Labor Department Sues Hyundai for Employing Child Worker

Hyundai cars on the sales lot at San Leandro Hyundai in San Leandro, Calif., on May 30, 2023. (Justin Sullivan/Getty Images)

The U.S. Department of Labor is suing Hyundai and two other companies, alleging that the firms profited from “oppressive child labor.”

The lawsuit was filed on May 30 at the U.S. District Court for the Middle District of Alabama. Three defendants are cited in the complaint—Hyundai Motor Manufacturing Alabama, SMART Alabama, and Best Practice Service (BPS).

SMART manufactures auto parts such as body panels for the Hyundai plant. BPS, which is no longer in business, supplied labor to SMART.

The lawsuit alleges that the defendants violated the child labor provisions of the Fair Labor Standards Act between July 11, 2021, and Feb. 1, 2022, by employing a minor employee referred to as EC.

The minor worker was a girl who was 13 years old at the time of employment.

“Instead of attending middle school, she worked on an assembly line making parts,” the suit says.

EC was assigned to an assembly line that SMART operated in Luverne, Alabama, working with machines that transformed sheets of metal into body parts for automobiles. The child allegedly worked at the facility for up to 60 hours per week.

EC’s employment violated provisions under Title 29 of the U.S. Code of Federal Regulations, which prohibits employment of individuals under the age of 16 in manufacturing operations; bans those under 18 from operating metal forming, punching, and shearing machines; and restricts employing minors less than 14 years of age “under any circumstance,” the lawsuit noted.

After EC was discovered at the Luverne facility by SMART, she and two more suspected minor employees were laid off by the firm. Before the minor was discovered, BPS “knew or had reason to know that this employee was underage,” the lawsuit said.

“Defendants unfairly profited by their use of oppressive child labor,“ the lawsuit states. ”Consumers throughout the United States unknowingly purchased automobiles that were manufactured with oppressive child labor. Defendants profited by these sales, and financial transactions related to the same, and continue to retain those profits today.”

Vulnerable employees such as children work for less money, are less likely to assert workplace rights, and have a very low likelihood of complaining about working conditions, the lawsuit stated. This gave the defendants “an unfair advantage” in the marketplace.

The lawsuit asked the court to issue an order stopping the illegal employment of children and requiring that the three companies discharge “all profits related to their use of oppressive child labor.”

In response to the lawsuit, Hyundai spokesman Michael Stewart told The Epoch Times that the company took “immediate actions” after learning that its supplier had allegedly violated labor laws.

“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,” he said.

Mr. Stewart insisted that the use of child labor and the breach of any labor regulation isn’t “consistent with the standards and values” held by Hyundai.

The company implemented “new, more stringent workforce standards” throughout its supply chain, mandating suppliers to conduct independent audits of operations.

‘Unprecedented Legal Theory’

According to Hyundai, the company submitted all information it acquired from its investigation on the issue to the Labor Department, including remedial measures that were undertaken.

This was done “in an effort to resolve the matter,” Mr. Stewart said. The company also explained to the department why there was “no legal basis” to impose liabilities on Hyundai for the incident.

“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,” he said.

Hyundai is reviewing the lawsuit and intends to “vigorously” defend itself, he said.

Solicitor of Labor Seema Nanda said the department will hold all three employers accountable. Having a 13-year-old working on an assembly line in the United States is a matter that “shocks the conscience,” she stated.

“Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are, in fact, also employers themselves.”

In fiscal year 2023, the Labor Department investigated 955 cases for child labor violations, up from 835 in 2022. The department identified a total of 5,792 minors employed in these cases, up from 3,876. More than $8 million in penalties was levied on employers in 2023.

A similar case was brought against five tech companies—Apple, Microsoft, Tesla, Dell, and Google’s parent firm, Alphabet—by plaintiffs alleging that the businesses were involved in child labor.

The lawsuit accused the companies of being part of a “forced labor” venture with their suppliers by buying cobalt mined in Congo by children. However, the D.C. Circuit Court of Appeals dismissed the lawsuit in March, pointing out that the tech firms only had a buyer-seller relationship with the suppliers.

“Purchasing an unspecified amount of cobalt through the global supply chain is not ‘participation in a venture’ within the meaning of the TVPRA (Trafficking Victims Protection Reauthorization Act),” it said.

There has been a bipartisan effort to counter child labor. In October 2023, Sens. Cory Booker (D-N.J.) and Josh Hawley (R-Mo.) introduced the Preventing Child Labor Exploitation Act.

The bill prohibits federal agencies from entering into contracts with companies that violate child labor laws or employ vendors who have failed to deal with the presence of child labor.

“Child labor is an abomination and it has no place in our country,” Mr. Hawley said.

“Companies that illegally employ children must be held accountable—especially those that contract with the federal government.”