Unmasking the Charade of the Global Supply Contract: A Novel Theory of Corporate Liability in Human Trafficking and Forced Labor Cases

Article excerpt

  I. INTRODUCTION   II. GENERAL BACKGROUND      A. Forced Labor Statistics and Background         Information      B. History and Evolution of the Global Supply         Contracting System  III. ECONOMIC REALITIES TEST      A. Basic Theory of Joint Employment      B. Common Law Test      C. Introducing the Economic Realities Test   IV. PILGRIM ECONOMIC REALITIES APPROACH      A. The Global Supply Contract and Dependent         Contractors    V. THE TVPRA AND ECONOMIC REALITIES TEST      A. TVPRA--Relevant Causes of Action (Global         Contracting "Forced Labor" context)      B. TVPRA Legislative History--Clear Intent to         Abolish Slavery      C. Legislative History of the FLSA  VI. CONCLUSION 


In February 2007, an investigative trip to China by members of Students and Scholars Against Corporation Misbehavior (SACOM) resulting in the plug being pulled on Mickey and his other Disney pals. (1) As a result of SACOM's 2006 report outlining the "working class hell" conditions suffered by the laborers who manufactured Disney's products, and subsequent media outcry, Disney discontinued its relation with the plant. (2) It is difficult to reconcile the image of Disney's delicate princess dolls, complete with dainty accessories, in the hands of exhausted, sick workers working and living in a dangerous substandard factory and dormitory. (3) Yet, the Disney factory is representative of the overseas factories that constitute pivotal links in the global supply chain of many U.S. and foreign corporations.

Although the global economy has enabled average people access to a diverse and ready supply of inexpensive clothing and electronics, the dark reality is that this access comes at great human expense. The by-products of these cheap products are human trafficking and forced labor. (4) It is not just global criminal gangs that use electronic communications and various modes of transport to exploit vulnerable and desperate people living in poor countries. Although less visible, corporations using global production chains, containing multiple levels of subcontracting and outsourcing, breed human trafficking and forced labor. (5) Corporations driving this dynamic easily avoid accountability given the extraterritorial location of the suppliers, and the appearance of "arm's length" contracts with their suppliers. (6) As Jorge Bustamante rightly points out, "[t]he practice of subcontracting ... labour can also be a gateway for the impunity for abuse of and violations against migrant workers." (7) The caginess of corporations in avoiding liability in the global contracting setting cannot be underestimated. Because corporations have circumvented the law, victims must find new theories of liability. This Article proposes a path of potential relief.

Courts should apply the economic realities test as a vehicle to determine the existence of joint employment between a corporation and their contractor. (8) Under the theory of joint employer liability, corporations would be equally responsible for their contractors' acts in trafficking/forced labor cases pursuant to the Trafficking Victims' Protection Reauthorization Act (TVPRA). (9) Despite attacks from defense counsel, the economic realities test is legally sustainable and legislatively sound. This test was born in response to the Fair Labor Standards Act (FLSA) (10) and other progressive federal labor statutes that embodied strong Congressional intent to improve working conditions, and decrease economic advantage to those violating fair labor standards. (11) Numerous United States Supreme Court and circuit rulings refined and expanded the definition of "joint employer" and shifted the focus of inquiry away from employer control to the dependency of the worker. (12) The TVPRA's vivid legislative history shows congressional concern to decrease human trafficking, punish those who force labor, and address the problem of the foreign contractor. …


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