DOL Claims Auto Manufacturer Is Jointly Liable for Child Labor Violations Committed by Its Supplier

June 5, 2024

What's New

The U.S. Department of Labor recently filed a lawsuit alleging that an auto manufacturer is jointly liable for child labor violations committed by one of its suppliers and the supplier’s staffing company. The case is Su v. Hyundai Motor Manufacturing Alabama, filed May 30, 2024, in the U.S. District Court for the Middle District of Alabama.

DOL’s complaint alleges that a 13-year-old girl and other teenagers worked up to 60 hours per week on an assembly line operated by Hyundai’s supplier, operating machinery that folded metal sheets into automobile body parts.

DOL argues that Hyundai is so interrelated with the supplier (SMART Alabama, LLC) that it is an integrated employer for liability purposes under the Fair Labor Standards Act (FLSA). In the alternative, DOL argues that the manufacturer, supplier, and staffing company (Best Practice Service, LLP) are collectively joint employers and thus jointly liable.

What It Means

DOL’s stance in this case suggests that it is reviving the controversial fissured workplace theory that it supported during the Obama administration, at least in the context of alleged child labor violations. The fissured workplace approach holds businesses responsible for the labor standards of companies with whom they interact, such as subcontractors and franchisees. It is likely that DOL will pursue similar theories in other cases.

What You Should Do

CWC will monitor future developments on this issue, so follow us for updates.

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DOL Claims Auto Manufacturer Is Jointly Liable for Child Labor Violations Committed by Its Supplier

Jun 5, 2024 – On May 30, 2024, DOL sued Hyundai, alleging joint liability for child labor violations by a supplier and staffing firm, marking a revival of the “fissured workplace” theory in enforcing labor standards under the FLSA.

DOL Finalizes Rule Making It Harder To Show Worker Is Independent Contractor

Jan 16, 2024 – The Labor Department has revived a contentious standard for determining worker classification under the Fair Labor Standards Act, increasing risks for employers who misclassify.

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Mar 12, 2024 – A federal court has vacated the NLRB's 2023 joint employer rule, restoring the 2020 version. The court ruled the 2023 rule was too broad, which benefits businesses by making it harder to establish joint employer status.

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May 13, 2026 – DOL’s proposed joint employer rule would explain how joint liability is determined under the FLSA, MSPA, and FMLA by defining vertical and horizontal employment.

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Oct 7, 2025 – A new DOL opinion letter finds that a restaurant and a members’ club located inside the same hotel – and which had common spaces and services, ownership, workers, pay rates, and coordinated work shifts – were joint employers under the FLSA.

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