Just Desserts: Child Slavery Suit Against Chocolate Companies Can Go Forward

Defenders of labor rights face an uphill battle addressing the widespread abuses facing workers around the world.  Most industrialized nations have legal protections in place establishing standards for labor conditions, but in many parts of the world this is not the case. In our globalized economy, corporations in industrialized nations take advantage of this reality and set their manufacturing and production operations to those nations, to access relatively inexpensive labor.  In the worst of these cases, workers have no protections whatsoever, and live in slavery. Recently, a United States federal court took a step to hold some of these companies responsible, for being at least complicit in a system supported by slavery, as the court put it in “receiving cocoa at a price that would not be obtainable without employing child slave labor.”

Last month the Ninth Circuit Court of Appeals reversed the decision of a California District Court Judge’s in the case John Doe I, et. al. v. Nestle, S.A., et. al.  In this case, the unnamed plaintiffs allege that a group of corporate defendants in the business of processing cocoa beans were complicit in a system of widespread child slavery that occurred on cocoa plantations in the Republic of Côte d’Ivoire, a nation on the West African coast.   The plaintiffs in the case, identified only as John Doe’s I–VI, allege that they were victimized by these companies and the decisions those companies made in pursuing profits, up to and including condoning the use of child slave labor on the plantations of their cocoa suppliers.

The defendants in this case, Nestle, Cargill, and Archer Daniels Midland, are each large multinational corporations and are among the world’s largest manufacturers, purchasers, processors, and retail sellers of cocoa beans.  The plaintiffs are not U.S. citizens, but were able to file their suit in U.S. Federal Court on the basis of the Alien Tort Statute, or the “ATS.”  That statute, originally passed in the Judiciary Act of 1789, provides original jurisdiction to the federal courts for foreign citizens to seek redress for harms suffered as the result of a tort committed in violation of the law of nations. Among other torts, courts have found torture, genocide, war crimes, and slavery to be actionable under the ATS.

Two recent Supreme Court cases give some context to this case.  First, in 2013 the Supreme Court decided the case Kiobel v. Royal Dutch Petroleum Co. In that case, the Court established that the ATS did not have extraterritorial application, that is it did not cover conduct that occurred in another country.  In order to be covered by the statute, plaintiffs must allege specific domestic conduct which violated the ATS.  Then, in the 2017 case Jesner v. Arab Bank, PLC, the Supreme Court established that the ATS also did not apply to foreign corporations.  The Court in that decision left open the question of whether domestic corporations are amenable to suit under the ATS.

The Ninth Circuit provided it’s answer to that open question in the affirmative in this decision, finding that nothing in the ATS or in Jesnerforeclosed plaintiffs’ ability to sue domestic corporations.  In overturning the district court’s opinion, the Ninth Circuit disagreed with their finding that the plaintiffs had not plead sufficient facts to establish that conduct occurred domestically.  The court found that the corporate defendants were alleged to have provided “personal spending money to maintain the farmers’ and/or the cooperatives’ loyalty as an exclusive supplier” of cocoa beans.  Furthermore, the court found that the corporations regularly inspected operations in Côte d’Ivoire and reported “back to the United States offices, where these financing decisions, or ‘financing arrangements,’ originated.”  The Ninth Circuit found that this activity was enough to establish liability under the ATS, based on a theory of aiding or abetting the underlying violations of the law of nations, the slavery and torture that the plaintiffs witnessed and endured.

This is likely not the last time this case will make headlines; it has been generating them throughout its 13-year history since being filed in 2005. If this strategy is ultimately successful, it could provide a roadmap for other plaintiffs to hold United States corporations accountable for the roles they play in operating in economies that are built, in part, on violations of international norms regarding labor conditions.  Substandard working conditions have long been alleged against manufacturers of textiles, electronics, and agricultural goods such as the cocoa production at issue in this case.  In the United States, labor laws exist to protect employees form unsafe working conditions, unfair practices, ill treatments, and substandard pay, among myriad other protections.  When foreign governments provide less protection to workers, unscrupulous corporations take advantage of the opportunity to reduce labor costs and seek profit while turning a blind eye to the worker abuses.  This statute may provide a means for those corporations to finally be held accountable for the roles they play in supporting these labor abuses.

Our New Jersey employment lawyers will continue to monitor the Nestle lawsuit and the impact it will have on domestic companies who conduct business outside the country.  Should you have an employment law related issue concerning your wage discrimination or equal pay, please feel free contact one of our New Jersey equal pay lawyers to discuss the facts of your situation.