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U.S. apparel cos. lawsuit (re Saipan)

Author: Business & Human Rights Resource Centre, Published on: 18 February 2014

The island of Saipan is in the US Commonwealth of the Northern Marianas Islands (CNMI). Beginning in the 1980s, many clothing manufacturers had their garments made in Saipan because such items could be labelled “Made in the USA” and subsequently exported to the mainland US exempt from tariffs or quotas.  However, the CNMI charter allows the islands to make their own immigration and labour laws, exempting them from the majority of US federal immigration and labour regulations.  The workforce for garment manufacture is predominantly migrant labour from Asia.

In 1999, three separate lawsuits were filed in US state and federal courts against numerous American retail apparel companies and Saipan-based garment factories.  The two federal lawsuits were filed in California and the CNMI, and each lawsuit was a class action claim filed on behalf of 30,000 foreign garment workers working in Saipan.  The California federal lawsuit alleged that the defendants had engaged in unlawful conspiracies regarding involuntary servitude and criminal peonage prohibited by the Racketeer Influenced and Corrupt Organizations Act and the Anti-Peonage Act.  The California federal lawsuit also made claims of forced labour and deprivation of fundamental human rights under the Alien Tort Claims Act.  The CNMI federal lawsuit alleged breaches of the Fair Labor Standards Act (related to required, unpaid overtime) and CNMI laws relating to minimum wage and workplace rights. 

The third lawsuit was filed in California state court.  This action, brought by a garment workers’ union, alleged unfair business practices under the California Business and Professions Code claiming that the public was being deceived because the garments were being advertised as “sweatshop free”.  This lawsuit also alleged that the human rights of the foreign garment workers in Saipan had been breached because the conditions in which they worked amounted to forced labour and involuntary servitude.

In 2004 all three cases were brought to a close with a $20 million settlement that included 26 retail companies and 23 Saipan garment factories.  The parties agreed upon a code of conduct, independent monitoring, and monetary compensation as part of the settlement.  Levi Strauss was the only company that did not agree to the settlement; the plaintiffs voluntarily dismissed their action against Levi Strauss in order to effect the settlement.  Levi Strauss resisted the settlement arguing that it had already adopted a far-reaching factory monitoring program and had a stringent code of conduct for all of its manufacturers.  The company said that any clothing made on Saipan during the time in question was made at factories which complied with Levi’s code of conduct (it stopped purchasing clothing made on Saipan in 2000).

- “Paradise Lost”, Rebecca Claren, Ms. Magazine, Spring 2006 [background on Saipan garment industry]

- “Levi’s lawsuit dropped”, Jenny Strasburg, San Francisco Chronicle, 8 Jan 2004

- “Saipan lawsuit terms OKd - Garment workers to get $20 million”, Jenny Strasburg, San Francisco Chronicle, 25 Apr 2003

- “Clothiers fold on sweatshop lawsuit”, Jenny Strasburg & Robert Collier, San Francisco Chronicle, 27 Sep 2002

- “The Saipan saga: why it could have far-reaching impact - lawsuits against sweatshops”, Alan Rolnick, Bobbin, 1 Jun 1999

- [PDF] Beneath the American Flag: Labor and Human Rights Abuses in the CNMI, Report from George Miller and the Democratic Staff of the House Resources Committee, 26 Mar 1998

 

- Gap Inc.: Social Responsibility - Case Studies: Saipan

- Global Exchange: The Saipan Victory  

- Global Exchange: Summary of the Saipan Sweatshop Litigation, Michael Rubin (plaintiffs’ attorney), 10 Oct 2000

- Clean Clothes Campaign: Saipan Sweatshop Lawsuit Ends with Important Gains for Workers and Lessons for Activists, Nikki F. Bas (Sweatshop Watch), Medea Benjamin (Global Exchange), Joannie C. Chang (Asian Law Caucus), 8 Jan 2004 [includes partial list of parties who settled]

 

- US District Court for the Northern Mariana Islands, Doe et al. v. The Gap, Inc. et al.:

- [PDF] Order denying in part & granting in party defendant Levi Strauss’ motion to dismiss, 17 Dec 2002

- [PDF] Order granting class certification, consolidating cases, granting plaintiffs’ motion for preliminary approval of settlements, etc., 10 May 2002

- [PDF] Order granting in part and denying in part defendants’ motion to dismiss plaintiffs’ second amended complaint, 10 May 2002

- [PDF] Order re motion to dismiss plaintiffs’ first amended complaint, 26 Nov 2001

- [PDF] Order re motion to dismiss plaintiffs’ first amended complaint, 29 Oct 2001

- California Superior Court, County of San Francisco, Union of Needletrades et al. v. The Gap et al.

- [PDF] Judgment Pursuant to Stipulations of Dismissal, 28 May 2003

- List of documents filed in court

- US Court of Appeals for the Ninth Circuit: Does v. Advanced Textile Corp., 2 Jun 2000 [upholding class status]

Related companies: Brooks Brothers Brylane (part of Pinault Printemps-Redoute) Calvin Klein (part of Phillips-Van Heusen) Cutter & Buck Donna Karan Dress Barn Gap Gymboree J.Crew Jones Group Levi Strauss Liz Claiborne May Department Stores Nordstrom Oshkosh B'Gosh Phillips-Van Heusen Polo Ralph Lauren Sears Tommy Hilfiger (part of Phillips-Van Heusen) Warnaco Woolrich