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Preventing Human Rights Abuses in the US Garment Industry

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Preventing Human Rights Abuses in the US Garment Industry Preventing Human Rights Abuses in the U.S. Garment Industry: A Proposed Amendment to the Fair Labor Standards Act Dennis Hayashit I. INTRODUCTION On July 17, 1991, four hundred fifty garment workers employed by Raymond and Yee Nor Kong found the doors to their workplace padlocked. These workers had no prior notice that the nine shops owned by the Kongs were about to go out of business. 1 For the workers, the closure of the shops meant more than the suspension of future income. The Kongs had not paid them for two months, claiming that money was tight and that compensation would follow when cash became available. The Kongs had borrowed substan- tial sums from their employees, threatening to terminate workers who would not lend them money. Furthermore, the Kongs had ceased paying health insurance premiums, despite having deducted money from employees' pay- checks for this purpose. Employees and their families were left without health coverage although they had paid for insurance. 2 The California Labor Commissioner's Office described this case as one of the worst single violations of wage and hour laws it had ever confronted.3 The Kong case is just one example of a widespread pattern of labor rights abuses in the garment industry,4 a global industry with significant production facilities within the United States that predominantly employs poor women of color.' United States industry is not immune to charges of labor rights abuses, as the Kong case demonstrates. Although international labor lawyers rarely look to the United States first when examining worker rights violations in a global industry, the U.S. garment industry warrants such attention. The U.S. garment industry has violated both international labor standards and federal and state labor laws with some degree of impunity for decades. Manufacturers allow their clothing to be produced by contractors who under- t The author was formerly an attorney with the Asian Law Caucus and is currently the National Director of the Japanese American Citizens League in San Francisco. 1. Robert Collier, Sewing for a Living: UnregulatedExploitation, S.F. WKLY., July 24, 1991, at 1. 2. Steven A. Chin, GarmentFirm's Owners Sought, S.F. EXAMINER, July 22, 1991, at 1. 3. Interview with Henry Huerta, Deputy Labor Commissioner, Office of the Labor Commissioner of San Francisco, in San Francisco, Cal. (Aug. 1, 1991). 4. Whether toiling in Taiwan, the Philippines, Central America, El Paso, or Chinatown, garment workers are paid wages at or below subsistence level. In Guatemala, for example, about fifty thousand Guatemalans sew for name-brand manufacturers such as Levi Strauss, Van Heusen, Calvin Klein, and Liz Claiborne, earning less than seven dollars per day. Mary Jo McConahay, Koret Move Reflects an Industry Trend, S.F. CHRON., May 31, 1990, at A4. 5. See infra note 31 and accompanying text. Yale Journal of International Law Vol. 17:195, 1992 pay and mistreat workers, undeterred by an international regime that has little enforcement power or by a domestic statutory scheme that has failed to curb labor rights abuses in the industry. The Fair Labor Standards Act of 1938 (FLSA),6 designed to protect workers from wage and hour violations, does not hold the manufacturers who contract out sewing work liable for such abuses. FLSA has done little to curb labor rights abuses in the U.S. garment industry in its present state. Under FLSA, ill-treated workers have been able to sue only intermediary contractors who, for lack of resources, are often effectively judgment-proof. To remedy this serious and growing problem, Congress must amend FLSA to create a cause of action against name-brand manufacturers whose garments are produced by contractors under conditions that violate the provisions of FLSA. Before developing several policy arguments to support such an amendment, this paper provides an overview of the industry and the position of U.S. workers and manufacturers within it. Part II describes the effect of internation- al competition on labor practices within the United States. Part m! discusses the structure of the garment industry and the relationship between manufactur- ers, contractors, and workers. Part IV describes manufacturer complicity in labor rights abuses. Part V presents the proposed amendment to FLSA and provides the policy arguments supporting such a remedy. Finally, part VI assesses the objections and practical difficulties such an amendment is likely to encounter. I. EFFECT OF INTERNATIONAL COMPETITION ON U.S. LABOR PRACTICES Garment production in the United States is part of a worldwide industry that has changed markedly over the last thirty years.7 In the late 1950s, only one out of twenty-five garments purchased in the United States was produced abroad.8 During the 1960s and 1970s, domestic manufacturers began moving operations to Asia and South America in search of cheaper labor.9 By the late 6. 29 U.S.C. §§ 201-219 (1988). 7. Dilip K. Das, Dismantling the MultifibreArrangement?, 19 J. WORLD TRADE L. 67, 68 (1985). 8. Diane Yen-Mei Wong, Behind UnmarkedDoors:Developments in the GarmentIndustry, in MAKINO WAVES: AN ANTHOLOGY OF WRITINGS BY AND ABOUT ASIAN AMERICAN WOMEN 159, 166 (Asian Women Unitedof Cal. ed., 1989); Carol A. Parsons, TheDomesticEmployment Consequencesof Managed InternationalCompetition inApparel, in THE DYNAMICS OF TRADE AND EMPLOYMENT 113, 113-20 (Laura D'Andrea Tyson et al. eds., 1988). 9. In 1982, foreign competitors could hire labor at wages ranging from 5 to 32% of U.S. wage levels. Parsons, supra note 8, at 137-38. An associate research director for the International Ladies Garment Workers' Union estimated that the average garment worker earns $0.25 per hour in the Philippines, $0.16 per hour in China, $1.18 per hour in Hong Kong, and $0.63 per hour in South Korea. Wong, supra note 8, at 166. 196 Human Rights Abuses in the U.S. Garment Industry 1980s, sixty to sixty-five percent of U.S. name-brand garments were produced 10 overseas. However, in recent years a combination of uncertain political conditions abroad, increased labor costs, poor workmanship, and problems associated with moving goods quickly from distant locations has worked to reverse this trend.11 As one manufacturer stated, "[r]ight now, Korea, Hong Kong and Taiwan are very expensive ... for labor, for quotas, for import duties. Manufacturers that used to take up three,'fourfloors of a factory in Hong Kong are now shrinking, shrinking, shrinking to one floor or half a floor. 2 As a result, the U.S. garment industry, though still sensitive to the problem of "runaway shops,"1 3 remains a significant producer in the global assembly line and a significant domestic employer.14 Indeed, statistics indicate that the number of garment shops and garment workers in the United States has increased substantially in the past ten years.' 5 Yet as illustrated by the Kong case, this spectacular growth has a dark side. As one commentator argued, "Other than unabashedly illegal enterprises, [the garment industry] is by all accounts the most lawless industry."16 Faced with significant international competition, the industry has created, according to sociologist Edna Bonacich, "a Third World labor force here to match the Third World labor force with which they're competing abroad."' 7 Ample evidence supports Bonacich's claim. For example, in 1990 inspec- tors from California's Department of Industrial Relations visited almost 1,700 garment shops in Los Angeles and cited eighty-six percent of the shops for various labor law violations. They imposed $1.7 million in fines as a result 10. Wong, supra note 8, at 166. 11. Stephanie Strom, U.S. GarmentMakers Come Home, N.Y. TIMES, Oct. 8, 1991, at D1. 12. Id. 13. The term "runaway shops" refers to manufacturers who move their garment production overseas to circumvent burdensome government regulations and laws and to take advantage of cheaper labor costs. 14. Garment manufacturing in the United States employs over two million workers nationwide. OFFICE OF TECHNOLOGY ASSESSMENT, U.S. CONGRESS, THE U.S. TEXTILE AND APPAREL INDUSTRY: A REVOLUTION IN PROGRESS-SPECIAL REPORT 33 (1987) [hereinafter U.S. TEXTriLE SPECIAL REPORT]. California alone accounted for approximately 135,000 garment workers in 1990-1991, with approximately 95,000 workers in Los Angeles County and about 14,000 in the San Francisco Bay area. EMPLOYMENT DEV. DEP'T, STATE OF CAL., GARMENT AND HOSPITALITY INDUSTRY SURVEY Attachment 1 (1991) (on file with author) [hereinafter GARMENT INDUSTRY SURVEY]. Some estimate that the industry in Los Angeles stimulates five billion dollars of economic activity a year in the local economy. Mark Thompson, Thread- bare Justice, CAL. LAW., May 1990, at 30. In the San Francisco Bay area, the garment industry is the largest manufacturing industry, accounting for23,000 jobs and five hundred million dollars in local volume. Collier, supra note 1, at 12. 15. For example, the number of garment shops in California has increased from 2,750 in 1983 to 5,243 in 1990. Kelly (ust & Carolyn Newbergh, Threadbare Dreams: Abusei Abound in Oakland's Sweatshops, OAKLAND TrE., July 28, 1991, at As. 16. Thompson, supra note 14, at 30. 17. Sonni Efron, Sweatshops Expanding Into Orange County, L.A. TIMES, Nov. 26, 1989, at A38; Parsons, supra note 8,at 147. Yale Journal of International Law Vol. 17:195, 1992 of this inspection.18 In San Francisco, a recent survey conducted by two employees of a Garment Workers Center affiliated with the International Ladies Garment Workers Union (ILGWU) discovered a similarly high percent- age of violations. The Center's employees, who posed as seamstresses seeking employment, applied for work at 230 shops, routinely inquiring about matters such as payment of minimum wage, overtime, workers' compensation, and other legally protected matters.
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