Costco in the Dock: Oregon Lawsuit Claims Hundreds of Products Are Tied to Child and Forced Labor
Every weekend, millions of American men push oversized flatbed carts through the cavernous aisles of their local Costco, loading up on bulk chocolate, mixed nuts, shrimp, and a dozen other staples with the quiet confidence that a trusted brand name provides some level of assurance about what they're buying. A new lawsuit filed in Oregon is now challenging that confidence at its foundation, alleging that hundreds of products sold by the warehouse retail giant were harvested or manufactured using child or forced labor — and that Costco's members have been paying for that exploitation without ever knowing it.
The lawsuit claims that hundreds of Costco products are made with child or forced labor, and seeks a $200 payout for each Oregon member affected. The breadth of that claim — covering not one rogue supplier but an allegedly systemic web of supply chain failures across product categories ranging from cocoa to nuts — makes it one of the more sweeping consumer-protection actions the warehouse retailer has faced to date. For anyone who has ever tossed a bag of trail mix or a box of chocolate bark into their cart at Costco, the implications are worth understanding in full.
A Pattern, Not an Anomaly
This is far from the first time Costco has found itself in legal crosshairs over labor conditions hidden inside its supply chain. The company has a long and complicated history with exactly this type of allegation, and the Oregon lawsuit lands in a courtroom landscape that has been wrestling with the same questions for years — with decidedly mixed results for plaintiffs.
One of the most prominent earlier cases arrived in 2015, when Costco was sued for selling farmed shrimp from Thailand, where slave labor and human trafficking in the fishing industry are widespread, and allegedly misleading U.S. consumers about it. A California woman filed what may have been the first such lawsuit against the retailer over liability for the Thai fishing industry, citing state laws that bar companies from making false claims about illegal conduct in their supply chain, including human rights violations.
The mechanics of that shrimp supply chain were grim in their specificity. Costco's purchases of Thailand's farmed prawns, which are fed a diet of cheap fish caught at sea with unpaid, forced labor, helps prop up an industry whose practices are ignored by local authorities, according to the complaint filed in San Francisco federal court. The abuse didn't stop at unpaid wages. The rights group listed abuses at sea including torture, chaining of workers, and killings of those who seek to escape illegal fishing vessels, known as ghost ships.
The complaint went after what it saw as a fundamental contradiction at the heart of Costco's public image. "Costco publicly represents that it does not tolerate human trafficking and slavery in its supply chain, yet it continues to purchase the tainted farmed prawns," according to the complaint. "Any representation by Costco that slavery in the supply chain is not allowed is simply false."
The courts, however, were not persuaded. Costco won dismissal of the lawsuit, with a San Francisco federal judge throwing out the case after finding that the consumers who filed it failed to allege the company had a duty to disclose the information about labor abuses in its supply chain. A follow-up case met the same fate. A lawsuit that continued on the same grounds with a different plaintiff was also dismissed in January 2017 because the plaintiff could not prove that Costco had an obligation to inform consumers about labor abuses on its packaging.
Chocolate, Nuts, and the Geography of Exploitation
The Oregon case specifically names chocolate and nuts among the products allegedly tainted by labor abuses, which points directly to some of the most well-documented hotspots in the global commodity trade. West African cocoa has been at the center of child labor controversies for more than two decades, with repeated pledges by major chocolate companies failing to produce the systemic change they promised.
The major chocolate companies pledged in 2001 to end their reliance on child labor to harvest their cocoa by 2005. Now they say they will eliminate the worst forms of child labor in their supply chains by 2025. That's a 24-year window of broken commitments — a timeline that advocacy groups and plaintiffs' attorneys have used repeatedly to argue that industry self-regulation simply does not work.
The pressure to act through the courts rather than wait on voluntary industry pledges intensified in 2023, when child welfare advocates filed a federal lawsuit asking a judge to force the Biden administration to block imports of cocoa harvested by children in West Africa. The lawsuit, brought by International Rights Advocates, sought to have the federal government enforce a 1930s-era federal law that requires the government to ban products created by child labor from entering the U.S.
The nonprofit group said it filed the suit because Customs and Border Protection and the Department of Homeland Security had ignored extensive evidence documenting children cultivating cocoa destined for well-known U.S. candy makers, including Hershey, Mars, Nestlé, and Cargill. Terry Collingsworth, International Rights Advocates' executive director, was unsparing in his assessment: "They will never stop until they are forced to," he said, adding that the U.S. government has "the power to end this incredible abuse of African children by enforcing the law."
The Legal Battlefield: Why These Suits Are So Hard to Win
The history of forced labor litigation against large American retailers is largely a story of creative legal theories colliding with the formidable wall of corporate supply chain complexity. Companies have successfully argued, time and again, that the distance between a product on a warehouse shelf and the farm or factory where it was made is simply too great to establish the legal chain of causation that courts require.
Perhaps the most illustrative example came from a major cocoa case in the D.C. Circuit. A federal appeals court rejected a proposed class action by eight Malian citizens who sought to hold Hershey, Nestlé, and five other companies liable for child labor on Ivory Coast cocoa farms, finding in a 3-0 decision no causal connection between the plaintiffs' forced labor and the defendants' alleged venture to obtain "cheap cocoa harvested by enslaved children."
The human cost behind that legal abstraction was real and documented. The plaintiffs said they were required to live in squalor and threatened with starvation if they did not work, after being approached by unfamiliar men who falsely promised paying jobs. Yet the law demanded more than proof that abuse happened somewhere in the supply chain. The plaintiffs described living in poor conditions and facing constant threats of starvation if they refused to work, and said they were recruited under false pretenses by men they did not know.
One attorney who has represented plaintiffs in these cases described the corporate legal strategy as a study in contradiction. "These companies are running a war on two fronts. They are telling the public: we're working with cocoa farmers, we are giving them schooling and money, we've got this under control. Then they stand up in court and say we're just buying chocolate, we don't have anything to do with what's going on there. In their most recent filing, they say they are no different from a consumer of a chocolate bar."
The Supreme Court has weighed in as well, doing little to improve the odds for plaintiffs. In an 8-1 decision, the U.S. Supreme Court seemingly brought an end to a 15-year lawsuit brought against Nestlé and Cargill by Malian citizens who claimed to have been enslaved as children on cocoa plantations located in the Ivory Coast. The lawsuit was dismissed on grounds that the alleged injuries lacked a sufficient nexus to the U.S. because they occurred overseas, and because the only domestic conduct alleged by the plaintiffs amounted to general corporate activity. The pattern has been consistent: courts acknowledge the horror but find the legal theories insufficient. In March 2024, the same D.C. Circuit court dismissed a case that sought to hold Apple, Alphabet, Dell, Microsoft, and Tesla responsible for child labor in their cobalt supply chains.
Why Oregon? The State's Legal Angle
The choice of Oregon as a venue is not accidental. Oregon has developed a reputation as a consumer-friendly jurisdiction with robust state-level protections that can sometimes provide a more favorable legal framework than federal courts, particularly when plaintiffs are trying to hold corporations accountable for what is sold to their members — as opposed to what happens on the other side of the world. The $200-per-member damages figure the lawsuit seeks is tailored to Oregon's consumer protection statutes, which allow for statutory damages that don't require each individual plaintiff to prove specific out-of-pocket harm.
The strategy reflects a broader legal evolution happening in this space. Courts in California and Canada have emerged as testing grounds for advancing claims of forced labor in global supply chains, and Oregon plaintiffs and their attorneys appear to be applying similar logic — finding state-level hooks that sidestep the jurisdictional and causation barriers that have sunk so many federal claims. The question of whether Costco had a legal obligation to tell its members that the chocolate or nuts in their cart may have been picked by children or produced under coercive conditions could be answered differently under Oregon law than it has been in federal courts.
Costco's Public Stance vs. Its Supply Chain Reality
Costco has long cultivated an image as a retailer that does right by its employees and its customers — famously paying workers above-market wages, offering generous return policies, and positioning its Kirkland Signature house brand as a stamp of dependability. The company has not been blind to the reputational risks in its supply chain. With regard to its supply chains, Costco has established policies that reinforce its commitment to respecting human rights and reducing the risks of modern slavery, and its Human Rights Statement sets out its salient human rights risks, which include but are not limited to forced labor and the exploitation of migrant workers, and child labor and young workers.
But policy documents and warehouse-floor reality have a way of diverging. Many major U.S. companies, including Costco and other major consumer brands, say they are taking steps to eliminate child labor in their domestic supply chains amid revelations that children are working throughout American manufacturing and food production. Saying and doing, in the context of global commodity supply chains that can involve dozens of intermediaries across multiple countries, are two very different things.
When Costco has been caught in specific supply chain controversies, its responses have ranged from cautious to minimizing. When the Trump administration blocked shipments from a Chinese company that made baby pajamas sold at Costco after it was accused of forcing ethnic minorities in an internment camp to sew clothes, Costco officials said "we believe (the baby sleepers) were made in a factory other than the one that was the subject of the CBP detention order. As the facts develop, we're prepared to consider what action we should take relative to the issue of a supplier to our supplier owning factories that may have problems." The phrase "a supplier to our supplier" captures the essential problem: at Costco's scale, the supply chain stretches so far that responsibility becomes genuinely difficult to assign — or so the argument goes.
The Broader Industry Crisis: From Cocoa to Cobalt
The Oregon suit against Costco does not exist in a vacuum. It is one thread in a vast and tangled web of litigation, advocacy, journalism, and government enforcement that has been building for years around the question of whether American consumers — and the companies that sell to them — bear moral and legal responsibility for what happens at the far end of global supply chains.
In recent years, investigations by media organizations and advocacy groups have tracked a number of products suspected of being made by forced labor as they travel from manufacturers, through brokers and dealers, into the hands of American consumers. The categories implicated are almost comically mundane in their familiarity: "We know that myriad imported goods U.S. consumers enjoy every day — from clothing to electronics to chocolate, fruits and vegetables, and other foods — are likely tainted by forced labor in their supply chains."
Customs and Border Protection has escalated its enforcement posture. U.S. Customs and Border Protection has deployed rare detention orders on goods imported from multiple countries at once, based on allegations that people producing those items might be children, or adults subjected to forced labor, holding shipping containers at U.S. ports of entry until the agency can investigate the claims of wrongdoing. The ripple effects have been felt globally. Customs enforcement actions have sent signals globally, with exporters now on notice to improve labor conditions, while some U.S. importers were shaken to learn their products might have been made by people forced to work against their will or under threat of punishment.
Congress, for its part, took a meaningful step in 2016. In February 2016, former President Barack Obama signed the Trade Facilitation and Trade Enforcement Act, which enables stricter enforcement of an 87-year-old U.S. ban on importing goods made by children or slaves. The law existed long before; what changed was the political will to actually use it. Whether that will has translated into the kind of enforcement that can break the structural incentives driving forced labor remains the central, unresolved question.
What the Numbers Don't Show
The legal and economic arguments can easily obscure the human dimension. In the cocoa context, the plaintiffs described living in poor conditions and facing constant threats of starvation if they refused to work. In the Thai seafood context, the abuses documented on fishing vessels that supply the cheap fish meal fed to farmed shrimp included treatment that would be categorized as torture under any reasonable definition of the term. The children harvesting cocoa in West Africa are often not teenagers doing light agricultural work — they are young children doing backbreaking labor with machetes in remote regions far from their families, having been trafficked there under false promises made to their parents.
The distance between that reality and a $20 bag of mixed nuts or a $12 chocolate bark at Costco is not just geographical. It is structural, and it is maintained deliberately. As one attorney put it in describing the broader cocoa industry's legal strategy, companies are simultaneously claiming credit for their supply chain oversight programs when speaking to consumers and investors, and then disavowing any meaningful connection to the farms where their products originate when standing before a judge.
What This Means for the Man Behind the Cart
For the American consumer — particularly men who tend to do the bulk Costco runs and stock the pantry with the warehouse-sized bags of almonds and dark chocolate — the Oregon lawsuit raises a question that no loyalty card or membership discount can answer: at what point does buying cheap become buying complicit?
The law has largely shielded retailers from the consequences of what happens upstream. But lawsuits like the one filed in Oregon are part of a slow, grinding shift in the legal and cultural landscape. Each case that makes it to court — even those that are ultimately dismissed — adds pressure on companies, generates discovery that surfaces internal documents, and moves the needle on what regulators and legislators consider acceptable corporate behavior. Federal law already allows victims of trafficking and forced labor to sue companies that participate in a "venture" and benefit from the trafficking or forced labor, and plaintiffs' attorneys are getting more creative and more targeted in how they structure their claims.
For Costco specifically, the company's scale makes this a particularly pointed challenge. It is not a boutique retailer that can claim it lacks the resources to audit its supply chain. With tens of millions of members paying annual fees for the promise of quality and value, the argument that Costco simply cannot know what it is selling — and to whom it is giving its purchasing power — becomes harder to sustain with each passing lawsuit.
Where the Oregon Case Goes from Here
The outcome of the Oregon lawsuit will hinge on several factors: whether the court finds that Oregon's consumer protection statutes impose a higher disclosure obligation on retailers than the federal standards that have doomed similar claims, whether the plaintiffs can establish a sufficient factual record linking specific Costco products to specific instances of labor abuse, and whether Costco's own published human rights commitments can be used against it as evidence of the gap between promise and practice.
On that last point, history offers a useful reference. In prior litigation, Costco's public supplier code of conduct — which explicitly prohibits human rights abuses — was cited by plaintiffs as evidence that the company knew about the problem and made representations it couldn't keep. Costco stated on its website that it has a "supplier Code of Conduct which prohibits human rights abuses in our supply chain," a statement that cuts both ways: it demonstrates corporate awareness of the issue while also creating a baseline against which actual practice can be measured.
The $200 statutory damages figure being sought for each Oregon member may seem modest on an individual level, but multiplied across the company's substantial Oregon membership base, it represents a number large enough to matter — and large enough to incentivize the kind of supply chain scrutiny that voluntary corporate commitments have consistently failed to deliver. Whether Oregon's courts will prove more hospitable to this theory than the federal courts that have repeatedly rejected similar claims is the question the entire industry will be watching closely.
One thing is clear: the era of plausible deniability for major American retailers about what happens at the upstream end of their supply chains is narrowing. The legal, regulatory, and reputational pressure is building from multiple directions simultaneously. For Costco — a company that has built its brand on the idea that its members can trust what they're buying — that narrowing creates an exposure that goes well beyond the courtroom. It goes directly to the warehouse floor, and to every cart being pushed down every aisle.
