Poultry Farms, a Georgia chicken supplier, for years coordinated prices, talking by phone and relaying competitors' pricing to one another via text message. The government's charges referenced other unnamed executives and chicken suppliers, suggesting pricing information was shared more broadly beyond the alleged discussions between Pilgrim's and Claxton.

Pilgrim's, majority-owned by Brazilian meat conglomerate JBS SA, said in a statement late Wednesday that the company is continuing to cooperate with the Justice Department investigation. "The company is committed to high ethical standards, governance, and free and open competition that benefits both customers and consumers," the company said. A Claxton spokesman declined to comment.

U.S. Magistrate Judge Kristen Mix said at Thursday's hearing that Mr. Penn can remain free on personal recognizance, and can travel. She imposed conditions on his actions while he awaits trial, most notably that he can't contact employees of eight companies that are customers of Pilgrim's and are alleged victims of price-fixing by Mr. Penn and co-conspirators. The Justice Department hasn't named the customers publicly.

Mr. Tubach argued that restricting Mr. Penn's contacts with customers would make it difficult for him to do his job. Judge Mix said she sympathized with Mr. Penn's predicament and didn't want to fully prevent him from being able to work, but she also said courts routinely bar defendants from contacting parties who could be witnesses in the case.

"I suggest that Mr. Penn, as a successful CEO, knows very well how to delegate," Judge Mix said.

The judge also said Mr. Penn couldn't contact price negotiators at other chicken suppliers who allegedly participated in the price fixing.

Two other poultry industry executives indicted by the Justice Department-- Roger Austin, a former Pilgrim's vice president, and Scott Brady, a Claxton vice president--also pleaded not guilty Thursday. Mikell Fries, Claxton's president and another alleged co-conspirator, didn't enter a plea and has another hearing scheduled for next week.

Lawyers for the defendants weren't immediately available for comment.

Pilgrim's shares settled 1.3% higher Thursday, after dropping 12% Wednesday following the indictment. Claxton is privately owned.

Write to Jacob Bunge at and Brent Kendall at