What the Supreme Court just ruled on profiting from slave labor

Did the U.S. Supreme Court just rule that companies can profit from the use of slave labor? Many of the headlines following last week’s ruling in the Nestle v. John Doe case incorrectly suggested that conclusion. The reality is quite different.

The case involved six individuals from Mali who allege that traffickers operating farms in Cote d’Ivoire forced them to work harvesting cocoa. The complaint declared that the major global chocolate companies knew about human trafficking and purchased the cocoa anyway. Their supply chains were tainted with forced labor.

The Supreme Court never reached the merits of the case. Last week’s decision had nothing to do with whether traffickers forced the plaintiffs to work or whether the companies improperly profited from having forced labor in their supply chains. Instead, the court bounced the case on jurisdiction grounds because the plaintiffs brought their suit under the archaic Alien Tort Statute (ATS) that Congress passed in 1789, when George Washington was president. In its 8-1 decision, the court was unwilling to bend and twist the ATS to apply in this case. 

The lesson to draw from the decision is not that companies have nothing to worry about regarding their supply chains or that survivors of human trafficking have no recourse. The opposite is true. Although the ATS is not a good fit for the relief the survivors were seeking, the court went into detail describing a better path for success. The court highlighted that the Trafficking Victims Protection Act of 2000 (TVPA) is a law intended for cases like this. Interestingly, in February of this year, a group of survivors filed a similar case against the big global chocolate companies under the TVPA, instead of the clunky, ill-suited ATS.

Congress designed the Trafficking Victims Protection Act (TVPA) specifically to allow human trafficking survivors to sue companies that benefit from participating in a venture that has ties to forced labor or sex trafficking. Companies may face liability if they “knew” about the trafficking or if they “recklessly disregarded” the fact that trafficking was present. The TVPA case brought against the chocolate companies avoids the jurisdictional challenges that led to last week’s Supreme Court decision.

Survivors are active, and we have seen a significant rise in the number of federal TVPA civil suits against businesses. The Human Trafficking Institute reports that the number of federal TVPA civil lawsuits has tripled in the last five years. This upswing in cases is not limited to suits like the one against the big chocolate companies. On the same day the Supreme Court handed down its ATS decision for Nestle, survivors filed a federal lawsuit under the TVPA against Visa and MindGeek for benefiting from sex trafficking on Pornhub. This latest case joins a chorus of TVPA suits focused on Pornhub’s operations. Other TVPA cases have taken aim at Twitter, Apple and various hotel chains.

As this landscape continues to evolve, there is increasing pressure on businesses to ensure their supply chains are free of forced labor and their workforces free of sex trafficking. We should view last week’s Supreme Court decision as a narrow ruling on the jurisdictional limits of the Alien Tort Statute, not a license for companies to knowingly operate with the use of slave labor. Instead, the court outlined a pathway for more human trafficking civil suits in the future. 

John Cotton Richmond is a partner with Dentons and the former U.S. Ambassador-at-Large to Monitor and Combat Trafficking in Persons.