‘Labor has jurisdiction over labor bonds’

The Superior Court has ruled that the CNMI Department of Labor has exclusive jurisdiction over alien workers attempting to collect on labor bonds and that the courts do not have the authority to enforce these bonds.

In a ruling issued Thursday, Associate Judge Perry B. Inos dismissed for lack of jurisdiction the consolidated small claims filed by 11 Chinese workers against bonding companies Oceania Insurance Corp. and Royal Crown Insurance Corp.

The issue stems from a Labor advice for alien workers to file small claims suits in the Superior Court to recover the awards granted them by Labor against their employers.

Citing a 2007 Superior Court decision, however, Inos said the jurisdiction to enforce bonds issued pursuant to the CNMI Nonresident Workers Act is vested solely with Labor.

“The NWA’s extensive statutory and regulatory scheme regarding the enforcement of these bonds again leads this court to conclude that ‘the Legislature has not intended to allow such suits,’” the judge said.

The issue came about after the employers of the 11 complainants breached their employment contracts, prompting the workers to file complaints with Labor. At the hearings, the Labor Administrative Hearing Officer awarded each worker back wages and other relief against their employers. Labor, however, did not institute separate proceedings against the defendants’ insurance companies, although the defendants were each served with a notice of claim concerning the plaintiffs’ awards. Presently, the insurance companies have made no payments on the labor bonds. Labor has not started any action to enforce any of its claims on the bonds.

At the advice of Labor, the workers filed complaints in the Superior Court’s Small Claims Division so they will be paid by the insurance companies directly.

In his decision, Inos noted that the primary reason the workers are unable to recover the awards granted them by Labor is because Labor has thus far not attempted to enforce the insurance companies’ obligations under the labor bonds.

“Although there were administrative proceedings that preceded these actions, the plaintiffs have not filed petitions for judicial review or for mandamus to compel Labor to take action,” Inos said.

Instead, the judge said, the workers’ claims are apparently based on the theory that they are third-party beneficiaries of the labor bonds and therefore possess a right to enforce the bonds independent of the statutory scheme embodied in the NWA.

“Although the plaintiffs might make persuasive arguments concerning their right to bring these actions as third-party beneficiaries under common law principles, the fact that Labor has exclusive jurisdiction over these particular labor bonds makes such arguments irrelevant,” Inos said.

Attorney Robert Myers, counsel for some 127 alien workers, has filed a class action suit against Labor and some of its key officials over the same bonding issue.