Brazilian Supply Chain Workers Sue US Company under an American Law
A lawsuit has been filed by eight Brazilian workers in Washington, DC against Starbucks, accusing the company of exploiting labor on its suppliers' farms in Brazil, involving trafficking and "slavery-like conditions."
HR Policy Global’s Take: The plaintiffs, who aim to represent a class of thousands, are seeking compensation under the Trafficking Victims Protection Reauthorization Act (TVPRA), which was used last year against a few tech giants. The results of this case will determine how successfully foreign workers can sue American companies in the U.S. over labor rights violations in their supply chains.
Trafficking Victims Protection Reauthorization Act (TVPRA)
Due to the lack of adequate legal frameworks in Brazil, Brazilian workers decided to sue the company in the U.S. under Trafficking Victims Protection Reauthorization Act (TVPRA) to receive compensation. This was not the first time this law was invoked to solve supply chain forced labor issues.
In March 2024, The D.C. Circuit Court issued a ruling in the case where several U.S. tech companies were accused of benefiting from forced labor in cobalt mining in the Democratic Republic of the Congo.
The court found that merely purchasing cobalt through the global supply chain does not constitute "participation in a venture," a requirement for liability under the TVPRA.
The court upheld that the plaintiffs had standing but had not adequately alleged the defendants' participation in a venture. The ruling suggests a broader definition of "participation in a venture" that includes taking part in an enterprise involving risk and gain. However, buying a commodity alone doesn't meet this threshold.
Additionally, the court didn't address whether the TVPRA's civil remedy applies extraterritorially, leaving open questions for future cases involving forced labor abroad.
However, NGOs argued that the company is still allegedly importing coffee from the same farms listed on Brazil's "dirty list," which were linked to forced labor practices.
What's next: With ongoing lawsuits and increased scrutiny, global companies should reassess their supply chain practices to ensure compliance with ethical standards and conduct regular supplier audits using the governments’ public lists to identify companies and entities involved in forced labor practices.
Wenchao Dong
Senior Director and Leader, HR Policy Global, HR Policy Association
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Case May Signal New Risks for U.S. Companies’ Global Supply Chains