Gap resists settlement of Saipan sweatshop suit

Saturday, March 2, 2002 San Francisco Chronicle Jenny Strasburg, Chronicle Staff Writer

Gap Inc. has been leading the charge against a proposed $8.75 million� settlement in a 3-year-old lawsuit alleging sweatshop conditions and� intimidation of foreign workers in the Saipan garment industry. The San Francisco company that owns Gap, Old Navy and Banana Republic� stores, whose sales have been eroding the past two years, is seeking to� block other retailers from settling the case, according to attorneys for garment-factory workers and other retailers that want to settle. Gap says it is opposing the settlement to defend itself against false� accusations and misrepresentations of factory conditions.

The case involves the garment industry on the western Pacific island of� Saipan, a U.S. commonwealth exempt from some federal labor laws that apply� to the rest of the United States. Attorneys for an estimated 30,000 current and former garment workers in� Saipan accuse the retailers and owners of the island's most prominent� factories of perpetuating a system of indentured servitude among mostly� poor guest workers, many of them from China. A settlement proposal has been on the table since 1999. The most recent� calls for independent monitoring of dozens of factories on the island, a code of conduct among retailers and manufacturers, and about $4 million in� payments for workers. The landmark case has made headlines since it was filed in January 1999.

Hearings will continue this month in a federal courtroom on Saipan. Attorneys for the plaintiffs maintain that the predominantly female� population of factory workers has had to work overtime without being paid� and has been subject to unsafe working conditions, exorbitant� job-recruitment fees, illegal threats of deportation and rules prohibiting� having children or marrying. Some 50 defendants, including retailers and factory owners, have said they� have sufficiently monitored manufacturing operations to prevent� intimidation of workers, sweatshop conditions and other abuses that have been alleged. Attorneys for Gap and other retailers have called the suit an attempt by U.S. labor unions to strike back at overseas garment manufacturers that� have taken jobs away from the United States.

Gap, whose products are made in about 50 countries, says it has a team of� about 80 full-time factory monitors working around the world. They conduct� scheduled and surprise visits of factories that make Gap products to ensure� that standards of safety and human rights are being respected, said Gap� spokeswoman Tamsin Randlett. "We've been there; we've checked it out," she said of Gap's contract� factories, including those on Saipan. Joining Gap in opposing the settlement are San Francisco jeansmaker Levi Strauss & Co., the Limited, Lane Bryant, Abercrombie & Fitch, Target, J.C.Penney, May Co., Talbots and more than a dozen Saipan factory owners.

Levi� Strauss, which like Gap has manufacturing contracts in about 50 countries,� ceased operations on Saipan in 2000 for reasons unrelated to the lawsuit,� said spokeswoman Linda Butler. One of the first large apparel companies to� write a manufacturers' code of conduct, in 1991, Levi says its contract� factories on Saipan were in full compliance with company standards. Unlike Gap and Levi, 19 retailers have agreed to settle the case, without� admitting to wrongdoing. They include the Gymboree Corp. of Burlingame,Sears Roebuck and Co., Nordstrom, Tommy Hilfiger, Calvin Klein, Polo Ralph� Lauren, Liz Claiborne and Brooks Bros.

Attorneys for the workers include San Francisco labor attorney Michael� Rubin and heavyweight class-action specialists Milberg Weiss Bershad Hynes� & Lerach. They are seeking class certification of an estimated 30,000� workers employed on the island between 1989 and now. "We're alleging an overarching conspiracy, a scheme," Rubin said. "I don't� mind Gap fighting this case and taking it to trial . . . (but) what I don't� understand is: Why is Gap blocking these other companies from settling?" Rubin described the retailer defendants as powerful multinational companies� cooperating with Saipan factory owners to maintain a cheap, controllable labor force in order to maximize profits.

Gap attorney Daralyn Durie of San Francisco argued, however, that in order� to allow the settlement, the court would have to decide that the case meets� the requirements of a class action on behalf of the entire group of� workers. That requires that they experienced the same work and living� conditions, something Durie said is not the case, since the workers were employed at different factories in different years and at varying levels of satisfaction. "We don't think it's fair to lump all the factories together, and we don't� think it's fair to lump all the workers together," Durie said, adding that� workers who gave depositions told vastly different stories about their� experiences on Saipan. In February, U.S. District Judge Alex Munson heard arguments regarding� class certification but has not issued a ruling. All of the retailer and factory defendants, meanwhile, are seeking� dismissal of the case.

A March 19 hearing is scheduled in consideration of� those motions. If dismissal is not granted, the defendants will probably continue to seek a settlement. Tensions are growing among holdouts and defendants who would like to avoid� further litigation costs. David Schwarz, a Los Angeles attorney� representing retailer J. Crew, which seeks to settle, told the court in� February that he supports Gap's internal efforts to improve factory� conditions. But he said he did not understand "their decision to stand in� the way of a consensual agreement" as provided in the settlement. Another case filed on behalf of Saipan workers, the Union of Needletrades,� Industrial and Textile Employees and the San Francisco human rights� organization Global Exchange is pending in San Francisco Superior Court. That case alleges unfair business practices among many of the same� retailers and factory owners.