By Alex Dobuzinskis

LOS ANGELES (Reuters) - Del Monte Fresh Produce has agreed to pay $1.2 million to settle a federal lawsuit contending Thai workers in Hawaii were stripped of their passports, denied pay and given substandard living quarters, officials said on Monday.

Proceeds from the settlement will be split among roughly 150 Thai workers for Del Monte on whose behalf the lawsuit was filed in Hawaii in 2011 by the U.S. Equal Employment Opportunity Commision, or EEOC, the commission said in a statement.

The suit accused recruitment company Global Horizons of Beverly Hills, California, and six growers including Del Monte, of discriminating against the pineapple farm workers on the basis of their national origin, and of harassment and retaliation against those who complained.

Del Monte, one of the leading U.S. producers of fresh fruit and vegetables, was the first business in the case to settle the complaint, although it denied any wrongdoing, said Anna Park, a regional attorney for the EEOC in Los Angeles.

"We hope this is a sea change in that industry where the farms and farm labor contractors treat discrimination as important issues and not ignore it," Park said.

Tentative agreements have been reached with four other growers, she added. The outstanding discrimination case against Global Horizons and the now-defunct Maui Pineapple Farms is slated to go to trial in February in Hawaii, Park said.

A representative for Del Monte Fresh Produce, which ceased operations in Hawaii in 2006, could not be reached for comment.

The company agreed to abide by a set of federally approved guidelines at its farms throughout the United States, the EEOC said.

Those included establishing procedures to hold the company's farm labor contractors accountable for preventing discrimination, and for informing workers about their rights.

Federal prosecutors last year were forced to drop criminal charges of forced labor and other offenses against Mordechai Orian, the head of Global Horizons, and a number of his associates, citing insufficient evidence.

One Thai worker in the civil case, Theim Chaiyajit, said in a statement he worked at a Del Monte farm in 2003 and was promised $9.25 an hour but was never paid. He had to fish to feed himself and was crammed into an apartment with 11 other Thai workers, he said.

Aside from substandard living conditions, workers were stuck with debts of between $15,000 and $30,000 in recruitment fees, Park said. Like Chaiyajit, others in the group also had their passports taken and were never paid, she said.

The Del Monte workers in question were recruited in two waves, one in 2003 and one in 2005, she said.