Retailers settle sweatshop lawsuit for $20 million

Nathan Hall

In light of a historic human rights settlement, many University students said they are unaffected by allegations that area stores in which they work and shop might sell sweatshop goods.

On Sept. 27, Minneapolis-based Target Corp. and 26 other popular retailers settled a combined $20 million class action lawsuit out of court to silence allegations that their Saipan-based factories had sweatshop conditions, while maintaining their innocence. Some University students cited feeling powerless and uninformed about the situation as the primary reasons behind not taking a definitive stance on the issue.

“I care about this to an extent,” said Scott Devine, a College of Liberal Arts freshman. “I care to the extent that I write my lawmakers but not to the point that I decide to not shop at certain stores. I feel like this is something I really can’t do much about.”

The Pacific Island plants under discussion create garments for well-known stores such as The Gap, Abercrombie and Fitch, J.C. Penny, Sears Roebuck, Nordstrom’s, Calvin Klein, Polo Ralph Lauren, Tommy Hillfiger Corp., Liz Claiborne, Lane Bryant, Talbot’s and The Limited. All of the stores agreed to the conditions of the settlement.

Levi Strauss was also named in the suit but did not sign off on the settlement. Saipan workers are still pursuing litigation against the company.

The $20 million will partly help develop autonomous monitoring systems for workers who say they toil in extremely hostile conditions.

“Everybody feels very good about this that it’s finally over. This is an important step, but it’s only one part of the puzzle,” said Larry Weiss, a Minnesota Fair Trade Coalition member and director of the Labor, Globalization and Human Rights Project.

Weiss said if students are concerned about where their clothes come from, they should link up with like-minded individuals on campus and protest against the stores.

“This is going to take some years, but we will get it done,” Weiss said.

However, some University students see the issue as much more complicated.

“I don’t know a lot about it, as I haven’t done much research on it,” said Emily Hance, a CLA freshman. “But I would agree that this is not a good thing. But as one person, there’s nothing I can do. Within a group, who knows?

“What I do know is that not buying that stuff is incredibly hard to avoid,” she said.

Because the 13-mile-long island of Saipan is part of the U.S. Commonwealth of the Northern Marinas Islands, it’s partially governed by U.S. policy. Saipan officials estimate that their country provides more than $1 billion worth of clothing sold in the United States every year.

Rep. George Miller, D-Calif., has challenged the numerous exemptions companies allegedly use to allow unsafe working conditions. House Majority Whip Tom Delay, R-Texas, has repeatedly blocked the move to bring Saipan up to current U.S. labor standards.

Target press representative Doug Kline declined to comment on the settlement.

The winning results

the monitoring panel will consist of three retired judges who will investigate worker complaints. Manufacturers who repeatedly flout the new rules will be put on probation. The International Labor Organization, an arm of the United Nations, will oversee the panel.

The bulk of the settlement will go to approximately 30,000 former and current affected workers as payment for back wages and relocation funding. As per the terms of the agreement, the defense agreed to drop charges claiming the corporations intentionally broke minimum wage and hour regulations. The litigation, which implicated 23 Saipan-based subcontractors as well, lasted more than three years.

The San Francisco Chronicle reported this week that money was earmarked for relocation because recruits from countries such as China and the Philippines make up the majority of Saipan’s work force. Once lured over, subcontractors charge the workers $5,000 in “recruitment fees” and deduct $100 per month for housing and food expenses. Maximum wage for the workers is approximately $3.05 per hour.

“Although this of course does affect me and I do feel it is unethical and wrong to use that type of labor, I do know that in some cases that it beats the alternative of not having a job at all,” said Mike Cox, a Carlson School of Management MBA student.

“I admit I don’t know the specific status of Saipan, but that’s still better than being unemployed with no income whatsoever,” Cox said.

James Hale, Target’s general counsel, said in a recent Star Tribune interview that Target blamed the dozens of lawsuits on “publicity profiteering” class action lawyers who “use the media to smear a company’s reputation.” Al Meyerhoff, co-counsel for the defense, responded to the allegations in an Associated Press interview by pointing out that his firm waived more than $14 million in fees because the case involved human rights.

The pact establishes that Western retailers must submit a publicly available report of their Saipan business ties and better inform their employees of legal rights. The groups additionally ratified a uniform code of corporate conduct. The companies conceded to overtime pay and providing necessities such as safe food and drinking water.

The Saipan controversy is not the first time Target Corp. has been associated with sweatshop charges. In 1997, Target-owned Mervyn’s and five other U.S. businesses paid roughly $2 million to 150 California workers. The settlement stemmed from a 1995 raid by the Department of Labor in several affluent California suburbs. The sweatshop workers said they were laboring under “slave-like” conditions, but the companies denied any improprieties.

The New York Times is calling the victory the largest settlement ever for a human rights case. The L.A. Times says this filing is the first time a class action lawsuit falls under the Racketeer Influenced and Corrupt Organizations Act. The statute automatically provides the winner with tripled damages.

A hearing on the matter will be held in Saipan in late October, with final settlement approval expected by early next year.

Sweatshop ties

the University has long been involved in the sweatshop debate.

In May, one of former University President Mark Yudof’s last acts was signing a two-year contract with the Worker’s Rights Consortium. The University’s first licensing code of conduct sprang from more than two years of intense efforts by Minnesota Public Interest Research Group, faculty, staff and worker advocacy agencies. The University makes more than $500,000 annually from its licensing fees. Some have previously been linked to human rights violations in Mexico and Indonesia.


The Associated Press contributed to this report

Nathan Hall welcomes comments at [email protected]