NEW ORLEANS (CN) - Signal International revealed in a bankruptcy filing that it will pay $20 million to resolve claims it lured Indian workers to the United States. with false promises of good jobs and American visas.
The revelation comes six months after a New Orleans jury found the maritime construction company guilty of human trafficking, and ordered it and other defendants to pay $14 million in restitution.
"This agreement will ensure some compensation for these workers who only sought a better life when they took these jobs," said Alan Howard, board chairman of the Southern Poverty Law Center and a partner at Crowell & Moring in New York.
Faced with a backlog of contracts to refurbish ships and tankers decimated by Hurricane Katrina, Signal recruited roughly 500 workers, mostly from India and the United Arab Emirates.
The workers later filed lawsuits claiming Signal lured them to the United States with false promises of permanent U.S. residency and charged them "travel fees" of as much as $20,000 apiece for jobs at shipyards in Pascagoula, Miss. and Orange, Texas.
In a 2008 class action 12 plaintiffs said they were forced to work long hours for next to nothing, and had money deducted from their checks each month for housing in an overcrowded, unsanitary labor camp.
As had been the case with the plaintiffs in the earlier lawsuits, they said they'd paid thousands of dollars apiece as recruitment, visa and travel "fees," because they were told doing so would lead to good jobs and permanent U.S. residency.
Many workers said they sold their houses or wife's dowry to get the money, or took out high-interest loans to get to the United States to work, only to find upon their arrival in 2006 and 2007 that there would be no green cards, and that Signal planned to take more than $1,000 a month from their paychecks, ostensibly for housing in isolated, fenced labor camps.
At the came, they continued, as many as two dozen men shared one trailer and only two toilets. Signal's non-Indian workers were not required to live in the camps.
During the trial last January, Alan Howard, on behalf of the workers, told the jury that officials at Signal International thought the Indian workers would be happy to live together in tiny trailers with just two toilets each because they were coming from India, and anything provided to them would be better than living back home.
Howard quoted from an email from an American worker at Signal International upon seeing the camp of trailers. With indoor plumbing and lots of space between the beds, the man reportedly said the Indian workers would think the camp was like the "Taj Mahal" and would be happy to just roll out of bed and go to work.
That same man later told attorneys he only thought this because of what he'd heard about the living conditions in India - stories that recounted their digging ditches for sanitation, and about how bad Indians smelled.
Although the first of the workers began to arrive only in late 2006, by early 2007 the men were already falling ill due to the overcrowded, unsanitary conditions at the camp, Howard said.
Howard quoted from the private journal entry of the same American worker who had made the "Taj Mahal" remark.
An entry from February 2007, noted the horrid conditions and the Indians' resulting sickness: "Our men have been dropping with sickness like blocks," he wrote, going on to say that shoddy plumbing had resulted in pools of standing water "everywhere" that created a "bacterial breeding" camp.
Howard said one of the Indian workers became so sick he had to be hospitalized.
In 2007, some of the workers were illegally detained by Signal's private security guards during a pre-dawn raid of their housing compound in Pascagoula. Two men were detained to be deported back to India in retaliation for complaints they made about abuses and for meeting with workers' rights advocates. One worker was so upset he attempted suicide.
The lawsuits almost failed after a judge denied class action status. After the judge's denial, the Southern Poverty Law Center recruited nearly a dozen of the best law firms and civil rights organizations in the country to represent workers on a pro bono basis.
The trail that ended here in February with a $14 million award to the guest worker plaintiffs was the first of the lawsuits to be tried.
Signal filed Chapter 11 bankruptcy proceedings in a Delaware court early this week. As part of its bankruptcy agreement, the company agreed to issue an apology to hundreds of guest workers who filed lawsuits against it in Alabama, Texas and Louisiana.
Ordinarily, bankruptcy proceedings freeze pending litigation and litigants must stand behind creditors in order to receive proceeds. But in this case, as part of the bankruptcy proceedings, Signal officials and plaintiffs' lawyers negotiated the settlement terms.
Eleven guest worker lawsuits are still pending with claims expected to be resolved by the $20 million settlement. The remaining lawsuits represent more than 220 guest workers with identical claims as those that were successfully tried in February.
"We are happy to have reached an agreement and hope to see it quickly approved by the court," Jim Knoepp, deputy legal director of the Southern Poverty Law Center, said in a statement.
"These workers have waited seven long years for justice. This agreement and apology from the company will allow the workers to finally move on with their lives. It also serves as a warning to companies that might exploit guest workers," Knoepp said.
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