USA Law and Practice Contributed by: Michael G. Congiu and Gillian Gilbert, Littler
have known was engaged in forced labour or trafficking. Key penalties include: • fines of up to USD500,000 or twice the eco - nomic benefit derived from the violation; • criminal prosecution of employees responsi - ble for engaging in or facilitating trafficking, with potential imprisonment of up to 20 years; and/or • restitution potentially awarded to victims in criminal proceedings; The statute applies extraterritorially, allowing for prosecution of trafficking offences committed abroad if linked to US-based entities. Fair Labor Standards Act of 1938 (FLSA) The FLSA prohibits the shipment or delivery of goods produced in the United States using oppressive child labour. Violations may result in:
websites, provided they otherwise comply with the rule’s requirements. Civil Rights and Anti-Discrimination Laws Corporations may face civil litigation for viola - tions of federal and state anti-discrimination laws. Under Title VII of the Civil Rights Act of 1964, individuals are protected from discrimi - nation based on race, colour, religion, sex, and national origin, particularly in employment-relat - ed matters such as hiring, promotion, and com - pensation. Nearly every US state has enacted its own anti- discrimination laws, which may mirror or expand upon federal protections. Consumer Protection-Based Liability In recent years, plaintiffs in states such as Cali - fornia and Massachusetts have increasingly turned to consumer protection statutes to hold corporations accountable for alleged human rights abuses in their supply chains. These legal actions typically focus on a company’s failure to disclose the use – or risk – of forced labour in the production of goods, arguing that such omis - sions or misrepresentations mislead consumers. Legal Basis and Case Examples In 2015, a series of six class action lawsuits were filed in California federal courts against major corporations. The plaintiffs alleged that these companies failed to disclose the use of forced labour in their supply chains, particularly in regions such as Thailand and West Africa. The claims were brought under California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and the Consumer Legal Remedies Act (CLRA). To succeed under these statutes, plaintiffs gen - erally must demonstrate that the company made
• fines of up to USD10,000; and/or • imprisonment for wilful violations.
California Transparency in Supply Chains Act The California Attorney General is authorised to pursue injunctive relief against companies that fail to comply with the Act’s disclosure require - ments. This may include compelling a company to publish the required information on its web - site. Conflict Minerals Rule The SEC may impose civil penalties on compa - nies that fail to comply with the Conflict Minerals Rule. However, in 2017, the SEC clarified that it would not enforce certain aspects of the rule – specifically, it would not penalise companies for failing to post the conflict minerals report on their
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