United States: Government Contractors Must Address Domestic Trafficking

Last Updated: February 4 2016
Article by Jayna Rust

Many Americans are unaware of human trafficking's pervasiveness, believing, if they have considered it at all, that trafficking takes place only in third-world countries. But human trafficking — which includes using force, fraud or coercion to induce people into labor or sexual exploitation — exists in the United States, including in industries such as shipbuilding and agriculture.

As it has done with other social ills, the government began to address domestic and international trafficking by inserting regulations into the federal contracting process. The Trafficking Victims Protection Reauthorization Act of 2003 required that executive contracts allow the government to terminate a contract if the contractor or a subcontractor engaged "in severe forms of trafficking in persons" during the contract term or used "forced labor" in performing the contract. In 2006, the Federal Acquisition Regulatory (FAR) Council implemented the requirement through an interim rule at FAR 52.222-50, "Combating Trafficking in Persons." The FAR Council issued the final rule in January 2009. President Obama later stepped up the government's response to trafficking. In September 2012, he issued Executive Order 13627, "Strengthening Protections against Trafficking in Persons in Federal Contracts." The order required the FAR Council to amend the FAR to provide the government with additional tools to implement and enforce anti-trafficking policies and to provide contractors with "additional clarity" on policy compliance. In 2015, the FAR Council finalized those amendments.

Although most of the revisions covered domestic contract work, some contractors have continued to treat human trafficking as strictly a foreign-based issue. Unfortunately, however, FAR-prohibited trafficking activities also exist within many domestic supply chains in which contractors work. Two cases decided in 2015 demonstrate this. Consequently, federal contractors should take a look at their own companies and domestic subcontracts when considering how to comply with the revised anti-trafficking provisions.

The regulatory revisions

The FAR's revised anti-trafficking provisions took effect on March 2, 2015. Among other things, these revisions expanded the list of prohibited activities, broadened the notification requirement, and notified contractors that violations would be recorded.

Prohibited acts. FAR 52.222-50 prohibits contractors from engaging in certain trafficking-related activities. The 2015 clause increased the number of activities to nine, up from three in the 2009 clause.1 The trafficking-related activities the FAR clause now prohibits are:

  1. Engaging in "severe forms of trafficking";
  2. Procuring commercial sex acts;
  3. Using forced labor;
  4. Destroying, concealing, confiscating or otherwise denying access by an employee to the employee's identity or immigration documents;
  5. Using misleading or fraudulent recruitment practices or using recruiters that do not comply with local laws;
  6. Charging employees recruitment fees;
  7. Failing to provide return transportation or pay return transportation costs at the employment's conclusion if the employee is not a national of the country in which he/she is working;
  8. Providing or arranging housing that fails to meet the host country housing and safety standards; and
  9. If required by law or contract, failing to provide an employment contract or other agreement or document, in writing.2

Broader obligation: The notification requirement. The FAR clause previously placed and continues to place multiple affirmative obligations on the contractor.3 The revised clause still requires the contractor to "immediately" notify the government of (a) actions taken against the contractor, an employee, a subcontractor or a subcontractor employee under the clause and (b) "information [the contractor] receives from any source ... that alleges" a contractor employee, subcontractor or subcontractor employee has engaged in activity violating the policy in the FAR clause. The revision added contractors' agents to the types of actors whose violations must be reported. It also requires that contractors notify the agency inspector general in addition to the contracting officer. The revision also clarified that contractors should report "credible information." The government has described this notification requirement as a "low threshold" and explained that "credible information" is "believable information."4

A new potential outcome: A negative FAPIIS record. Beyond Government remedies outlined in FAR 52.222-50(e), a prime contractor bears additional risks due to its use of subcontractors. As an initial matter, the government may find a prime contractor culpable for its subcontractors' acts.5 Additionally, the revised regulations require that when a contracting officer determines that there has been a FAR 52.222-50 violation, the contracting officer must post the violation to the prime's Federal Award Performance and Integrity Information System (FAPIIS) record.6 Subcontractor violations are posted to the prime's FAPIIS record as well.7 The prime may respond in FAPIIS with "any mitigating factors,"8 such as the fact that "The contractor had a trafficking in persons compliance plan or an awareness program at the time of the violation, was in compliance with the plan and has taken appropriate remedial actions for the violation, that may include reparation to victims for such violations."9

Labor trafficking in common U.S. government contracts supply chains

A contractor might encounter a trafficking-related activity in the United States that obligates it to notify the government of the activity or leads to a negative posting in the contractor's FAPIIS record. Indeed, as the 2015 cases discussed in this section show, such activities might occur in some contractors' domestic supply chains.

The federal government has recognized that some of its domestic supply chains are more susceptible to labor trafficking than others because they are labor intensive.10 These industries include food services, hospitality, domestic services, janitorial services, health care, driving services, construction, agriculture, forestry and facilities operations.11 Both of the 2015 cases are from these industries. Although the cases did not involve an alleged FAR-clause violation, they are relevant because they involved domestic supply chains that are susceptible to trafficking, even in federal contracts. Indeed, USAspending.gov shows that the company implicated in the Mississippi/Texas case may have received at least one government contract.12 Contractors should, therefore, consider these cases as examples of the activities that they may encounter in their domestic supply chains.

Mississippi/Texas: Shipbuilding and ship repair. Shipbuilding company Signal International LLC had a heightened need for workers after Hurricane Katrina. Using a labor recruiter and the H-2B guestworker program, it brought more than 500 Indian men to Pascagoula, Mississippi, and Orange, Texas.13 According to allegations, some of these men had paid as much as $20,000 in recruitment fees and had been promised U.S. residency due to their work.14 The men further had to agree to allow Signal to deduct $1,050 per month from their pay for transportation; food (often stale or molded); and accommodations, even if the men chose not to use the accommodations or eat the provided food.15 The accommodations consisted of one-room trailers, which housed up to 24 men each, had insufficient bathroom facilities and were accessible only through a single, guarded entrance.16 Workers and the Equal Employment Opportunity Commission (EEOC) filed suit against Signal. In 2015, a jury heard the first case, brought by five of the former workers. The jury awarded more than $12 million in total damages against Signal, including damages for Trafficking Victims Protection Act violations.17 In July the company filed for bankruptcy, and in November the court approved the Chapter 11 plan.

Ohio: Agriculture. In August 2015, the Federal Bureau of Investigation announced that two men had pleaded guilty to a labor-trafficking conspiracy after admitting to illegally bringing workers to the United States for "cleaning chicken coops, loading and unloading crates of chickens, de-beaking chickens and vaccinating chickens."18 The men had contracts with Trillium Farms and recruited young Guatemalans — some as young as 14 or 15 — to work on the egg farms by offering them good jobs and a chance to attend school in the United States.19 The men then smuggled the workers into the country and housed them in "dilapidated trailers" in Marion, Ohio.20 Some of these trailers lacked heat or running water, and some were "teeming with" rodents and bugs.21 Furthermore, the men "threatened workers with physical harm and withheld their paychecks in order to compel them to work."22

These cases are not the only recent examples of the Federal Government uncovering trafficking-related activities in domestic industries. For instance, in 2011 the EEOC filed a discrimination lawsuit against a labor contractor and eight farms in Hawaii and Washington — one of which was previously affiliated with a government contractor — alleging that the labor contractor charged recruitment fees, denied and delayed workers' pay, confiscated workers' passports and denied workers adequate food, water and living arrangements.23 Further discoveries of trafficking-related activities seem inevitable as the executive branch holds human-trafficking trainings across its agencies.24

Potential mitigation against the risks posed by trafficking in a contractor's domestic supply chain

The allegations in the above cases claimed that a company engaged in trafficking-related activities in the United States, including using forced labor, using misleading or fraudulent recruitment practices, charging recruitment fees and providing or arranging housing that failed to meet U.S. housing and safety standards. Any of these activities, standing alone, would violate FAR 52.222-50. Contractors should consider how to prevent these activities from occurring in their companies and supply chains and how to avoid negative ramifications if they are found in their supply chains.

Educate employees on the prohibited trafficking-related activities and the notification requirements. A contractor does not have the ability to "bury [its] head[] in the sand," as the U.S. Attorney described what may have happened in Ohio.25 Rather, it must notify the government of "any credible information" it receives that a subcontractor or an employee has engaged in a prohibited activity. Although the FAR clause requires contractors to "notify its employees and agents" of the prohibited activities, telling employees about the prohibitions may not be enough to ensure they understand how the violations may happen here in the United States or what the notification requirement obliges the company to do. Because of the severe consequences that can flow from a failure to understand the regulation, contractors should consider implementing an awareness program to train employees to recognize and report the activities prohibited by FAR 52.222-50.

Consider a compliance plan or awareness program to monitor and vet subcontractors. Having a compliance plan or awareness program and following it would be a "mitigating factor" for a contractor in the event the government finds a FAR 52.222-50 violation. Therefore, contractors should consider a plan or program to address the labor-trafficking risks in their domestic supply chains. As part of that plan or program, contractors should consider agency and industry guidance and requirements.26 Although the clause already requires contractors to include the substance of the clause in its subcontracts and agency contracts, contractors might also consider developing specific subcontract clauses or policies relevant to their industries. Whether a contractor decides to adopt and implement a compliance plan or awareness program will turn on a variety of factors, including the contractor's resources, the industries in which the contractor and its subcontractors operate, and the use of labor contractors. Nevertheless, it is a question that contractors should address before they are faced with a suspected violation.


With workers and federal agencies uncovering domestic trafficking-related activities in industries that serve the government, contractors should not ignore their domestic contracts, subcontracts and supply chains in considering how to comply with the FAR's anti-trafficking revisions. Simply put, contractors should ensure that their employees and subcontractors are well aware of the revised FAR prohibitions and obligations and should consider implementing a compliance plan or awareness program that covers their domestic supply chains.


[1] Compare 52.222-50, Combating Trafficking in Persons (Feb. 2009) with 52.222-50, Combating Trafficking in Persons (Mar. 2015). See also Federal Acquisition Regulation, Ending Trafficking in Persons, 78 Fed. Reg. 59317, 59318 (Sept. 26, 2013) (to be codified at 48 C.F.R. pts. 1, 2, 9, 12, 22, and 52).

[2] FAR 52.222-50(b).

[3] Other obligations include notifying employees and agents of the prohibitions; taking action if an employee, agent, or subcontractor violates the policy; having a compliance plan for certain foreign-performed contracts; including the clause's substance in subcontracts and contracts with agents; and cooperating with the agency investigators and protecting suspected victims or witnesses that are employees. FAR 52.222-50. The Department of Defense also revised its trafficking-related regulations, effective January 2015, but the revisions in that clause are not pertinent to this article's focus.

[4] Federal Acquisition Regulation; Ending Trafficking in Persons, 80 Fed. Reg. 4967, 4980 (Jan. 29, 2015) (to be codified at 48 C.F.R. pts. 1, 2, 9, 12, 22, 42, and 52).

[5] Id. at 4978.

[6] FAR 42.1503(h)(1)(v).

[7] FAR 9.104-6(b)(2).

[8] Id.

[9] FAR 52.222-50(f)(1).

[10] See Department of Defense, CTIP Program Management Office, Standard Curriculum Toolkit (2015), at 2-3.

[11]Id.; Verité, Strengthening Protections against Trafficking in Persons in Federal and Corporate Supply Chains (2015) (report provided under a Department of State contract). The 2012 Executive Order ordered a task force to identify domestic contracts with a history of trafficking-related activities and to notify agencies of those designated industries. Once that occurs, agencies will be required to develop and publish guidance and compliance requirements for those industries. The lack of that guidance and requirements does not, however, change the FAR obligations and consequences.

[12] See Contract No. DOCQA133009SE1110.

[13] Complaint & Jury Trial Request at 5, Equal Emp't Opportunity Comm'n v. Signal Int'l, LLC, No. 1:11-cv-00179-LG-RHW (S.D. Miss. Apr. 20, 2011) [hereinafter Signal EEOC Complaint].

[14] Michael Lipkin, Indian Guest Workers Win $14M in Signal Trafficking Case, Law360 (Feb. 18, 2015 10:20 PM).

[15] Signal EEOC Complaint at 5-6.

[16] Id. at 6-7.

[17] Minute Entry, David v. Signal Int'l, LLC, No. 2:08-cv-01220-SM-DEK (E.D. La. Feb. 18, 2015).

[18] Press Release, Federal Bureau of Investigation, Two Defendants Plead Guilty to Forced Labor Scheme That Exploited Guatemalan Migrants at Ohio Egg Farms (Aug. 25, 2015), [hereinafter FBI Press Release].

[19] Id.

[20] Id.

[21] Holly Zachariah, Workers Trafficked for Ohio Egg Farms Had Little Contact, Lived in Poverty, The Columbus Dispatch, July 12, 2015, [hereinafter Zachariah Article].

[22] FBI Press Release.

[23] Press Release, Equal Employment Opportunity Comm'n, Judge Approves $2.4 Million EEOC Settlement with Four Hawaii Farms for over 500 Thai Farmworkers (Sept. 5, 2014).

[24] Press Release, The White House, FACT SHEET: President's Interagency Task Force to Monitor and Combat Trafficking in Persons (Jan. 5, 2016); Lisa Ferdinando, DoD: Training, Awareness Critical in Human Trafficking Fight, DoD News, Jan. 15, 2016.

[25] Zachariah Article.

[26] See note 11.

(This article originally appeared on Law360 on January 21, 2016.)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.