100-plus join planned class action lawsuit over bonds

More than 100 foreign workers have signed up to take part in a class action lawsuit that aims to compel the CNMI Department of Labor to enforce administrative orders directing insurance companies to pay their surety bond claims.

Labor has recently adopted a policy of telling workers to pursue payment on unpaid orders—administrative decisions handed down by the department—in small claims court rather through its offices. Many of these workers are seeking payments from insurance companies on surety bonds, which are intended to provide them back wages and other expenses in the event the businesses where they work falter.

Department officials have previously said the new policy is an improvement because the courts have authority to enforce orders that is beyond the scope of Labor’s powers. Obtaining payments under an order, they have also said, is ultimately the responsibility of the worker involved.

However, critics of Labor’s policy, including labor activists and CNMI Reps. Tina Sablan (I-Saipan) and Edward Salas (R-Saipan), say this policy places an undue burden on workers. The lawmakers recently touched on the issue in a letter to Labor.

Now foreign workers with unpaid surety bond claims have organized to file a suit against Labor in a bid to compel it to enforce the administrative orders it issued directing insurance companies to pay them.

In an interview Tuesday, labor activist Irene Tantiado, former president of the United Coalition of Workers, pointed to a copy of a surety bond agreement she had obtained as evidence of the workers’ claims in the case.

“In the first paragraph, it says the company is bound with the Secretary of Labor,” she said, adding that, after reviewing local laws with attorneys, it appears “Labor is the one who should enforce and they should not be passing that responsibility onto another party like the courts.”

By directing workers to small claims court, she said, Labor is “protecting the bonding companies at the expense of the workers.”

Tantiado and attorneys began collecting plaintiffs in the soon-to-be-filed case last month. In addition to the more than 100 participants they have now secured for the suit, she hopes to have an additional 100 by the self-imposed cutoff date they have set for workers to join, Sept. 30. To take part in the suit, she said, workers must have an unpaid administrative order issued within the last six years.

In response, Deputy Labor Secretary Cinta Kaipat noted that in litigation several years ago, the CNMI’s Supreme Court “chastised” Labor for previously attempting to enforce administrative orders on its own. She also defended Labor’s policies as more effective than departmental enforcement.

“If anything, it takes it up a notch,” she said. “We cannot go over there and force a bond company to pay; that’s a step for the courts. Administratively, we do all we can to ensure employers are ordered to pay.”

Kaipat added that Labor is working with the Department of Commerce to crack down on surety bond companies that often fail to pay claims and has provided assistance to workers in the form of court fee waivers and informational packets to help them pursue payments.