Legal Roundup: Chocolate Companies Accused of Child Slavery, Unfinished Canadian Arena at the Center of Legal Dispute and More

The latest court filings and cases that will have an impact on the risk management and insurance industry.
By: | February 20, 2021

Chocolate Companies Sued Over Child Slavery

The Case: Human rights group International Rights Advocates sued seven chocolate makers over alleged child labor and human trafficking.

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The organization is representing eight men from Mali who say they were trafficked to Cote d’Ivoire to work in cocoa fields as kids. The suit names Nestle, Cargill, Mars, Mondelez, Hershey, Barry Callebaut and Olam as defendants.

Business Insider reports that a 2020 study by the University of Chicago found that “1.56 million children were used for cocoa production in Cote d’Ivoire and Ghana for the 2018 to 2019 growing season.”

In response, a Nestle spokesperson says that “this lawsuit does not advance the shared goal of ending child labor in the cocoa industry. Child labor is a complex, global problem, and tackling this issue is a shared responsibility. All stakeholders — including governments, NGOs, communities, and the broader cocoa industry — need to continue to address its root causes to have an impact,” according to Business Insider.

The publication reported similar statements from five of the seven companies.

Scorecard: The case has recently been filed and has not come to a resolution.

Takeaway: Supply chains are complex and businesses need to know what’s happening on the ground.

The chocolate companies and the World Cocoa Foundation have comprehensive plans for combating trafficking — but even the best laid plans can be thwarted.

McDonald’s Franchise Owner Alleges Systemic Racism

The Case: Herbert Washington, owner of 14 McDonald’s restaurants, claims the company steered him towards impoverished locations while white colleagues thrived in the suburbs.

He’s now sued the company in U.S. District Court.

Cleveland.com reports that Washington’s lawsuit says McDonalds is “relegating Black owners to the oldest stores in the toughest neighborhoods” which ensures “that Black franchisees would never achieve the levels of success that white franchisees could expect.”

That leads to Black franchisees spending more on operational costs. Cleveland.com reports that McDonald’s responded by saying it does not choose restaurant locations for franchisees and “this situation is the result of years of mismanagement by Mr. Washington, whose organization has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment.”

Scorecard: The case has recently been filed and has not reached a resolution.

Takeaway: This is not the first time McDonald’s has been accused of steering Black franchisees to its most challenging locations.

In September 2020, a group of 52 Black franchisees said the fast-food giant denied them the same opportunities as other franchisees and directed them to locations destined to fail due to high security costs and low sales.

McDonald’s said those allegations “fly in the face” of everything the organization stands for.

Woman Sues Husband’s Employer Over Her COVID Infection

The Case: Corby Kuciemba has sued Victory Woodworks, claiming that her COVID-19 infection started at the company’s workplace.

But she doesn’t work at Victory Woodworks — her husband does.

She claims that the “company’s failure to take basic precautions caused her husband Robert Kuciemba to contract the virus and unknowingly bring it home and infect his wife,” according to The Daily Mail. Court documents obtained by the publication reveal that both Corby and Robert were hospitalized with the virus.

Scorecard: The case has recently been filed and has not reached a resolution.

Takeaway: This appears to be the first case of someone suing their spouse’s employer over contracting the virus and should serve as a barometer for subsequent cases in the future.

Incomplete Canada Arena Now Subject of $17.3 Million Lawsuit

The Case: Carmacks, Yukon was supposed to be the site of a new 2,500-square-meter arena. Instead the project sits incomplete.

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That led the Yukon government to sue contractor Scott Design Build and insurer Echelon Financial Holdings for a combined $17.3 million.

The lawsuit “accuses the contractor of failing to complete the project, propose an amended work schedule or pay its subcontractors,” according to CBC.

The publication also reports that the lawsuit says Echelon Financial “was obligated to fix Scott Design Build’s work, find another contractor to take over the project or pay the cost of the bond should Yukon declare Scott Design Build in default. It failed to do so.”

Scorecard: The case has recently been filed and has not reached a resolution.

Takeaway: Construction risks are very real and insurers must be part of solving complex problems. &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

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