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DOL alleges Hyundai supplier used child labor in Alabama facility

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U.S. Department of Labor filed a complaint Thursday alleging a 13-year-old worked 50-60 hours at an Alabama assembly line owned by an auto part manufacturer, SMART, which Hyundai Motor America owned 72.45% of at the time. 

The Fair Labor Standards Act complaint was filed in the Middle District of Alabama by acting Secretary of Labor Julie A. Su with Hyundai Motor Manufacturing Alabama (HMMA), SMART Alabama LLC, and Best Practice Services named as the defendants. 

HMMA is owned by Hyundai Motor America, which owned 72.45% of SMART’s parent company SMART, Inc. during the time of the allegations, the complaint says.

“Child labor is an unfortunate reality in the United States today,” the complaint says. “This case is about who bears responsibility for child labor violations in an automotive supply chain.” 

It says the 13-year-old girl worked on an assembly line making body parts for automobiles instead of attending middle school. This included working with machines that formed sheets of metal, the complaint says. It adds the parts were shipped to HMMA in Montgomery, Alabama where they ended up on vehicles sold to customers throughout the country. 

In a released statement to ABC News Hyundai said, “use of child labor, and breach of any labor law, is not consistent with the standards and values we hold ourselves to as a company.”

“We worked over many months to thoroughly investigate this issue and took immediate and extensive remedial measures. We presented all of this information to the U.S. Department of Labor in an effort to resolve the matter, even while detailing the reasons why no legal basis existed to impose liability under the circumstances.

“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. We are reviewing the new lawsuit and intend to vigorously defend the company.”

The SMART facility, located in Luverne, Alabama, manufactures component parts such as body panels, the claim states. SMART changed its name in 2023 to ITAC Alabama, LLC. 

Best Practices, a staffing company located in Montgomery, Alabama, supplied labor to SMART and HMMA, the complaint alleges. 

The complaint alleges the defendants willfully and repeatedly violated the law by employing oppressive child labor between July 11, 2021 and Feb. 1, 2022. 

SMART informed Best Practices that two other employees were not welcome back due to their appearance and other physical characteristics, which suggested they were underage, the complaint says. 

The minors were employed by Best Practices but supervised daily by SMART, the complaint says. 

“Nearly all, if not the entirety, of the component parts that SMART manufactured during the relevant period were shipped to HMMA in Montgomery, Alabama,” the complaint says. “SMART existed at HMMA’s discretion to provide HMMA with the parts that HMMA needed, and SMART had no separate or independent business purpose.” 

Also, during the relevant time, employees of HMMA served as corporate officers of SMART and served on the board of directors of SMART Inc., the complaint says. It adds this gave HMMA significant control over the overall operations at SMART. 

“During the relevant period, HMMA also indirectly controlled and supervised the minor employee(s); retained the right to modify the terms and conditions of their employment; and significantly invested in equipment and facilities necessary to their work,” the complaint says. “The minor employee(s) also performed work that was integral to the operations of HMMA, as these employees manufactured component parts that were later installed on vehicles manufactured, sold, and placed into interstate commerce by HMMA.”

A DOL release says the complaint follows an investigation from the department’s Wage and Hour Division. 

“The Department of Labor’s complaint seeks to hold all three employers accountable in the supply chain,” said Solicitor of Labor Seema Nanda in the release. “Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are in fact also employers themselves.”

The complaint seeks orders to stop the illegal employment of children and require the companies to disgorge profits related to child labor, the release says.


Image courtesy of huettenhoelscher/iStock

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