Signal Settlement to Indian Guest Workers Reduced to $5 Million

Signal Settlement to Indian Guest Workers Reduced to $5 Million

Signal International, LLC will pay about $5 million to settle a federal race discrimination lawsuit that has been pending for four years, the U.S. Equal Employment Opportunity Commission announced Dec. 18.

The final amount – approved by a bankruptcy court – significantly reduces a $20 million settlement agreed to last July by the shipping giant and 476 guest workers from India, who had filed 11 suits against the company for forcing them to live and work in harsh, brutish conditions ( Signal declared Chapter 11 bankruptcy proceedings on the same evening it agreed to the settlement for all 11 lawsuits and an EEOC complaint.

The settlement establishes a claims process and ensures that all aggrieved individuals included in the litigation may receive relief in spite of the bankruptcy proceedings, noted the EEOC.

Commenting on the settlement, David Lopez, EEOC general counsel, stated: “This case was challenging and hard-fought, but shows that EEOC will fight for the right of all workers to be free from discriminatory working conditions.”

“This case should remind companies that EEOC remains vigilant to prevent the exploitation of immigrant and vulnerable workers. We are especially grateful for the cooperation of the Southern Poverty Law Center during the investigation and prosecution of this egregious case,” he said.

Delner Franklin-Thomas, district director for EEOC’s Birmingham District, said in a press statement: “This lawsuit sends a powerful message that an employer must treat all workers equally without regard to their national origin or race.”

“We are very pleased Signal has accepted responsibility for its wrongdoing and that these workers, who have waited 10 long years for justice, will now receive compensation and can move on with their lives. In many cases, these men paid thousands of dollars to come to the United States, only to be subjected to inhumane conditions and exploitation after they arrived,” said Franklin-Thomas.

“We’re getting towards the end of a very long struggle. The workers will finally get the justice they deserve and we’re proud to represent them,” Jim Knoepp, deputy legal director at the Southern Poverty Law Center, told India-West shortly after the July 12 settlement was announced.

The funds for the settlement would be based on the assets from the sale of Signal International’s facility in Orange, Texas, which sold last year for an estimated $30 million, according to Knoepp.

The workers’ immigration status or their current country of residence – the U.S. or India – will not affect their ability to participate in the settlement if they were claimants in any of the lawsuits, he said. Knoepp was not available for comment on the reduced amount of the settlement.

When they arrived in the U.S. in 2006, the 500 Indian welders and pipe-fitters – some of whom paid recruiters more than $20,000 for the opportunity to work in the country – reportedly were forced to live in squalid conditions, sleeping in small, cramped quarters and receiving sub-standard food. Costs for boarding and lodging — $1,050 per month — were deducted from the guest workers’ paychecks. The workers received $18 per hour.

Dewan Consulting was used by Signal in India to hire guest workers primarily from Kerala; recruiters charged fees of $15,000 to $20,000, promising the workers they would receive a green card and eventually be able to bring their families to reside permanently in the U.S.

Indian guest workers told this publication that they were forced to live and work in slave-like conditions and were not allowed to leave the facility to find accommodation elsewhere.

The immigrant workers were recruited to assist in cleanup efforts in the wake of recent natural disasters, including Hurricane Katrina and Hurricane Rita.

Senior trial attorney Gerald Miller said the EEOC encourages all Indian H-2B workers formerly employed by Signal International to immediately contact the EEOC by calling 205-212-2060, or by e-mail at to verify their contact information and meet claim deadlines in order to receive claim forms to request monetary compensation from the settlement fund.

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