Signal International Settles Labor Suit After Filing for Bankrupcty

By Kathy Finn

NEW ORLEANS, July 14 (Reuters) – Signal International will pay $20 million to settle lawsuits alleging fraud and labor trafficking by the Alabama oil rig repair company, which brought hundreds of Indian men to work on the Gulf Coast after Hurricane Katrina, attorneys for the plaintiffs said on Tuesday.

The settlement, which included an apology by the company to about 200 guest workers involved in the suits, must win the approval by a bankruptcy court in Delaware, where Signal filed for Chapter 11 protection on Sunday.

“These workers have waited seven long years for justice,” Jim Knoepp, deputy legal director for the Southern Poverty Law Center, said in a prepared statement, noting that the Southern Poverty Law Center spearheaded the litigation.

“This agreement and apology from the company will allow the workers to finally move on with their lives,” he said.

The settlement enables the company to resolve 11 lawsuits still pending after the first five plaintiffs in the litigation won a federal verdict from Signal in February. The jury in that case awarded $14 million in damages to the Indian guest workers.

All the plaintiffs, including the initial five, will share in $20 million settlement in lieu of the earlier damage award, a spokeswoman for the plaintiffs said.

After the four-week trial in New Orleans in February, the jury found that Signal had recruited hundreds of Indian men under the U.S. guest worker program to repair oil rigs and facilities damaged by Hurricane Katrina in 2005.

The workers paid $10,000 apiece to recruiters and were promised good jobs and permanent U.S. residency for their families. After arriving at Signal shipyards in Pascagoula, Mississippi, they discovered that they would not receive promised residency documents.

Signal also charged the men $1,050 a month to live in guarded labor camps in inhumane conditions, the jury found.

An economist who reviewed Signal’s records for the plaintiffs estimated the company saved more than $8 million by hiring the Indian workers.

“This agreement will ensure some compensation for these workers who only sought a better life when they took these jobs,” said attorney Alan Howard, SPLC board chairman.

Attorneys for Signal could not be reached for comment. (Editing By Frank McGurty and Diane Craft)

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