Hunton Employment & Labor Perspectives

Joint-employer liability has long fallen short of what unions and labor advocates seek: direct liability for manufacturers, contractors, and brands, which they view as necessary to drive meaningful change.  In recent years, activists have adopted a layered litigation strategy, invoking laws unrelated to employment, including consumer protection, unfair competition, and anti-trafficking statutes in the United States and abroad, to impose liability on upstream entities for the conduct of downstream employers.  These theories rely on independent statutory duties arising from the company’s own conduct, representations, or knowledge.  The focus shifts from who controls workers to who benefits from the alleged mistreatment.

For example, where joint-employer theory does not support direct liability for wage-and-hour violations, those same violations may nonetheless support an unfair competition claim.  Likewise, where labor law charges do not reach a franchisor, the franchisor’s representations about supply-chain oversight may create exposure under consumer protection laws. See also Supply-Chain Wage Theft as Unfair Method of Competition.  Forced labor presents an even greater financial and reputational risk, given the potential for creative advocates to use the malleability of the ILO definition and its indicators to craft expansive theories reaching ordinary workplace conditions — what one author has critically termed “exploitation creep.”  Exploitation Creep and the Unmaking of Human Trafficking Law.

The multiplicity of claims creates a distinct challenge.  Conduct once addressed solely through labor and employment law may now give rise to claims under a range of legal frameworks across jurisdictions. This compounding of risk is especially powerful in union corporate campaigns, global strategic campaigns, and supply-chain activism. The opportunity aligns with the campaign litigation strategy set forth in the seminal SEIU Contract Campaign Manual, which devotes an entire section to the strategic use of litigation.  An international union vice-president captured the logic years ago: “you don’t have to be successful in litigation . . . You have to create risk.”  The value of “strategic human rights litigation” lies in its asymmetry: a target must prevail everywhere; plaintiffs need prevail only once.

Whether these theories ultimately succeed remains uncertain.  Even where claims fail, statutory regimes change the litigation landscape by increasing the number of potential claims, the cost of defending them, and the financial and reputational consequences of being targeted.  For companies, the question is no longer solely whether they qualify as joint employers, but whether their own policies, public representations, and oversight practices give rise to compounding liability across claims, jurisdictions, and forums.

The challenge for companies is how to advance corporate responsibility commitments without creating new liability.  As plaintiffs expand liability theories, companies will need sophisticated litigation strategies and risk-management responses calibrated to the evolving landscape. Against that backdrop, some considerations:

• Be precise in policies, codes, and public statements; avoid broad commitments that exceed what the company can define, verify, or enforce.
• Maintain a clear distinction between setting standards and directing methods and reassess whether oversight practices have become unduly operational.
• When invoking external standards or human-rights frameworks, translate general principles into objective criteria and defined thresholds.