Company to apologize to Indian guest workers; will pay $20million settlement

$20 million settlement agreement reached in labor trafficking cases coordinated by SPLC on behalf of exploited Indian guest workers

Signal International to issue apology to guest workers

MONTGOMERY, Ala. – A $20 million settlement agreement has been reached to resolve numerous labor trafficking lawsuits – spearheaded by the Southern Poverty Law Center (SPLC) – against Signal International, a Gulf Coast marine services company that was found liable by a federal jury earlier this year for defrauding and exploiting workers it lured from India.

The company, based in Mobile, Alabama, will issue an apology to guest workers who also sued in Texas and Louisiana. The agreement, if approved by the U.S. Bankruptcy Court, would resolve the 11 lawsuits still facing the company, which has filed for Chapter 11 bankruptcy protection. Those lawsuits represent more than 200 workers with the same claims as those of the workers in the successful SPLC lawsuit tried earlier this year.  

“We are happy to have reached an agreement and hope to see it quickly approved by the court,” said Jim Knoepp, SPLC deputy legal director. “These workers have waited seven long years for justice. This agreement and apology from the company will allow the workers to finally move on with their lives. It also serves as a warning to companies that might exploit guest workers.”

In February, a federal jury in New Orleans awarded $14 million in damages to five Indian guest workers represented by the SPLC, finding that the company and its agents engaged in labor trafficking, fraud, racketeering and discrimination. The jury also found that one of the plaintiffs was a victim of false imprisonment and retaliation. (Jacob Joseph Kadakkarappally was awarded the highest amount of $4.1million, as he was detained by the company. It is being called the highest amount awarded in a trafficking case. “It’s a great day for justice,” said Sony Vasudevan Sulekha, another plaintiff, who was awarded more than $2.27 million. “We are grateful that a jury in an American court of law heard our stories and understood the discrimination and deceit that caused us so much pain.” Other plaintiffs awarded were Hemant Khuttan ($2.54 million), Andrews Issac Padaveettiyl ($2.6milion), and Palanyandi Thangamani ($2.56 million).

The case was the first of the dozen lawsuits against Signal to go to trial.  Together, the suits comprised one of the largest labor trafficking cases in U.S. history. Another case was set to go to trial this month.

“This agreement will ensure some compensation for these workers who only sought a better life when they took these jobs,” said Alan Howard, SPLC board chairman and a partner in Crowell & Moring’s New York office. “They persevered and won justice. This agreement sends a powerful message that guest workers have rights and cannot be exploited.”

Crowell & Moring, LLP, served as the SPLC’s co-counsel in the trial along with the American Civil Liberties Union, the Asian American Legal Defense and Education Fund, Coschignano & Baker, and the Louisiana Justice Institute.

The legal team was honored for its work on the case in Montreal Monday night when it received the Public Justice Foundation’s Trial Lawyer of the Year award.

In the aftermath of Hurricane Katrina, Signal used the U.S. government’s H-2B guest worker program to import nearly 500 men from India to work as welders, pipefitters and in other positions to repair damaged oil rigs and related facilities.

The workers each paid the labor recruiters and a lawyer between $10,000 and $20,000 or more in recruitment fees and other costs after recruiters promised good jobs, green cards and permanent U.S. residency for them and their families. Most sold property or plunged their families deeply into debt to pay the fees.

When the men arrived at Signal shipyards in Pascagoula, Mississippi, beginning in 2006, they discovered that they wouldn’t receive the green cards or permanent residency that had been promised. The company also forced them each to pay $1,050 a month to live in isolated, guarded labor camps where as many as 24 men shared a space the size of a double-wide trailer. None of the company’s non-Indian workers were required to live in the company housing.

Under the guest worker program, workers are not allowed to change jobs if they are abused but face the loss of their investment if they are fired or quit. An economist who reviewed the company’s records estimated the company saved more than $8 million in labor costs by hiring the Indian workers at below-market wages.  

In March 2007, some of the SPLC’s clients were illegally detained by the company’s private security guards during a pre-dawn raid of their quarters in Pascagoula. Two were detained for the purpose of deporting them to India in retaliation for complaining about the abuses and meeting with workers’ rights advocates. One worker was so distraught he attempted suicide. The SPLC filed suit in 2008.

The other lawsuits facing Signal International and its agents were filed after a judge did not grant class action status in the SPLC case, which would have allowed the suit to benefit most of Signal’s guest workers. The SPLC coordinated an unprecedented legal collaboration that brought together nearly a dozen of the nation’s top law firms and civil rights organizations to represent, on a pro bono basis, workers excluded from the original SPLC suit.

The SPLC documented the abuses within the nation’s broken H-2B guest worker program and the desperate need for reform in its report Close to Slavery.  It found that guest workers are routinely subjected to human trafficking, cheated out of wages and held virtually captive by employers or labor brokers who seize their documents.