Labor & Employment Law Daily Wrap Up, PROCEDURE—M.D. Ala.: Acting Labor Secretary had standing to pursue child labor claims against Hyundai and parts supplier, (Sep 12, 2025)

By Ronald Miller, J.D.

The Secretary has standing to seek prospective injunctive relief against a defendant who has previously violated the FLSA even where that defendant is currently in compliance with the FLSA.

A federal district court in Alabama rejected claims by Hyundai and one of its suppliers that the then-Acting Secretary of Labor lacked standing to pursue prospective injunctive relief for past violations of child labor laws. The defendants argued the Secretary cannot satisfy the first prong for Article III standing—injury in fact—and the Secretary had not shown that any violations were likely to recur such that there was no “real and immediate threat of future harm.” However, the court observed that Congress has given the Secretary the ability to seek injunctive relief for violations of the FLSA, and the defendants cited no cases where a court has found that the Secretary of Labor did not have “standing” to enforce the child labor provisions of the FLSA.

Accordingly, the court overruled the defendants’ objections to a magistrate judge’s recommendation for denial of their motions to dismiss (Chavez-DeRemer v. Hyundai Motor Manufacturing Alabama, LLC, No. 2:24-cv-325-ECM (M.D. Ala. Sept. 10, 2025)).

Control of supplier. The then-Acting Secretary of Labor brought this action against Hyundai Motor Manufacturing (Hyundai), Smart Alabama (Smart) and Best Practice Service (BPS), alleging that they used child labor in the production of goods for sale throughout the U.S. Hyundai assembles automobiles at a facility in Montgomery, Alabama. Component parts for those automobiles are manufactured by Smart. According to the complaint, Smart “existed at HMMA’s direction,” provided Hyundai with parts as needed, and sold “nearly all, if not the entirety, of the component parts” it manufactured to Hyundai.

According to the Secretary, Hyundai had significant control over Smart and allegedly owned a 72.45 percent stake in the company. The complaint went on to state that Smart had no “separate or independent business purpose” besides providing Hyundai with parts and that employees at Smart were subject to Hyundai’s Code of Conduct. Hyundai employees served as corporate officers of Smart and on Smart, Inc.’s board of directors. To provide labor for the facility, SMART used BPS, a staffing agency.

The Secretary alleged that Hyundai exerted additional control over SMART as it concerns the employment of children. Specifically, Hyundai “requires SMART to affirm that [it] complies with all applicable laws regarding the employment of children” and “to immediately notify HMMA’s General Counsel specifically if any person under the age of 18 is working at SMART or any of SMART’s staffing agencies.”

Child labor. From July 11, 2021, through February 1, 2022, BPS employed a thirteen-year-old girl, who it supplied to work at the SMART facility. The employee’s “appearance and physical characteristics [] suggested that she was very young.” During her employment, she “worked long hours, up to 50 to 60 hours per week,” “operating machines that shaped metal sheets into car parts” in a SMART facility. Despite her young appearance and long hours, the complaint claims that SMART never took any action to verify her (or any other employee’s) age.

Smart only discovered the employee’s employment after she failed to return home after work one day, which prompted her father to contact police, who issued an AMBER alert. She was later found in Georgia with an adult male coworker from Smart. After the discovery of the employee’s age, Smart informed BPS that two other employees could no longer work at the Smart plant.

Standing. A magistrate judge recommended that the court deny the defendants’ motion to dismiss or, in the alternative, motion to strike. The defendants’ principal objections were that the then-Acting Secretary of Labor lacked Article III standing to seek prospective injunctive relief for past violations of child labor laws. According to the defendants, the magistrate incorrectly relied on the Secretary of Labor’s statutory authority to bring this suit in finding the Secretary has constitutional standing to bring it under Article III. For its part, BPS asserted that the Secretary lacks standing to seek a prospective injunction against it because it is no longer in business.

Injury in fact. In order to have standing, a plaintiff must show that she: “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” The defendants argue the Secretary cannot satisfy the first prong: injury in fact. Specifically, they claimed that any alleged child labor violations occurred in the past, and the Secretary has not shown that any violations are likely to recur such that there is no “real and immediate threat of future harm.”

Congress has given the Secretary the ability to seek injunctive relief for violations of the FLSA. The complaint alleged (through a news report) that “child labor had been widespread at the [SMART] plant.” Hyundai directed that Smart conduct audits following the child labor violations, but there is no allegation regarding the results of those audits.

Here, Hyundai cited no cases where a court has found that the Secretary of Labor did not have “standing” to enforce the child labor provisions of the FLSA. While the complaint did not allege that the defendants currently employ any underaged labor, it was also silent as to any actions taken by the defendants to ensure no such violations occur in the future beyond an initial audit. In view of allegations that the underage worker’s employment went undiscovered absent intervening circumstances, the Secretary has shown there is a sufficient threat of future injury to satisfy Article III. Accordingly, the defendants’ objections on this basis were overruled.

Redressability. Next, the court considered the issue of redressability raised by BPS because it was no longer in business. BPS argued in its motion to dismiss that a prospective injunction cannot issue against it. The district court agreed.

The Secretary has standing to seek prospective injunctive relief against a defendant who has previously violated the FLSA even where that defendant is currently in compliance with the FLSA.

But BPS’s defunct status goes to redressability, which requires the Court to “ask whether a decision in [the P]laintiff’s favor would ‘significant[ly] increase... the likelihood’ that she ‘would obtain relief that directly redresses the injury’ that she claims to have suffered.” An injunction against BPS would not increase the likelihood that the Plaintiff would obtain relief to redress her injury because BPS is already out of business and therefore an injunction against it would have no force. Consequently, the court lacked subject matter jurisdiction as to the Secretary’s claims against BPS.

The case is No. 2:24-cv-325-ECM.

Judge: Marks, E.

Attorneys: Thomas J. Motzny, U.S. Department of Labor, for Lori Chavez-DeRemer. Charles Andrew Stewart, III (Bradley Arant Boult Cummings) for Hyundai Motor Manufacturing Alabama, LLC. Ronald Wayne Flowers, Jr. (Burr & Forman) for Smart Alabama, LLC.

Companies: Hyundai Motor Manufacturing Alabama, LLC

Cases: Procedure RemediesDamages WageHour AlabamaNews