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Signal International Lawsuits

SPLC complaint in David v. Signal International, LLC
(Filed 03/10/2008)

The SPLC filed suit on behalf of guest workers from India who were defrauded and exploited in a labor trafficking scheme engineered by a Gulf Coast marine services company, an immigration lawyer and an Indian labor recruiter who lured hundreds of workers to a Mississippi shipyard with false promises of permanent U.S. residency.

After a seven-year legal battle culminating in a four-week trial, a federal jury in New Orleans awarded $14 million in compensatory and punitive damages to five Indian guest workers in February 2015. It found that the company, Signal International, and businesses owned by New Orleans lawyer Malvern C. Burnett and India-based recruiter Sachin Dewan engaged in labor trafficking, forced labor, fraud, racketeering and discrimination. The jury also found that one of the five plaintiffs was a victim of false imprisonment and retaliation.

The legal team representing the workers received the Public Justice Foundation’s 2015 Trial Lawyer of the Year Award.

A $20 million to $22 million settlement agreement was announced in July 2015 to resolve 11 other, remaining labor trafficking lawsuits – all spearheaded by the SPLC – against Signal, which declared bankruptcy. The settlement included the $14 million in damages awarded earlier.

It also resolved a lawsuit by the Equal Employment Opportunity Commission.

Signal issued an unprecedented apology as part of the agreement. The company acknowledged it was “wrong in failing to ensure that the guest workers were treated with the respect and dignity they deserved.” It also apologized for overcrowded workers’ quarters and a pre-dawn raid on the quarters in Pascagoula, Mississippi. The March 2007 raid was an attempt to deport guest workers in retaliation for their complaints to workers’ rights advocates about the abuses they faced. One worker was so distraught he attempted suicide.

“Signal deeply regrets the living conditions the guest workers were subjected to, and is sorry for its actions on March 9, 2007,” the company stated. “Signal knows this treatment caused hardship to the guest workers, and in many cases, their families.”

The SPLC lawsuit, filed in the U.S. District Court for the Eastern District of Louisiana, described how in the aftermath of Hurricane Katrina, Signal used the U.S. government’s H-2B guest worker program to import nearly 500 men from India to work as welders, pipefitters and in other positions to repair damaged oil rigs and related facilities. Some were sent to Pascagoula, Mississippi, and others to Orange, Texas.

The workers each paid the labor recruiters and a lawyer between $10,000 and $20,000 or more in recruitment fees and other costs after recruiters promised good jobs, green cards and permanent U.S. residency for them and their families. Most sold property or plunged their families deeply into debt to pay the fees.

When the plaintiffs arrived at Signal shipyards in Pascagoula, beginning in 2006, they discovered that they wouldn’t receive the green cards or permanent residency that had been promised. Signal also forced them each to pay $1,050 a month to live in isolated, guarded labor camps where as many as 24 men shared a space the size of a double-wide trailer. The workers also faced disparagement because of their race or nationality. None of Signal’s non-Indian workers were required to live in the company housing.

In March 2007, some of the workers were illegally detained by Signal’s private security guards after a pre-dawn raid of their quarters in Pascagoula. Two were detained for the purpose of deporting them to India in retaliation for complaining about the abuses and meeting with workers’ rights advocates. One of the workers was so distraught about getting deported with crippling debt that he attempted suicide.

After a judge did not grant class action status to the SPLC case – a status that would have allowed the suit to benefit most of Signal’s guest workers – the SPLC coordinated an unprecedented legal collaboration that brought together nearly a dozen of the nation’s top law firms and civil rights organizations to represent, on a pro bono basis, hundreds of workers excluded from the original SPLC suit by the denial of class action status.

Plaintiffs: Hemant Khuttan, Andrews Issac Padaveettiyl, Sony Vasudevan Sulekha and Palanyandi Thangamani. (List does not include all original plaintiffs, some of whom became plaintiffs in related suits after class action status was denied.)

Defendants: Signal International LLC, Law Offices of Malvern C. Burnett, Malvern C. Burnett, Dewan Consultants, and Sachin Dewan. (List does not include all original defendants, only those who were still defendants at the time of trial.)

EEOC complaint in EEOC v. Signal International
(Filed 04/20/2011)

Three years after the SPLC filed its lawsuit, the U.S. Equal Employment Opportunity Commission sued Signal, accusing the company of discriminating against the Indian guest workers in the David case filed by the SPLC and its co-counsel. The EEOC’s lawsuit also alleged that Signal retaliated against the workers – firing them, detaining them and attempting to deport them – when they tried to oppose the company’s discriminatory practices.

The EEOC reached a $5 million settlement agreement with Signal in 2015 as part of a larger $20 million settlement agreement that resolved 12 lawsuits the SPLC coordinated against the company.

The EEOC lawsuit was part of an effort targeting extreme labor abuse. The court allowed the guest workers represented by the SPLC to join the EEOC’s case as plaintiff-intervenors, providing these workers with a voice in the EEOC case and another opportunity for justice. The EEOC lawsuit was also significant because the government sought to hold Signal, rather than labor recruiters or other “middlemen,” responsible for the abuses.

The lawsuit charged that Signal discriminated against the Indian workers by requiring them to pay astronomical rent to live in substandard, crowded housing that non-Indian workers did not have to occupy, and created and perpetuated a hostile work environment against the Indian employees based on their race or national origin.