Costco Slapped with Suit for ‘Slave Labor’ Shrimp

August 25, 2015
Triple Pundit

Costco is America’s third largest retailer, with more than 71 million members. That consumer support translates into considerable purchasing clout when it comes to the retail market’s most popular items. The store that first began in San Diego in the auspices of an abandoned airplane hangar in 1976 now has a footing in eight countries, and claims a yearly revenue in excess of $1 billion. It is also well respected for many of its business initiatives, which include higher-than-average hourly pay rates and benefits for its retail and warehouse staff.

But that mega-purchasing power has placed the company in a number of sticky situations lately. On August 19, three law firms filed for an injunction against Costco to stop it from selling seafood purchased from Thailand.

The firms — Howard Law Firm, Cotchett, Pitre & McCarthy, and Jenkins, Mulligan & Gabriel — represent plaintiff Monica Sud, who asserts that the prawns were harvested using slave labor.

In June of last year, the Guardian revealed the circuitous route that Thai seafood often takes to reach supermarket shelves in the U.S. That process, according to the Guardian’s six-month investigation, includes a well-established and often violent slave-trade industry that sells workers from point to point and uses torture and summary executions to force workers into submission.

The class-action suit that was launched last week alleges that Costco knowingly sold products from Thai distributors that source seafood from ships staffed with slave labor — and in fact, has been doing so for several years.

Its Maryland-based CP Foods shrimp provider is a subsidiary of Charoen Pokphand Foods PCL. The parent company stated last July that it was working with the Thai government to rid the use of slave labor from its suppliers. It also signed a declaration as part of the Thai Fishery Producers Coalition to stop illegal labor practices in the Thai fishing industry. Environmental and human rights groups such as the Environmental Justice Foundationstate the company not only is not doing enough, but is benefiting from the slave labor trade.

For its part, Costco has acknowledged the existence of slave labor in Thailand’s fishing industry and said that it “has been working with, and will continue to work with various stakeholders” concerning this issue. It has also offered to take back any products if customers are unhappy with their purchases.

This is far from the first time that the popular retail giant has been sued, although it may be the first time it has been sued for allegedly benefiting from slave labor. Still, Costco has had a rocky time recently with companies, staff and customers that have found an intriguing range of reasons to take it to court.

In January of this year the Ninth Circuit Court ruled in favor of Costco, after Swiss watch maker Omega sued Costco under the first-sale doctrine. Omega alleged that the company did not have authority to sell its watches in the U.S., which Costco apparently purchased legally through a second vendor.

Costco has also been sued a number of times for labor practices (including two class-actions) for alleged gender, religion and wage discrimination, and the warehouse store has been the subject of a bevy of petitions asking it to change its purchasing and consumer-relations practices. The online petitions have focused on issues ranging from the dearth of cage-free eggs in the cooler section, to the lack of infant changing tables in men’s washrooms.

The latter was initiated by Hollywood actor Ashton Kutcher, who observed: “[It’s] 2015, families are diverse, and it is an injustice to assume it’s only a woman’s job to handle changing [a] diaper.” Some 100,000 signatures later, Costco has yet to commit to the upgrade.

While it does seem like consumers do a pretty good job of staying on top of their favorite retail giant to ensure that it keeps to its ethical word, it’s interesting that the suit that Sud and the three legal firms launched against Costco and CP Foods didn’t name the slavery victims as plaintiffs. The suit also didn’t name the victims as the singular, intended benefactors of the award. Instead, it is Sud and other U.S. consumers who may have unwittingly purchased and eaten seafood tainted by slave labor and alleged execution practices that will reap any benefits from the suit. Oh, and the three legal firms — which, under U.S. class-action laws, stand to benefit for the time and labor they invest in the action. That oftentimes runs into the millions... (To read the entire article, please click HERE)