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Court Dismisses Lawsuit against U.S. Retailer over Working Conditions at Foreign Supplier Factories

Posted on August 18, 2009 by Littler Mendelson
The Ninth Circuit Court of Appeals recently upheld the dismissal of a class action lawsuit brought against a U.S. company by employees of its foreign suppliers, holding that the U.S. retailer was not responsible for working conditions in overseas factories operated by independent suppliers.

Foreign workers from China, Bangladesh, Indonesia, Swaziland and Nicaragua filed a class action against the retailer, alleging that it had failed to ensure that its foreign suppliers complied with local laws and industry standards on working conditions, including wages, hours and discrimination. The plaintiffs asserted several contract law and common law theories of liability, all of which the court rejected.

For a full discussion of the decision and its implications for employers, see "Employees Alleging Labor Violations by Foreign Suppliers Cannot Proceed Against U.S. Companies Based on Code of Conduct Clause in Supply Contracts," written by Eric A. Savage and Ian T. Wade.

Tags: Supply Contracts
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