California Laws Are Being Used To Advance Human Rights Claims Based On Global Supply Chain Activities

Author:Mr Stefan Marculewicz, John Kloosterman, Lavanga V. Wijekoon and Michael G. Congiu
Profession:Littler Mendelson
 
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Recent class actions have claimed that companies have violated California consumer fraud and unfair competition laws resulting from alleged forced labor in their global supply chains. These state law claims argue that companies are liable for allegedly misrepresenting in various corporate declarations their efforts to eradicate forced labor from their global supply chains. Plaintiffs have argued that corporate statements referring to international standards, such as the U.N. Guiding Principles on Business and Human Rights (the "UN Guiding Principles") and International Labour Organization (the "ILO") Conventions, contribute to the companies' duties to disclose the use of any forced labor in their supply chains.

The California Class Actions

In August and September of 2015, six class action cases were brought in California federal courts against companies for their purported failure to disclose alleged forced labor in their supply chains based in Thailand and West Africa. Each lawsuit alleges violations of California's consumer protection and unfair competition laws.1

These class action complaints contend that the respective companies failed in their duties to disclose the use of forced labor or the "likelihood of forced labor" in their supply chains. Plaintiffs assert that these duties arose from the companies' superior knowledge of their own supply chains and the companies' representations that they did not tolerate the use of forced labor by their suppliers. The sources of these representations include the companies' supplier codes of conduct, publicly proclaimed corporate business principles, corporate social responsibility reports, disclosures on company websites pursuant to the California Transparency in Supply Chains Act (the "California Supply Chain Act")2 and, in three cases, the industry's public commitments, to which the defendant-companies are signatories.

Attempting to Tie in International Instruments

By referencing these corporate statements as bases for their consumer protection claims, the plaintiffs in these cases have brought to bear a wide range of international instruments on forced labor. For example, the plaintiffs in two of the cases brought against the same company partly based their claims on the company's corporate business principles, which refer to the UN Guiding Principles, which in turn emphasize the corporate responsibility to respect labor rights. The plaintiffs in these cases also reference the company's supplier code of conduct, which sets company expectations on the prohibition of child labor "in accordance with ILO Minimum Age...

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