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US – Jury Orders Staffing Firm to Pay $4.5 million

December 20 2012

A Los Angeles-based recruiting firm, Universal Placement International Inc., and owner Lourdes Navarro were ordered to pay $4.5 million to 350 teachers from the Philippines following a two-week trial, the Southern Poverty Law Center reported. 

The teachers were brought to teach in Louisiana public schools and forced into exploitative contracts, according to the Southern Poverty Law Center. The teachers were brought to the U.S. in 2007 on the H-1B visa program and most teachers paid the placement service about $16,000 to obtain their jobs, according to the organization.

Nearly all the teachers had to borrow money to pay the recruiting fees, according to the Southern Poverty Law Center. The recruiter referred the teachers to private lenders who charged 3 percent to 5 percent interest per month, and the recruiters confiscated the teachers’ passports and visas until they were paid.

In addition, the teachers were forced to sign away an additional 10 percent of the salaries they would earn during their second year of teaching, according to the Southern Poverty Law Center. Those who resisted were threatened with being sent home and losing the thousands of dollars they had already paid.

“The jury sent a clear message that exploitive and abusive business practices involving federal guest workers will not be tolerated,” said Southern Poverty Law Center Legal Director Mary Bauer. “This decision puts unscrupulous recruitment agencies on notice that human beings — regardless of citizenship status – cannot be forced into contracts that require them to pay illegal fees.” 

However, the law firm representing Navarro and her company said the jury found the defendants did not violate the Trafficking Victims Protection Act, a central tenet of the case. In addition, the firm said the jury rejected punitive damages in the case.  The defense law firm, Hernandez, Schaedel & Associates, also reported the teachers initially sought $15 million.

“From the beginning, the plaintiffs characterized this case as a trafficking lawsuit, and we never believed that the teachers were trafficked. They earn more than $40,000 a year, live and travel freely in the United States, and have remained in the United States long after any obligations that were ever due to my client have been satisfied,” said Don Hernandez, a defense attorney in the case. “They’ve never been trafficking victims and I think it’s an affront to legitimate trafficking victims.” 

The jury did find the defendant guilty of negligent omissions because a written fee schedule was not distributed to the job seekers, according to Hernandez, and awarded the plaintiffs $4.5 million of the $17 million sought. However, he expects that amount to be significantly reduced.

“A large portion is going to be reduced because those placement fees have already been ordered returned by a Louisiana agency and you cannot get the same fees twice,” Hernandez said.

The Southern Poverty Law Center, the American Federation of Teachers and the law firm of Covington & Burling LLP represented the teachers in the lawsuit.

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