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Bankrupt shipbuilder to pay $5 million for mistreating guest workers


A now-bankrupt ship building and repair company will pay about $5 million to settle an Equal Employment Opportunity Commission race and national origin discrimination case involving 476 Indian guest workers who were subjected to harsh living conditions.

The agency said Friday that Mobile, Alabama-based Signal International L.L.C. had recruited workers from India through the federal H-2B guest worker program to work at its facilities in Texas and Mississippi in the aftermath of hurricanes Katrina and Rita.

The EEOC charged that Signal subjected the men to unfavorable working conditions and forced them to pay $1,050 a month to live in overcrowded, unsanitary, guarded camps. The EEOC said as many as 24 men were forced to live in containers the size of a double-wide trailer, while non-Indian workers were not required to live in these camps.

The EEOC said after Signal filed for Chapter 11 bankruptcy in Delaware in July, settlement of the EEOC’s lawsuit and 11 related suits became subject to bankruptcy court approval.

It said the settlement establishes a claims process and ensures that individuals included in the litigation may receive relief in spite of the bankruptcy proceedings.

The EEOC said Signal’s CEO has issued a statement acknowledging the company’s wrongdoing and apologizing for its treatment of the guest workers.

David Lopez, general counsel of EEOC, said in the statement, “This case was challenging and hard-fought, but shows that EEOC will fight for the right of all workers to be free from discriminatory working conditions.

“This case should remind companies that EEOC remains vigilant to prevent the exploitation of immigrant and vulnerable workers. We are especially grateful for the cooperation of the Southern Poverty Law Center during the investigation and prosecution of this egregious case and to the U.S. Attorney for Delaware for assistance during the bankruptcy proceedings.”

A Signal spokesman could not be reached for comment.

Separately, it was announced in July that Signal International would pay $20 million to settle lawsuits alleging fraud and labor trafficking in connection with Indian guest workers who were brought in to work on the Gulf Coast after Hurricane Katrina.