Updates! Federal Court Judge Rejects Motion to Dismiss Landmark Sweatshop Class Action Against Saipan Garment Factories!
- The Gap, Target and Other Retailers First Case to Hold Retailers Accountable for Factory Sweatshop Abuses Will Proceed to Trial
October 29, 2001
By: Sweatshop Watch
In a closely-watched human rights case, a U.S. District Judge in the Commonwealth of the Northern Mariana Islands today upheld the complaint in a class action lawsuit alleging sweatshop conditions on the Western Pacific Island of Saipan. This ruling allows the case to proceed to trial.
According to the complaint, more than 13,000 garment workers in Saipan often work 12-hour days, seven days a week, in unsafe, unclean conditions that violate U.S. labor laws. In a 55-page decision, U.S. District Judge Alex R. Munson held that these allegations, if proven at trial, were sufficient to establish liability of both the factories and retailers for engaging in a "conspiracy" to use peonage labor in violation of racketeering laws.
"We won another important round today," said Al Meyerhoff of Milberg Weiss Bershad Hynes & Lerach LLP and a lead attorney for the plaintiffs. "The Saipan workers are going to get their day in court. This case is going to trial," continued Meyerhoff.
Addressing the plaintiffs' claims that the Saipan's sweatshop industry is dependent on indentured foreign labor, the court stated:
"When the labor is tied to a debt owed to the employer and the employer physically
coerces the worker to labor until the debt is paid or the consequences of failing to
work to pay off the debt are so severe and outside the customary legal remedy that
the worker is compelled to labor, a condition of peonage results, and this is the
essence of plaintiffs' allegations."
One of the primary claims in the lawsuit is that the Saipan garment industry employs foreign workers, primarily young women from the People's Republic of China, who were required to sign "shadow contracts" waiving their basic human rights. These workers were also allegedly forced to pay "recruitment fees" as high as $7,000 just to come to the U.S., creating an indentured status that has been illegal in the United States since the civil war.
In seeking to be dismissed from the suit, the retailers claimed they could not be legally responsible for the actions of factory owners since they were just "customers."
The federal court granted in part and denied in part defendants' motion to dismiss the action, upholding the RICO claims but disallowing certain other claims "without prejudice" to plaintiffs' amending the complaint to include more detail or allegations of "state action" involving the People's Republic of China.
"Since China's role in violating human rights on American soil is manifest, we should have little difficulty adding state action allegations," said Michael Rubin of Altshuler Berzon Nussbaum Rubin & Demain and a lead attorney for the plaintiffs. "China even owns several of the factories," continued Rubin.
Since the case was filed in 1999, nineteen retailers have settled the claims against them and agreed to a rigorous system of independent monitoring at the Saipan factories of contractors that produce their clothes. The settlement provides for a multi-million dollar fund and requires retailers to ensure that their Saipan factories comply with strict employment standards, including guaranteeing overtime pay for overtime work, providing safe food and drinking water, and respecting employees' basic human rights. Unfortunately, the factory owners, together with The Gap, Target, JC Penney, Levi Strauss, and others have blocked the other retailers' settlements by using delay tactics in the courts.
Earlier this month, in a separate but related action solely against the Saipan factory owners for requiring "volunteer work" to meet production quotas in violation of American overtime laws, Judge Munson ordered that some 20,000 current and former garment workers in several countries be provided notice of their right to submit claims for back wages. And the complaint in a California state court case against The Gap and other retailers for alleged false advertising and fraud in claiming only to sell "sweatshop free" goods has also been previously upheld.
The defendants include many major U.S. retailers and dozens of largely foreign factory owners, including Hong Kong businessman, Willie Tan, head of Tan Holdings.
The plaintiffs are represented by the San Diego firm of Milberg Weiss Bershad Hynes & Lerach LLP and the San Francisco firm of Altshuler Berzon Nussbaum Rubin & Demain.