New Article: Abigail N. Burke, A Third-Party Beneficiary Theory of Corporate Liability for Labor Violations in International Supply Chains, 108(6) UVA L. Rev. (2022). Abstract below:
Large multinational corporations (“MNCs”) profit off their suppliers’ maintenance of sweatshop conditions in developing countries. Although some companies have responded to reputational pressure by taking nominal steps to improve working conditions, such as enacting supplier codes of conduct, those efforts have not led to significant change. Because voluntary efforts have thus far been ineffective, victims have pursued domestic litigation against MNCs to compensate their losses and encourage future reform. In the recent case of Nestlé USA, Inc. v. Doe, the U.S. Supreme Court cut off one popular avenue for such suits, the Alien Tort Statute, leaving plaintiffs with little ability to sue under federal law. State law tort claims, however, are a strong alternative. Plaintiffs can argue, and indeed have argued in one federal circuit court case, that MNCs have undertaken a duty of care to them as third-party beneficiaries of their supplier codes of conduct. This Note argues that plaintiffs making this claim should point to analogous cases in construction law, where courts have often found that design professionals overseeing a construction site have a duty of care towards their contractors’ employees. In analyzing construction law cases, this Note draws out five factors that have influenced courts to find liability. Future plaintiffs suing for labor violations should use these factors to show that MNCs owed them a duty of care under their supplier codes of conduct and may therefore be held liable for labor rights violations in their international supply chains.
Poverty Law 