The lawsuit, brought by a former prisoner identified as Xu Lun, alleges that he and other inmates were forced to manufacture Milwaukee Tool-branded work gloves for a supplier, Shanghai Select Safety Products, while incarcerated at Chishan Prison in China's Hunan Province. Xu, who uses a pseudonym because he fears for his safety, says prisoners worked roughly 13 hours a day, seven days a week, for between $1.41 and $42.50 per month.

Attorneys for Xu argue that Milwaukee Tool and its Hong Kong-based parent company, Techtronic Industries, violated the Trafficking Victims Protection Reauthorization Act, which allows victims to sue those who knowingly benefit from their forced labor. A 2023 investigation documented the account of Taiwanese human rights activist Lee Ming-che, who spent nearly five years at Chishan Prison and said he and hundreds of others were forced to work for the equivalent of about 48 cents a day.

Milwaukee Tool has denied the allegations, saying it has found no evidence to support claims linking it to forced labor. Walmart later removed the gloves from its marketplace, and U.S. Customs and Border Protection blocked imports of the gloves under Section 307, a 1930 tariff law prohibiting the sale of goods made with foreign forced labor. In April 2024, the agency announced it would detain gloves made by Shanghai Select or two subsidiaries at U.S. ports of entry.

U.S. District Judge Brett H. Ludwig dismissed the initial lawsuit last December, finding the court lacked jurisdiction over Techtronic Industries and that Congress had not clearly indicated the law applies outside the country. Xu is appealing that decision. The 7th Circuit U.S. Court of Appeals dismissed the appeal against Techtronic but allowed the case against Milwaukee Tool to proceed.

During oral arguments on Nov. 4, plaintiff's attorney Jennifer Bennett argued that the law applies because Milwaukee Tool is an American company that benefited from forced labor through U.S. sales. "It's benefiting in the United States from sales in the United States to United States customers," Bennett said. "That's exactly the conduct that this statute was designed to prohibit."

Attorney David Horniak, representing Milwaukee Tool, countered that the company did not participate in the venture. "The only things that Milwaukee Tool is alleged to have done in the U.S. is order these gloves, buy these gloves, and sell them in the U.S.," he said. Horniak warned that holding the company liable could have sweeping consequences, suggesting that "every consumer who buys goods on Amazon or Temu, in theory, potentially benefits from forced labor."

Charity Ryerson, executive director of the Chicago-based Corporate Accountability Lab, said the outcome could affect workers worldwide. "It's really important for victims of trafficking abroad to be able to bring claims in the United States when someone who benefited from that trafficking is based here," she said. A ruling against the plaintiff, she added, could prevent workers who have suffered abuses from bringing similar claims in Wisconsin, Illinois and Indiana.

Nicholas Bequelin, a senior fellow at Yale Law School's Paul Tsai China Center, said forced labor is endemic to China's prison system and that some products made by prisoners reach the U.S. market. "American consumers are mostly left in the dark about this, even though importing such products is illegal under U.S. law," Bequelin said, adding that litigation is an important part of efforts to curb forced labor in China.

The case is being heard as part of a broader legal debate over whether U.S. companies can be held accountable for abuses in their global supply chains. A ruling is expected in the coming months.