New Orleans suit over H-2B guest workers

The Wall Street Journal (link not available) reported on a suit against Decatur Hotels, the largest pre-Katrina hotel firm in the City, alleging unfair and illegal exploitation of workers it had recruited to work.
The problems we hear about labor shortages in New Orleans and the Katrina cleanup are consistent with most post-disaster recoveries of large size. I have posted several times before about worker injury and work rights among cleanup workers for Katrina. One of the studies was by The New Orleans Workers Justice Coalition.

The lawsuit filed yesterday in federal court in Louisiana against closely held Decatur Hotels and Chief Executive F. Patrick Quinn III touches on the hot-button issue of finding workers for the Gulf Coast region following last year’s devastating Hurricane Katrina. That debate centers on whether companies are hiring foreign workers, mainly Latino migrants, because they are cheaper or because there is a dearth of U.S. residents available to take blue-collar jobs. Many illegal immigrants, mainly from Latin America, have been flocking to New Orleans to do cleanup work.

The lawsuit, which seeks class-action status, involves an unusual move by Decatur to recruit foreign workers under a government program, known as the H-2B guest-worker program. To qualify for the program, employers must prove to the government that they cannot find U.S. residents to fill the jobs in question. The program is designed to hire foreign workers to do temporary work in nonagricultural areas, often on a seasonal basis.

Several other companies in the region have also hired foreign workers under the guest-worker scheme after winning approval from the Labor Department, according to worker-rights organizations. About 300 foreign workers are believed to have been hired early this year by Decatur to do housekeeping, maintenance and other work at its properties, according to officials at the National Immigration Law Center, a Washington-based advocacy group involved in the case. In the lawsuit, 82 workers from Bolivia, Peru and the Dominican Republic allege that Decatur and Mr. Quinn violated the Fair Labor Standards Act by failing to reimburse them for fees paid to labor recruiters working as agents of the hotel chain abroad, as well as travel expenses and visa fees adding up to as much as $5,000. The lawsuit says Decatur should have made those payments in their first week of work to comply with labor law. The lawsuit further states that the company exploited the workers’ indebtedness and lack of familiarity with U.S. laws to violate their legal rights.


The lawsuit also alleges that the workers’ high level of personal debt stemming from their entry to the U.S. has left them in “virtual debt peonage,” since they can neither make enough money to pay off their debt by working for the hotel chain nor, under the provisions of their visas, can they work for any other employer to earn additional money. The suit also states that “in recent weeks their predicament has been complicated … by failure to offer them 40 hours of work each week.”.
“The Department of Labor takes any allegation of violations of federal labor law very seriously,” said a spokesman, adding that the agency has stepped up enforcement in the Gulf Coast region since the hurricane with the deployment of Spanish-speaking investigators. That has resulted in recovering nearly $1.5 million in back wages for workers, he said.
The suit comes against the backdrop of an ongoing labor shortage in New Orleans. Nearly a year after Hurricane Katrina, “help wanted” signs abound there and elsewhere in the Gulf Coast, as the region suffers from a chronic shortage of workers. From restaurant work to construction and more skilled jobs, businesses are having a hard time filling positions. The problem of attracting workers to rebuilding efforts is made more complicated by the severe housing shortage, which has kept many residents from moving back. That in turn has slowed some of the rebuilding.
In New Orleans, immigrants are packed into tiny apartments and temporary shelters, and contractors vie for their services in prominent locations, such as Lee Circle, under the statue of Robert E. Lee, near the office towers of downtown.
Local officials, from New Orleans Mayor Ray Nagin to Mississippi legislators, have vented frustration at the thousands of immigrant workers, many without legal work permits, who arrived in the region. However, the workers have performed much of the back-breaking cleanup work and filled some of the service jobs needed to help jump-start tourism in New Orleans and elsewhere along the coast. Mr. Nagin drew criticism when he expressed concern about the city being “overrun with Mexican” immigrants.
The lawsuit against Decatur and Mr. Quinn says that the employer asserted that it couldn’t find laborers “despite the fact that local U.S. workers, mostly African Americans, had previously worked in this industry in New Orleans and were available to do so.”
“If you paid these displaced people a living wage of $10 an hour and they could stay in the hotel and work there, a lot of these people would have taken the jobs,” said Tracie Washington, a New Orleans civil-rights lawyer on the case. But, she added, “There is a real difference between hiring people in the community that will organize more easily and those who don’t speak English and don’t know the law of the United States.”
At a news conference in New Orleans, the plaintiffs displayed the “application for alien employment certification” that Decatur filed to the Labor Department on Oct. 6, 2005. The application states in a space provided for describing efforts to recruit U.S. workers and results that, among other things, Decatur “offered work to hurricane evacuees. No one applied.”
In 2002, agricultural guest workers won a similar legal case in the 11th Circuit against two Florida companies on the grounds that they hadn’t reimbursed workers for their travel, visa and other expenses incurred to reach the U.S.
Write to Miriam Jordan at miriam.jordan@wsj.com and Evan Perez at evan.perez@wsj.com

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