Hyundai faces two active lawsuits over labor practices in its U.S. supply chain. The U.S. Department of Labor sued Hyundai Motor Manufacturing Alabama in May 2024, alleging the automaker jointly employed a 13-year-old who worked up to 60 hours a week on a supplier’s assembly line. In November 2025, the nonprofit Jobs to Move America filed a separate suit in California accusing Hyundai and Kia of falsely certifying labor-law compliance while their Southern U.S. supply chains relied on child labor, prison labor, and unsafe conditions. Both cases remain in pretrial stages as of 2026, with no settlements reported.
The Federal Child Labor Case
On May 30, 2024, the Department of Labor filed a civil complaint in the U.S. District Court for the Middle District of Alabama against Hyundai Motor Manufacturing Alabama, its subsidiary SMART Alabama LLC, and the staffing agency Best Practice Service LLC. The complaint alleges the three companies jointly employed a 13-year-old girl who worked 50 to 60 hours a week at SMART’s Luverne, Alabama plant between July 2021 and February 2022. She operated machines that formed sheet metal into auto body parts.1U.S. Department of Labor. Department of Labor Files Suit Against Hyundai Motor Manufacturing Alabama
The government charged willful and repeated violations of the Fair Labor Standards Act’s child labor provisions. It also invoked the Act’s “hot goods” prohibition, which bars the shipment in interstate commerce of products made where child labor violations occurred. The Labor Department alleges both component parts and finished vehicles tainted by the child’s labor moved through interstate commerce.2U.S. Department of Labor. Complaint, Su v. Hyundai Motor Manufacturing Alabama The remedies sought include an injunction against future violations and disgorgement of profits derived from the use of child labor.1U.S. Department of Labor. Department of Labor Files Suit Against Hyundai Motor Manufacturing Alabama
The Joint Employer Question
The child was not on Hyundai’s payroll. She was placed at SMART by a staffing agency, and SMART is a separate legal entity. The Labor Department’s theory is that Hyundai functioned as her joint employer because of the control it exercised over SMART: it held a majority interest in SMART’s parent company, loaned SMART more than $100 million, supplied manufacturing equipment, placed Hyundai officers on SMART’s board, and imposed its own code of conduct on SMART employees.3Buchalter. Chavez-DeRemer v. HMMA: Court Lets Joint Employment Suit Proceed
Solicitor of Labor Seema Nanda said, “Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are in fact also employers themselves.”1U.S. Department of Labor. Department of Labor Files Suit Against Hyundai Motor Manufacturing Alabama Hyundai called the theory “unprecedented” and said the government was trying to “unfairly hold Hyundai accountable for the actions of its suppliers.”4The New York Times. Hyundai Child Labor Lawsuit
The September 2025 Ruling
On September 10, 2025, Chief Judge Emily C. Marks denied motions to dismiss filed by Hyundai and SMART. The court found the Labor Department had plausibly alleged joint employment, reasoning that given Hyundai’s documented authority over SMART’s operations, including its ability to audit for child labor compliance, it was implausible for Hyundai to claim ignorance of what was happening inside the plant. The court cited a longstanding Fifth Circuit precedent holding that companies cannot easily disclaim knowledge of prohibited work in facilities they control.3Buchalter. Chavez-DeRemer v. HMMA: Court Lets Joint Employment Suit Proceed
The court dismissed Best Practice Service, the staffing agency, without prejudice on the ground that the company was defunct and an injunction against it would serve no purpose.3Buchalter. Chavez-DeRemer v. HMMA: Court Lets Joint Employment Suit Proceed As of March 2026, the case remains in pretrial with no trial date set.5CourtListener. Chavez-DeRemer v. Hyundai Motor Manufacturing Alabama Docket
The California Unfair Competition Case
On November 13, 2025, Jobs to Move America filed suit in Los Angeles County Superior Court against Hyundai Motor America, Hyundai Motor Company, Kia America, Kia Corporation, Hyundai Mobis, and Glovis America, the logistics arm.6Jobs to Move America. Jobs to Move America Files Lawsuit Against Hyundai and Kia The complaint alleges violations of California’s Unfair Competition Law. Its central claim is that Hyundai and Kia falsely certified to California state and local agencies that their vehicles were made in compliance with state and federal labor laws, including prohibitions on “sweatshop labor.” Those certifications, the complaint says, let the automakers win public contracts while their Southern U.S. supply chains ran on child labor, coerced prison labor, and exploited migrant workers.7Jobs to Move America. What You Need to Know About Our Lawsuit Against Hyundai-Kia
An attorney for the plaintiffs described the situation as “a dirty secret behind the clean electric vehicles Hyundai is selling to government agencies.”8Los Angeles Times. Nonprofit Sues O.C.-Based Hyundai, Kia Alleging Unfair Labor Practices
The complaint further alleges health and safety violations resulting in worker amputations and deaths, pay disparities in which immigrant workers earned less than U.S. citizens for identical work, and use of labor from prisons in Alabama and Georgia under conditions the U.S. Department of Justice has found “likely violate the U.S. Constitution’s prohibition against cruel and unusual punishment.”6Jobs to Move America. Jobs to Move America Files Lawsuit Against Hyundai and Kia
The plaintiffs are seeking a permanent injunction barring Hyundai and Kia from selling vehicles in California until an independent third-party audit confirms compliance with labor laws.9Hadsell Stormer Renick & Dai LLP. HSRD Files Lawsuit Against Hyundai and Kia A demurrer hearing and a motion to strike are scheduled for July 1, 2026, indicating the defendants have filed preliminary challenges to the complaint.10Los Angeles County Superior Court. Case Calendar: 25STCV33247
The Prison Labor Allegations
The California suit’s prison-labor claims rest on reporting and research about work-release participants in Hyundai’s Alabama supply chain. The New York Times documented prisoners working at Ju-Young, a car-parts supplier near Montgomery.11The New York Times. Prison Labor Alabama Hyundai A study by Columbia University’s Labor Lab and Jobs to Move America found work-release participants were overrepresented among auto suppliers in the Montgomery area and that the arrangement depressed wages for non-incarcerated workers as well.12AL.com. Alabama Prison Labor in Hyundai Supply Chain Has Devastating Effect on Wages
Hyundai acknowledged that some suppliers had participated in the Alabama prison work-release program but said none have used prison labor since September 2024.12AL.com. Alabama Prison Labor in Hyundai Supply Chain Has Devastating Effect on Wages The Jobs to Move America complaint disputes that characterization, alleging the practices “are ongoing or likely to recur.”13Jobs to Move America. Complaint for Declaratory and Injunctive Relief
Safety Record at Supplier Plants
The California suit’s health and safety claims track a documented history of serious incidents at supplier facilities. Ajin USA, a Hyundai and Kia parts supplier in Cusseta, Alabama, has faced the most severe consequences. In June 2016, a 20-year-old temporary worker named Regina Allen Elsea was crushed to death by a robotic arm that restarted while she was inside an enclosure clearing a sensor fault. OSHA cited the company for 51 safety violations, 48 of them willful, and found that supervisors had been turning a blind eye to required lockout procedures to minimize downtime.14U.S. Department of Labor. OSHA Cites Ajin USA for Safety Violations Ajin pleaded guilty in federal court to a willful OSHA violation, paid a $500,000 fine and $1 million in restitution, and was placed on three years of probation with mandatory third-party safety auditing.15Manufacturing Dive. Ajin USA Ordered to Pay Over $1.3M in OSHA Penalties An independent safety commission later affirmed an additional $1.3 million in penalties.16U.S. Department of Labor. Administrative Law Judge Upholds OSHA Citations Against Ajin USA
At Hyundai’s new Metaplant in Ellabell, Georgia, two workers died in separate incidents in 2025: one in a forklift accident on March 22 and another on May 20.17WJCL. Georgia Hyundai Megasite OSHA Deaths Injuries
Hyundai’s Response and Changes
After the Reuters child-labor reports surfaced in 2022, Hyundai’s chief operating officer initially ordered the company to cut ties with implicated suppliers. Hyundai later reversed course, saying “additional oversight is a better course at this time than severing ties” and citing the economic importance of the parts makers to Alabama communities.18Reuters. USA Immigration Hyundai Special Report
Hyundai required its Alabama suppliers to undergo independently verified audits, replaced upper management at SL Alabama, and directed SL and SMART to terminate the staffing agencies that had falsely certified underage workers as legal adults.19Montgomery Advertiser. Hyundai Investors Demand Changes Amid Alabama Child Labor Claims The company added supplier training on employment verification, installed anonymous tip hotlines, began validating applicant identification documents, and moved away from third-party staffing agencies.20Manufacturing Dive. Hyundai Talks With Labor Department Over Child Labor at Alabama Suppliers
Following those audits, Hyundai spokesperson Ira Gabriel said initial findings showed “full compliance with underage labor laws” and that the company was “confident there are no current underage labor issues at our tier 1 suppliers.”20Manufacturing Dive. Hyundai Talks With Labor Department Over Child Labor at Alabama Suppliers Both the federal case and the California case remain pending in 2026, with no reported settlements in either matter.