Over the last two decades, a surge in sex-trafficking litigation has seen civil lawsuits increasingly targeting businesses outside the hospitality industry.
Today, banks, online platforms, transportation companies, nightclubs, property owners, landlords and even non-profit groups are facing lawsuits for alleged intentional or negligent conduct in sex-trafficking operations.
While the hospitality industry has historically borne the brunt of sex-trafficking litigation, national hotel chains, including Hilton, Marriot, Wyndham and Motel 6, have faced numerous lawsuits resulting in large verdicts and settlements nationwide.
Lawsuits in southeastern Pennsylvania alone amounted to more than $60 million in settlements this year.
The increasing awareness and action against trafficking can be largely attributed to the expansion of federal and state legislation in support of victims, along with heightened media attention on the global crisis of sex and labor trafficking.
The criminal and civil cases involving Jeffrey Epstein have captivated public attention and dominated media headlines for years, sparking widespread debate and controversy. The ripple effects of those cases continue to spread far beyond the traditionally affected hospitality industry.
In 2023, Deutsche Bank and JP Morgan Chase reached settlements in New York, agreeing to pay a combined $365 million for allegedly ignoring obvious warning signs about Epstein, in addition to facilitating and profiting from his trafficking network.
If advocacy continues to gain momentum at this rate, civil sex-trafficking lawsuits are poised to impact a wide array of businesses far beyond the confines of the hospitality sector.
Legal Basis for Civil Lawsuits
Federal and state laws provide multiple avenues for plaintiffs in sex-trafficking cases to pursue civil litigation.
Initially passed over 20 years ago, the Trafficking Victims Protection Act (TVPA) marked the first comprehensive federal effort to combat trafficking. In 2003, the Act was reauthorized to include civil remedies that allowed trafficking victims to sue their traffickers. The scope of this provision broadened significantly with the 2008 reauthorization, which permitted lawsuits against anyone who benefits financially or otherwise from trafficking activities, as specified in 18 U.S.C. § 1595.
Under these legal frameworks, victims can pursue civil actions to recover damages and attorney fees from perpetrators, including those who knowingly benefited from trafficking. This means that individuals or entities that financially gain from participating in trafficking-related ventures can be held accountable, even if they did not directly engage in the trafficking acts themselves.
Moreover, the TVPA ensures that civil actions are stayed during the pendency of any underlying criminal proceedings, preventing any interference with ongoing criminal cases. To further support victims, the statute of limitations has been extended to 10 years after the cause of action arose or 10 years after a trafficked minor reaches the age of 18, allowing more time for survivors to seek justice.
Civil sex-trafficking lawsuits are poised to impact a wide array of businesses far beyond the confines of the hospitality sector."
Additionally, the Act authorizes state attorneys general to bring civil actions on behalf of the state, strengthening the enforcement and accountability measures against trafficking.
These legislative provisions provide a robust legal foundation for victims to seek redress and hold traffickers, as well as those who benefit from trafficking, accountable.
While states have been slow to enact legislation authorizing private rights of action for trafficking, businesses face liability for common law claims of negligence, fraud, intentional infliction of emotional distress, false imprisonment, conversion and even breach of contract.
States are also increasingly enacting statute-of-limitations laws expanding or even eliminating time limits for civil lawsuits in cases of child sexual assault and abuse, including trafficking.
Implications for Other Businesses
Civil lawsuits against businesses often allege failure to implement adequate training for employees, failure to adopt anti-trafficking policies, or willful ignorance of obvious evidence of trafficking. A hotel might be sued if staff noticed multiple men leaving specific rooms in short periods over several days or if housekeeping staff repeatedly found evidence of unusual, high-volume sexual activity and did nothing.
Liability extends beyond hotels and motels to include online platforms, transportation companies and property owners. Websites that facilitate commercial sex advertisements or platforms that fail to monitor content effectively can face lawsuits under federal or state law. Similarly, landlords who lease properties to traffickers may be held liable if they ignore illegal activities on their premises.
Two notable cases in the United States District Court for the Northern District of Illinois illustrate the expansion of civil sex trafficking lawsuits.
Northwestern University is currently facing a labor and sex-trafficking lawsuit in Richardson v. Northwestern University, et al. The claims involve a cheerleading coach and university officials allegedly forcing a cheerleader to engage in sexually suggestive behavior, exposing her to sexual assault and harassment by fans, donors and alumni. The plaintiff also alleges that she would have faced financial hardship if she left the team, as she would have been required to repay the school for her scholarship and travel fees.
Meanwhile, in G.G. v. Salesforce.com, Inc., cloud-based software company Salesforce, Inc. is being sued for developing software for a website that trafficked a minor for prostitution. The plaintiff alleges that Backpage.com, one of the most well-known sex-trafficking websites, achieved its success partly due to its business relationship with Salesforce.
These cases highlight a disturbing trend of individuals and institutions facilitating or ignoring serious abuses, raising critical questions about accountability and the role of technology in exacerbating these challenges facing society.
Presently, major retailer Abercrombie & Fitch is facing a trafficking class action in the United States District Court for the Southern District of New York. Bradberry v. Abercrombie & Fitch Co., et al., alleges that the retailer’s former CEO led a “widespread” sex-trafficking operation, abusing young male models over 20 years and allowing others to do the same.
Be Proactive: How to Protect Your Business From Liability
To mitigate the risk of liability, businesses are increasingly adopting anti-trafficking measures. These include establishing clear anti-trafficking policies, training employees to recognize and report signs of trafficking and implementing stringent hiring practices.
Creating a comprehensive policy that defines the company’s zero-tolerance stance on sex trafficking and outlines the steps the company will take to prevent it is essential.
Anti-trafficking provisions should be integrated into the employee code of conduct, specifying the expectations and responsibilities of all employees. Employees must understand that engaging in any form of sex-buying activities is strictly prohibited, whether at the workplace, during business travel, or using company resources. This prohibition should apply universally, regardless of local laws.
These cases highlight a disturbing trend of individuals and institutions facilitating or ignoring serious abuses.”
Training all employees, particularly those in customer-facing roles, to recognize and report signs of sex trafficking is another critical step. This training should be mandatory, regular and accessible to everyone. Managers and executives should also receive specialized training on handling and enforcing company policies regarding suspected trafficking.
It’s also vital to implement anonymous reporting mechanisms for employees and customers to report suspected trafficking without fear of retaliation. Clear procedures must be established to handle these reports, ensuring they are taken seriously and investigated promptly. Failure to respond appropriately to reports can result in significant damages.
Conducting comprehensive background checks on new hires, especially in roles with higher risks of encountering trafficking situations, is crucial. Additionally, thorough due diligence on all business partners, suppliers and vendors is a necessity. Request that new staff sign a Code of Conduct that explicitly prohibits trafficking.
Regularly reviewing and updating policies and procedures to ensure they remain effective and compliant with current laws and best practices is another essential step. Staying informed of new legislation, industry standards and trafficking prevention best practices helps maintain effective measures.
By implementing these proactive steps, businesses can significantly reduce the risk of being implicated in sex trafficking activities and avoid civil lawsuits. Not only do these measures protect businesses from legal repercussions; they also contribute to the broader effort to combat sex trafficking.
Anastasia Shubert-Baranowski is an associate at Margolis Edelstein and is licensed to practice law in Pennsylvania and New Jersey. Anastasia specializes in employment law, representing both public and private employers in litigation involving discrimination, harassment, retaliation, hostile work environment, wage and hour disputes and vicarious liability claims. She also advises employers and businesses on federal and state law compliance matters and drafts employment policies and agreements. Prior to joining Margolis Edelstein, Anastasia worked in insurance defense litigation and served as an assistant district attorney, handling criminal trials, advocating for victims and negotiating plea agreements.
Meghan Wynkoop is a partner at Margolis Edelstein where she focuses on labor and employment, civil rights, institutional sex abuse and sex and labor trafficking. Meghan is licensed to practice law in Pennsylvania and New Jersey. She represents small and large companies in employment law matters, including discrimination, harassment, wrongful discharge, retaliation, hostile work environment and breach of contract claims. She also handles workplace investigations and assists businesses in drafting employment policies, handbooks and employment-related agreements to ensure compliance with state and federal laws while also serving employers’ individual business needs. Additionally, Meghan defends governmental entities in civil rights lawsuits and represents various organizations in institutional abuse and trafficking cases.
