In the wake of Hurricane Katrina, Signal International, a shipyard and marine services company on the Gulf Coast, was in a bind: The company couldn’t find enough qualified pipe fitters, welders and other workers to repair all the Gulf Coast oil and gas rigs damaged by the storm. Signal’s solution was to look overseas.
Under the U.S. government’s H-2B guest-worker program, Signal ultimately imported around 500 laborers from India to do the work. Much like the indentured servants of yesteryear, those workers soon discovered they had been grievously misled about what awaited them. The details laid out in court documents are Dickensian.
Lured with the promises of green cards, many workers (and their families) went deeply into debt to pay “recruitment fees” that ranged from $10,000 to $20,000. Once in the U.S., the men were housed in squalid and isolated labor camps, where they paid over $1,000 a month to Signal for the privilege of sharing a toilet and a trailer with as many as a dozen fellow workers. Those who complained were subjected to threats of legal and physical harm. And, of course, the green cards proved to be a fiction.
In 2008, the Southern Poverty Law Center, joined by several other nonprofits and pro bono lawyers at the Washington, D.C., firm of Crowell & Moring, tried to initiate a class-action suit. After several years of wrangling, Signal seemed to have secured a critical victory when a federal judge refused to certify the class.
That advantage faded quickly when the SPLC put out a nationwide call for pro bono assistance to represent the more than 250 plaintiffs. Among the 13 national firms and legal services to answer the call was Fredrikson & Byron, which assembled a team led up by shareholder Sten-Erik Hoidal to sue on behalf of 10 of the Indian guest workers.
The lawsuit — which asserted claims for violation of the federal anti-trafficking law, fraud, discrimination and breach of the contract — was set to go to trial last August. In July, shortly after a jury in a related case hit Signal with a $14 million judgment, the company filed for bankruptcy. In a settlement, Signal agreed to establish a $20 million fund to resolve multiple labor trafficking claims. It also issued a formal apology.
For Hoidal, the experience was “very eye-opening.”
“You hear a lot about sex trafficking, which is, obviously, a huge problem and a huge concern,” Hoidal says “There’s also a labor trafficking problem, which is also huge problem, but you don’t hear much about it.”
In terms of the lawyering, Hoidal says the Signal litigation was the biggest and most complex pro bono case he’s been involved with — and in some regards, he adds, the most gratifying.
Collectively, Fredrikson put in more than 4,000 hours, collaborating extensively with the other firms. Attrition was never an issue with Signal litigation.
“We didn’t have that problem at all,” says Hoidal. “We had a dedicated team throughout and, when we need extra help, people volunteered. It was pretty awesome and pretty refreshing.”