In 2014, U.S.-based company Eisenmann was selected to act as a general contractor for a large-scale construction project at a Tesla facility in Fremont, California. Eisenmann contracted with Slovenia-based construction company Vuzem to provide labor for the project. Ex-Vuzem employees, all residents of Bosnia and Herzegovina, Slovenia, or Croatia, have now alleged several violations of federal and California labor law against Eisenmann and Tesla.
All of the ex-workers' claims were dismissed as untimely except for a lone claim that "Vuzem used coercive methods to obtain Plaintiffs' labor, that Eisenmann and Tesla benefited from a venture that relied on Plaintiffs' coerced labor, and that Eisenmann and Tesla knew or should have known about Plaintiffs' coerced labor" in violation of 18 U.S.C. § 1595(a).
Eisenmann and Tesla argued that the treatment of Vuzem employees had no direct link to any benefit provided to either company. The Court defined the statute broadly, and ruled that the link between the labor violations and Tesla's benefit did not have to be direct for liability to attach. The Court also ruled that the Plaintiffs had plausibly alleged that Tesla and Eisenmann knew or should have known about the coerced labor. Plaintiffs will be able to proceed on their remaining claim. The ruling has obvious ramifications for the commercial construction industry, effectively placing a duty on both general contractors and project clients, depending on the client's involvement....
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