It is not the common case of human trafficking in the US when federal guestworkers are financially exploited. Earlier this month, Nunag Tanedo v. East Baton Rouge Parish School Board was concluded with a $4.5 million fine in favor of 350 Filipino guestworking teachers who were essentially extorted in order to work. The case was based on violations of sections in the Trafficking Victims Protection Act (TVPA).

The decision was made by the US District Court, Central District of California in Los Angeles. The 350 recruited teachers were the plaintiffs and Universal Placement International was the defendant.

Teachers from the Philippines obtained H-1B work visas through a U.S. federal guestwork program in 2007. Their placement was administered by Universal Placement International (UPI) of Los Angeles. Teachers who were involved in the class action lawsuit were lured into a series of fees to teach in Louisiana.

Recruited teachers paid $16,000 into the placement program, much of which was covered by private lenders referred by UPI. Additional fees followed when teachers were obligated to pay 10 percent of their second-year salary with the threat of being sent back to the Philippines. None of the fees paid by the teachers were to be refunded if they were sent back.

The two sections of the Trafficking Victims Protection Act applicable to this case are: forced labor (§ 1589) and unlawful confiscation of documentation (§ 1592). With regards to forced labor, the law states that it is a federal offense to knowingly obtain the labor of a person through threats of "serious harm." Violation of the section 1592 occurs when documentation is destroyed or withheld in a concurrent violation of other sections of the law.

The way in which these sections of TVPA apply to the Nunag Tanedo case relies on linking "serious harm" to financial extortion. Congress' revision of TVPA in 2008 states:

"The term 'serious harm' means any harm, whether physical or nonphysical, including psychological, financial, or reputational harm, that is sufficiently serious, under all the surrounding circumstances, to compel a reasonable person of the same background and in the same circumstances to perform or to continue performing labor or services in order to avoid incurring that harm."

TVPA states that offenders are subject to fines or imprisonment depending on the sections violated. In this case, a $4.5 million was awarded to the 350 teachers who were affected by the financial exploits.

American Federation of Teachers President Randi Weingarten said that this case will set a precedent for conduct within recruiting of foreign guestworkers.

"The outrageous abuses provide dramatic examples of the extreme exploitation that can occur, even here in the United States, when there is no proper oversight of the professional recruitment industry. The practices involved in this case – labor contracts signed under duress and other arrangements reminiscent of indentured servitude – are things that should have no place in 21st-century America."

The defendants attempted to claim that TVPA had been applied extraterritorially, outside the regional bounds the law. The conclusion of the case made clear the grounds on which TVPA was applicable, regardless of whether its applicable to international relations:

"To apply the TVPA to Plaintiffs’ trafficking and forced labor claims in this case is not to apply the TVPA extraterritorially. Thus, Plaintiffs may base their TVPA claims on Defendants’ alleged trafficking of Plaintiffs from the Philippines to labor in the United States."

Nunag Tanedo v. East Baton Rouge Parish School Board is a unique case in terms of defining human trafficking. It's common to limit the scope of human trafficking violations to that of indentured servitude or sex slavery, but this case presents financial tethers as a means to induce slave-like labor practices. Whether the severity of the crime was over-stated or under-stated is not the issue, but the court decision set precedent for financial practices in recruitment labor.