$20-million settlement reached in guest-worker lawsuits

An Alabama marine construction company has agreed to pay $20 million to more than 200 guest workers from India who alleged they were kept in labor camps so squalid and crowded that one worker attempted suicide.

The settlement, announced Tuesday, resolves 11 lawsuits against Signal International filed in Alabama, Texas and Louisiana. The company has declared bankruptcy, so the settlement must be approved in bankruptcy court.

Signal International brought guest workers to Pascagoula, Miss., and other sites in 2006 and 2007 to repair oil rigs and other heavy machinery in the Gulf of Mexico that were damaged during Hurricane Katrina.

The men were trained in India as welders and pipe fitters, and came to the U.S. on promises that they would get green cards and permanent U.S. residency, according to the lawsuits filed by the workers, who put their families deep in debt to reach the U.S.

They received no green cards. Instead, the lawsuits alleged, they were confined to guarded camps, where 24 men were crammed into living spaces the size of a double-wide trailer.

According to the Southern Poverty Law Center, which pursued the case on behalf of some of the workers, Signal International forced the men to pay $35 per day to live in the labor camp and sent security guards to detain workers who complained.

In court, Signal International argued that the company was the victim of an unscrupulous international recruiting firm that made hollow promises to the workers.

In February, a New Orleans jury rejected that claim and found for five Indian guest workers, delivering a $14-million verdict against Signal International. The American Civil Liberties Union, which represented those workers, said it was the largest amount ever awarded by a jury in a labor-trafficking case. 

Jurors found that Signal International was liable for labor trafficking, fraud, racketeering and one case of false imprisonment.

Signal International filed for Chapter 11 bankruptcy protection on Monday.

The company has agreed to apologize to the workers.

“They persevered and won justice,” said Alan Howard, chairman of the Southern Poverty Law Center board, in a statement. “This agreement sends a powerful message that guest workers have rights and cannot be exploited.”

Signal International did not return calls from the Los Angeles Times seeking comment. The company operates a ship-building facility in Orange, Texas, and repair yards in Pascagoula.

Headquartered in Mobile, Ala., the company employs 700 workers in Pascagoula and about 250 in Mobile.

Twitter: @nigelduara

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