US Labor Dept sues Hyundai over US child labor, court filing shows

By Thomson Reuters May 30, 2024 | 12:54 PM

By Mica Rosenberg, Kristina Cooke and Joshua Schneyer

NEW YORK (Reuters) -The U.S. Department of Labor on Thursday sued South Korean auto giant Hyundai Motor Co, an auto parts plant and a labor recruiter, over illegal use of child labor in Alabama.

The complaint, filed in U.S. District Court in Montgomery, Alabama, also sought an order requiring the companies to relinquish any profits related to the use of child labor.

Reuters reported in 2022 that children, some as young as 12, worked for a Hyundai subsidiary and in parts suppliers for the company in the Southern state.

The Labor Department in its filing named three companies as defendants, Hyundai Motor Manufacturing Alabama LLC, SMART Alabama LLC, an auto parts company, and Best Practice Service LLC, a staffing firm, for employing a 13-year-old child.

The Department’s Wage and Hour Division found the child had worked up to 50-60 hours per week on an assembly line operating machines that formed sheet metal into auto body parts.

“Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are in fact also employers themselves,” Solicitor of Labor Seema Nanda said in a press release.

In an 18-month investigation, Reuters learned of underage workers at Hyundai supplier SMART, in Luverne, Alabama, following the brief disappearance in February 2022 of a Guatemalan migrant child from her family’s home in Alabama.

The girl and her two brothers, aged 12 and 15 at the time, all worked at the plant in 2022 and were not going to school, according to people familiar with their employment.

At the time, SMART was a Hyundai subsidiary.

Hyundai in an emailed statement said the company no longer has any ownership in SMART.

Hyundai spokesperson Michael Stewart said the company had “worked over many months to thoroughly investigate this issue and took immediate and extensive remedial measures” and had presented this information to the Department of Labor to try to resolve the issue.

The Labor Department is seeking to apply “an unprecedented legal theory that would unfairly hold Hyundai accountable for the actions of its suppliers and set a concerning precedent for other automotive companies and manufacturers,” Stewart said.

In 2022, Reuters revealed the widespread and illegal employment of migrant children in Alabama factories supplying both Hyundai and sister brand Kia. In addition to leading to probes by law enforcement and regulators, the coverage was followed by other media examinations of the problem of child labor in the U.S.

The Reuters reporting helped prompt the rescue of several children from one factory floor and spurred at least 10 state or federal investigations.

The U.S. Labor Department says it has seen a surge in child labor violations and has investigated cases involving 5,792 children nationwide, including hundreds employed in hazardous occupations in the 2023 fiscal year.

(Reporting by Mica Rosenberg, Kristina Cooke and Joshua Schneyer; editing by Jonathan Oatis)