The US Department of Labor sued a Hyundai manufacturing facility in Alabama, an auto parts supplier and a staffing firm over allegations of child labor. The suit aims to prevent the firms from using underage workers in the future and will require the firms to surrender profits related to the past use of child labor.

In one instance, a youth under the age of 14 worked on an assembly line for up to 50 to 60 hours per week, according to the lawsuit. The youth worked at a Luverne, Alabama, facility that was operated by Smart Alabama, an auto parts supplier to Hyundai. The suit alleged that child labor violations took place between July 11, 2021, and Feb. 1, 2022.

Hyundai, in a statement May 31 to SIA, said it took immediate action to investigate the issue and took quick steps to remediate the situation. And while the use of child labor or breach of any laws isn’t consistent with company values, the Labor Department is applying an unprecedented legal theory that would hold the company liable for the actions of its suppliers.

The suit was filed against Hyundai Motor Manufacturing Alabama, Smart Alabama and Best Practice Service.

Hyundai Motor Manufacturing Alabama operates an auto plant in Montgomery, Alabama.

Smart Alabama, which changed its name to ITAC Alabama, is located in Luverne, Alabama. The company manufactures component parts such as body panels. SIA reached out to ITAC for comment and a person answering the telephone said the company had no statement at this time regarding the pending litigation.

Best Practice Service is a staffing firm located in Montgomery, but the lawsuit indicated the company is no longer in business. An attorney for Best Practice was not listed in the court filings.

“The Department of Labor’s complaint seeks to hold all three employers accountable in the supply chain,” Solicitor of Labor Seema Nanda said in a press release. “Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are in fact also employers themselves.”

Here is Hyundai’s full response to the lawsuit:

“The use of child labor, and breach of any labor law, is not consistent with the standards and values we hold ourselves to as a company. We worked over many months to thoroughly investigate this issue and took immediate and extensive remedial measures. We presented all of this information to the U.S. Department of Labor in an effort to resolve the matter, even while detailing the reasons why no legal basis existed to impose liability under the circumstances. Unfortunately, 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. We are reviewing the new lawsuit and intend to vigorously defend the company.

“Hyundai’s facilities, including Hyundai Motor Manufacturing Alabama (HMMA) are committed to ensuring all of our own facilities comply fully with local, state, and federal laws. We have rigorous policies and procedures in place to maintain compliance with applicable laws and high standards of ethical conduct.

“After we learned of the alleged supplier violations, we took immediate actions. At our request, the suppliers involved terminated their relationships with the third-party staffing agencies even though those agencies had certified that they had screened and cleared individuals as being of legal age. In addition, we completed an investigation and a broader review of our US supplier network.

“We implemented new, more stringent workforce standards throughout our supply chain following the investigation. We have required our Alabama suppliers to conduct independently verified audits of their operations and to implement any recommended actions. This intervention will enable them to better identify and address any issues while they continue to provide jobs that support local communities. Additional and further audits will be deployed as needed to ensure best practices and recommendations are followed. We also introduced a compliance training program in collaboration with the US Department of Labor for suppliers on a variety of employment subjects.”

Julie A. Sue vs. Hyundai Motor Manufacturing Alabama, Smart Alabama and Best Practice Service; US District Court for the Middle District of Alabama; 2:24-cv-00325-SMD

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