Robert P. Lewis, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, authored an article in the Employee Relations Law Journal, titled “Growing Global Efforts to Combat Human Rights Abuses in Supply Chains.”
Following is an excerpt (see below to download the full version in PDF format):
On June 17, 2021, the U.S. Supreme Court issued its opinion in two important business and human rights cases concerning the U.S. Alien Tort Claims Statute (“ATS”). In Nestle USA, Inc. v. Doe I and Cargill, Inc. v. Doe I, plaintiffs asserted claims against Nestlé USA, Inc., the U.S. affiliate of Swiss-based Nestlé (“Nestlé”) and Cargill, Inc. (“Cargill”), alleging that they are liable under the ATS for aiding and abetting forced labor, child slavery and torture from their headquarters in the United States through their commercial relationships with cocoa producers in the Ivory Coast, despite knowing of those producers’ widespread use of child labor. Nestlé and Cargill had appealed the opinion by the U.S. Court of Appeals for the Ninth Circuit holding that that the two U.S. corporations could be held liable under the ATS for aiding and abetting human rights violations abroad by virtue of their corporate conduct in the United States. The Supreme Court reversed the Ninth Circuit, holding that the ATS does not apply extraterritorially where all of the conduct that the defendants allegedly aided and abetted occurred outside the United States and the only alleged U.S. domestic conduct was the defendants’ general corporate activity in the United States. The Court noted that, to plead facts sufficient to a domestic application of the ATS, a plaintiff must allege more domestic conduct than just general corporate activity.
In the absence of those types of factual allegations, lawsuits against U.S. corporations seeking redress for human rights violations occurring overseas will likely be prohibited and victims of human rights abuses arising from exploitative employment conditions will need to find friendlier jurisdiction to seek redress. Nonetheless, the Nestlé USA and Cargill cases highlight increased international attention to human rights for workers. In that context, multinational employers, particularly those with international supply chains, need to be mindful of, and take steps to minimize, potential legal exposure arising from abusive labor practices and conditions outside the United States that are recognized by many nations as forms of modern slavery.
