GUEST POST BY BRANDON SLOANE
A District of Massachusetts court decision from November of last year has helped to clarify the liability that employers can face for illegal sex trafficking that occurs on company property. Ricchio v. Bijal, inc. (Civil Action No. 15-13519-FDS). In Ricchio, the victim Lisa Ricchio was kidnapped by defendant Clark McLean, and was held for several days as a captive at the Shangri-La Motel in Seekonk, Massachusetts where McLean stayed as a guest. The Shangri-La is owned by defendant Bijal, Inc., and was operated by defendants Ashvin and Sima Patel. (collectively known as “Bijal”). Ricchio was suing for violations under the Victims of Trafficking and Violence Protection Act of 2000 (“TVPA”), which deals with criminal violations of sex trafficking, and the Trafficking Victims Protection Reauthorization Act of 2003 (“TVPRA”), which deals with civil violations.
The crux of the case involves the third-party defendant Peerless Insurance Company (“Peerless”), which issued an insurance policy to indemnify Bijal against injuries sustained on motel property. After Ricchio’s case was filed, Peerless attempted to have the Court intervene to eliminate their obligation to pay any damages resulting from Ricchio’s injuries. This was in part because the insurance policy excluded from coverage injuries arising out of a criminal act committed by the insured. To put it more simply, Peerless asserted that because Bijal was guilty of criminal violations under the TVPA, they had no obligation to pay insurance.
The TVPA establishes criminal liability for individuals and enterprises that provide forced labor and sex trafficking, and also for those who knowingly benefit from participation in a venture involved in such activity. This “knowingly benefitting” language is a way to assert liability against an employer who allows such activity to occur within his business. Peerless’s argument here is that because Bijal rented a room to McLean while he was engaged in trafficking, Bijal profited off this activity and thus and “knowingly benefitted” from it.
The Court disagreed with the reasoning set forth by Peerless however, and found that Bijal was not guilty of criminal violations under the TVPA. The TVPA requires that the employer benefit from the trafficking “knowingly or in reckless disregard” of the fact that the trafficking is occurring. The court found no such evidence that Bijal had knowledge or reckless disregard of such knowledge that McLean was trafficking at the motel, so they found it improper to consider this a violation of the TVPA.
Instead, the Court found that Bijal could be found liable for civil violations under the TVPRA. The TVPRA has a much lower bar for liability than the TVPA. So long as one “knowingly benefit[s]… from participation in a venture which that person knew or should have known” had engaged in trafficking, a violation of the TVPRA can properly be found. The phrase “should have known” is one that the court considered “common language used in describing an objective standard of negligence”. In essence, the court was saying that an employer will be held to a negligence standard under the TVPRA when there is found to be human trafficking occurring on its premises.
Because the case focused more on Peerless’s obligations to pay damages as an insurer, the court did not definitely decide whether Bijal’s actions violated the TVPRA. But its statement that an employer can be civilly liable for negligently allowing human trafficking to occur on its premises so long as that employer benefits from such activity is significant. The holding placed a burden onto business owners to thoroughly investigate its premises, any customers on its premises, and its employees to make sure it does not overlook any trafficking violations. Other hospitality businesses, such as massage parlors, bars, casinos, could just as easily be exposed to liability for harboring trafficking victims and benefitting from it in the form of customers paying for services at the establishment. In addition, any sort of transportation company (shuttles, taxis, buses, etc.) could also unwittingly transport trafficking victims if their drivers are not wary of suspicious-looking passengers.
While this may not feel like a huge issue that is plaguing America, according to the National Human Trafficking Hotline (https://humantraffickinghotline.org/states), from 2017 through the middle of 2019 there were over 24,000 reported cases of human trafficking in the United States. To make matters worse, this number does not account for the number of contacts made to the Hotline which did not develop into reported cases. Including these contacts, from 2017-2019 there were nearly 100,000 instances of the hotline being contacted regarding a potential human trafficking violation occurring. This is a real problem that employers, especially those involved in hospitality and transportation, need to be aware of.
With plaintiff attorneys needing only to prove a negligence standard of causation to assert liability under the TVPRA, it seems likely that the amount of civil cases being filed in this area is bound to increase. One can only hope that having a very real threat of liability hanging over the heads of employers will create an incentive to improve the oversight of their businesses such that trafficking will no longer be able to occur under their watch.
Brandon Sloane is a third-year student at Boston College Law School. He aspires to become a Massachusetts labor & employment attorney after graduation.
Fine print: the above is the work of the author only. The above is not legal advice, but general information. I cannot provide legal advice without a written fee agreement and a full review of your legal matter.