Overview
Across the United States, two converging trends related to labor and sex trafficking are creating growing legal, reputational and operational risks for domestic and multinational enterprises operating in or sourcing from the US. One trend surrounds the attention to, and perhaps growth of, human trafficking in the US in ways that directly and indirectly connect to business. A second involves heightened attention to trafficking by legislators, who are adopting new laws at a dizzying pace; prosecutors, who are pursuing an increasing load of criminal actions; and NGOs and plaintiffs' lawyers, who increasingly filing civil lawsuits under the Trafficking Protection Victims Reauthorization Act (TVPRA) and other laws. The dual trends make it paramount for companies to conduct tailored and focused due diligence, both to avoid contributing or being linked to negative impacts under the UN Guiding Principles on Business and Human Rights (UNGPs), and to reduce escalating business-related risks.
The US Trafficking Problem
Reliable estimates of individuals trafficked in the US are elusive. Trafficking has been reported across all 50 states, with particular clusters in Nevada, Texas, Georgia, Florida, California, Michigan, Ohio, North Carolina and New York. Each year, there are reports regarding thousands of potential victims – for instance, in 2023, there were some 17,000 potential victims associated with report to the National Human Trafficking hotline. Many individuals pass through the Southern Border, with estimates that 20% of trafficking victims in the US pass through Texas. Nationally, estimates of trafficking incidents are in the hundreds of thousands, with most incidents involving labor trafficking but most profits derived from sex trafficking.
Labor Trafficking. Labor trafficking affects a vast array of industries. Mentioned most frequently are agriculture, fishing, construction, gas stations, grocery stores, car dealerships, manufacturing, hotels, janitorial services, nursing homes, restaurants and bars, beauty salons, landscaping and carnivals. Recent studies help illustrate the prevalence of trafficking in the private sector in the US. A recent survey focusing on construction workers in Houston reported that 22% of those surveyed experienced labor trafficking in construction in their lifetimes, 13% had experienced it in the prior 2 years, and 4% were experiencing it at the time of the survey. A multi-university study concluded that forced labor in US agriculture is "pervasive," and "animal-based proteins, processed fruits and vegetables, and discretionary foods are major contributors to forced labor risk and that 62% of total forced labour risk stems from domestic production or processing." Another university publication concluded, "U.S. agriculture has a forced-labor problem.” Likewise, an expose from the Pulitzer Center focused on the frequency of trafficking among health care providers, and the vulnerability of migrant nurses. With substantial adjustments to US immigration policy and reports of labor shortages, trafficking risks may increase.
Sex Trafficking. Sex trafficking in the US is also widespread. NGO data estimates that between 15,000 and 50,000 women and children are forced into sexual slavery in the US every year. It references total estimates as high as 300,000. The most typical venues include hotels and motels. Major sporting events such as the Super Bowl and World Cup also bring significant trafficking risks. Those risks can be substantially amplified through online platforms and payment processes, as the internet has made it easier for sex traffickers to exploit victims and connect with buyers, traffickers often use social media and advertising, hobby boards, and dating sites, and payments often are made through mobile apps.
The Legal Response
The increasing visibility of trafficking risks has not escaped prosecutors and Congress. According to the Bureau of Justice Statistics, the number of individuals prosecuted and convicted for human trafficking in the US has doubled over the last decade. In some instances, individuals and entities have been prosecuted together. At the federal level, the TVPRA has criminal and civil components, and allows individuals to bring actions against perpetrators that knowingly benefit, or attempt to benefit, from participating in a venture that the perpetrator knows or should know relied on sex or labor trafficking. Hundreds of lawsuits have been filed under the TVPRA, against businesses in the hospitality, transportation, technology, sports and entertainment, manufacturing, staffing and other sectors. Indeed, in 2022, a total of 139 cases were filed under the TVPRA, and in 2023, there were over 40 human trafficking lawsuits filed against hotels and hotel chains alone, with thousands of victims included in pending lawsuits. While some cases have focused on overseas conduct, the majority have alleged violations based on activities within the US. A variety of bipartisan legislation also has been introduced in Congress to strengthen relevant protections against trafficking in a variety of respects, ranging from protecting victims, to enhanced signage, to enforcement measures, to strategies focusing on recruitment through social media platforms and other online services, to federal contracting.
Across the country, every state has anti-trafficking laws on the books, many modeled on the TVPRA and covering civil and criminal relief against individuals and corporations. In light of recent reports on the prevalence of trafficking, state legislators across the country are introducing measures to strengthen anti-trafficking efforts. For instance, in Michigan, new laws will allow hearsay statements from trafficking survivors to be admitted in court, and relevant prior acts to be used as evidence in human trafficking cases. Utah, California and Florida recently adopted laws that increase criminal penalties for sex and labor trafficking offenses; indeed, Florida adopted another law focusing on the use of technology in trafficking, and Utah has declared a "war" on human trafficking. New York recently announced similar efforts. Alaska is considering a law to create a permanent Council on Human and Sex Trafficking, Hawaii passed a bill to enhance the ability of survivors to file civil actions against companies and others and extend the statute of limitations, and Alabama introduced a bill to criminalize support for trafficking and increase restitution.
Recent prosecutions and lawsuits illustrate the scope of the risks and impacts: a prosecution against alleged individuals, followed by a class action, related to a Georgia farm allegedly involved in a $200 million international forced-labor scheme involving federal H-2A visas; another prosecution in Georgia involving a flooring manufacturing plant; a case in California against a garment factory; a $4.9 TVPRA million settlement involving Colombian nationals who worked as housekeepers in luxury hotels; a prosecution in New York against a construction company owner; a TVPRA case against sheepherders in California and another against a farm in Michigan; and a case by a state attorney general against an online platform under state deceptive trade theories.
The Implications for Business
The implications for domestic and multinational companies are significant. Given the prevalence of labor and sex trafficking in the US, multinational companies may be connected to trafficking in their value chains in various ways – whether because a company sources goods from suppliers or sells to customers that rely on trafficked labor in their operations, contracts with service providers that exploit trafficked labor, operates under a franchise model where franchises maintain trafficked labor or host sex trafficking, or facilitates sex trafficking through online messaging or images.
Those risks and others can create substantial negative legal, reputational and operational consequences for companies. Legal liability can accrue under the TVPRA, the body of ever-expanding state laws, or greenwashing theories – where companies are accused of making public commitments inconsistent with actual practices. Companies also may have due diligence and reporting obligations regarding trafficking risks and impacts under growing sustainability and supply-chain laws in the European Union, Canada and elsewhere.
Trafficking within supply chains may impact access to goods and services, and within a company’s operations may impact its customer bases. Connections to trafficking also implicates a company’s responsibility to respect human rights under the UNGPs, and its reputation among a range of internal and external stakeholders. As multinational and domestic companies evaluate their due diligence strategies and approaches in a changing global marketplace, reviewing and addressing trafficking risks in the US should be high on the list of priorities.
