USA: Clothing Giants Settle $20m Saipan Lawsuit
The group, which also included JC Penney Co, Target Corp, Limited Brands, and Talbots Inc, join 19 US retailers that had previously settled the suit amid allegations of sweatshop conditions, law firm Milberg Weiss Hynes & Lerach said.
The latest agreement brings the total settlement fund to more than $20 million, with $8.75m from the previously settled retailers and the remainder, $11.25m, coming from the remaining 23 manufacturers and seven retailers.
The settlement requires court approval and does not involve an admission of wrongdoing by the defendants. A final defendant, Levi Strauss & Co, has not agreed to the settlement, but stopped sourcing apparel from Saipan when the lawsuit was filed.
The manufacturers have agreed to comply with strict employment standards, including a guarantee of extra pay for overtime work, safe food and drinking water, and other basic workers' rights. Workers who want to return to their home countries also will be eligible for up to $3,000 in relocation fees.
An independent monitoring system that "assures that workers will be treated with dignity" will be set up and overseen by three judges with the power to conduct random inspections of the factories and investigate worker complaints.
The judges will also be able to order payment of back wages, establish cures for violations found by the monitors and, in worst cases, place manufacturers on probation for repeated and systematic non-compliance with the code of conduct.
"These settlements open a new chapter in Saipan - for workers and factories alike," said Al Meyerhoff, from Milberg Weiss Bershad Hynes & Lerach LLP. "We are delighted with the outcome and look forward to swift court approval."
"We're happy that this long fight has finally reached an agreement," said Victor Navarro, co-director of Sweatshop Watch. "We believe that defendants are responsible to the workers. Levi's - which incomprehensibly is still opposing this settlement - especially needs to heed this advice."
Gap Inc general counsel Lauri Shanahan said: "We're pleased to have helped develop an enhanced monitoring program that includes remediation efforts and has the full support of the manufacturers."
Talbots said it is committed to a safe and satisfactory working environment and is confident it would have won a class action, but preferred to devote resources to monitoring, rather than continuing litigation.
However, James Hale, EVP and general counsel for Target Corp said: "It is a sad fact that these lawsuits were never about the public good.
"They were simply one more instance of class action lawyers acting as publicity profiteers by using the media to smear a company's reputation without regard for the truth."
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