U.S. Clothing Retailers on Saipan Settle Landmark Workers' Rights Lawsuit.

Business Editors

SAIPAN, Northern Marianas Islands--(BUSINESS WIRE)--Sept. 26, 2002

Retailers and Manufacturers to Fund Groundbreaking Independent

Monitoring Program To Improve Labor Conditions on U.S. Territory

The remaining U.S. clothing retailers that buy garments manufactured on Saipan in the U.S. Commonwealth of the Northern Marianas Islands, and twenty-three Saipan manufacturers have settled claims against them in a federal class-action lawsuit alleging violations of wage and hour laws and other workers' rights.

"These settlements open a new chapter in Saipan - for workers and factories alike," said Al Meyerhoff, a lead attorney for the plaintiffs and partner at Milberg Weiss Bershad Hynes & Lerach LLP. "We are delighted with the outcome and look forward to swift court approval."

The seven U.S. retailers - Abercrombie & Fitch, Target, Gap, Inc., J.C. Penney Company, Inc., Lane Bryant, Inc., The Limited, Inc., and Talbots, Inc. - join 19 other retailers that had previously settled.

The agreement adopts a code of conduct and funds independent monitoring of factories on Saipan. The parties have agreed to explore using the International Labor Organization (ILO), an adjunct of the United Nations, as a monitoring body.

Each company will make a one-time contribution to a fund that will finance the monitoring program and compensate more than 30,000 garment workers, and cover administration costs and attorneys' fees. Today's agreement brings the total settlement fund to more than $20 million.

$8.75 million will come from the previously settled retailers and the remainder, $11.25 million, will come from the remaining 23 manufacturers and 7 retailers. The settlement requires court approval and does not involve an admission of wrongdoing by the defendants.

Milberg Weiss Hynes & Lerach LLP, one of the law firms representing the workers, agreed to waive all of its attorneys' fees as part of the agreement.

Today's settlements, if approved by the Federal Court in the U.S. Commonwealth of the Northern Marianas Islands, will bring to a close more than three years of hard-fought litigation between the plaintiffs and the settling defendants alleging that Saipan's garment industry violated US labor and human rights laws.

The lawsuit was filed on behalf of immigrant workers from nearby Asian countries who, the plaintiffs alleged, were drawn to Saipan with promises of high pay but then allegedly encountered a pattern of long hours, low pay and other objectionable working conditions. The Saipan garment factories produce more than one billion dollars worth of clothing sold annually in U.S. stores.

The manufacturers agree as a condition of the settlement 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.

"This agreement sets up an independent monitoring system that assures that workers will be treated with dignity. A policy of human rights has arrived in Saipan," commented Medea Benjamin, President of Global Exchange.

A panel of three retired judges will be set up to oversee monitoring. The panel will have the power to conduct unannounced inspections of the factories and investigate worker complaints.

The judges can 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.

"Consumers who buy clothes labeled 'Made in the U.S.A.' assume that American law protects the workers who sew them. This historic settlement makes that assumption a reality, fully guaranteeing legal rights for all Saipan garment workers. The result is a victory for American consumers and for the workers themselves," said Michael Rubin, a lead attorney for the workers and a partner at Altshuler Berzon Nussbaum Rubin & Demain in San Francisco.

"This case breaks new ground" said UNITE head Bruce Raynor. "Under this agreement, defendants have established a program that will assure the rights of garment workers are fully and effectively protected. This has been a long road and we're pleased it has come to a successful conclusion."

"While we have far to go to protect the rights of garment workers internationally, this settlement is a significant victory because it makes clear that manufacturers will be held accountable for their actions," according to Joanne Chang, Employment and Labor Director, Asian Law Caucus of San Francisco.

"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."

One final defendant, Levi Strauss & Co., has not agreed to the settlement, but stopped purchasing garments from Saipan after the lawsuit was filed.