Blog: Worker rights
Leonie Barrie | 14 September 2005
Retailers around the world will be keenly following the progress of a lawsuit that effectively makes Wal-Mart legally viable for the welfare of workers at its suppliers’ factories. The lawsuit, which has been filed by the International Labor Rights Fund on behalf of apparel workers in Bangladesh, China, Indonesia, Nicaragua and Swaziland, says Wal-Mart violated its contractual obligations by failing to enforce the codes of conduct set up to protect its overseas workers.
It sets a number of precedents likely to cause concern to US companies. For instance, it argues that the code of conduct signed with suppliers created contractual obligations between Wal-Mart and the workers, even though they were not directly employed by the retailer. And it says Wal-Mart made false and misleading statements to the American public about its labour and human rights practices.
The workers – who say they were paid less than the minimum wage, were not allowed holidays, were forced to work overtime, were beaten by managers and were locked in their factories – have few enforceable mechanisms in their home countries to address these violations.
The track record of their legal team makes the success of this case a very real certainty too. It recently sued Los Angeles-based Unocal corporation on behalf of Burmese plaintiffs used as forced labour during the construction of a natural gas pipeline. The suit was settled earlier this year in the plaintiffs' favour for an estimated $30 million in cash.
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