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Seven Firms Settle Saipan Suit

WASHINGTON — Seven of eight remaining U.S. apparel companies charged with buying from sweatshops in Saipan in three blockbuster lawsuits have signed settlement agreements, but the final chapter of the bitter three-year legal battle has not been...

WASHINGTON — Seven of eight remaining U.S. apparel companies charged with buying from sweatshops in Saipan in three blockbuster lawsuits have signed settlement agreements, but the final chapter of the bitter three-year legal battle has not been closed.

Levi Strauss & Co. has refused to settle and is the lone holdout in the legal battle.

The seven retailers — Abercrombie & Fitch, Target Corp., Gap Inc., J.C.Penney Co., Lane Bryant Inc., The Limited Inc. and The Talbots Inc. — settled with 23 Saipan factories for a combined total of $11.25 million. They join 19 other U.S. retailers and manufacturers that had previously settled and brings the total settlement fund to more than $20 million. Another defendant, Associated Merchandising Corp., is now owned by Target.

Under the terms of the agreement, which must be approved by the federal court judge in the U.S. Commonwealth of the Northern Mariana Islands, about 30,000 workers who toiled in the Saipan factories from 1989 through May 2002 are eligible for back pay. The companies, which admitted no wrongdoing, have also agreed to adhere to a system of independent monitoring of their Saipan contractors.

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

As a condition of the settlement, the firms 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 worker’s rights. Workers who want to return to their home countries also will be eligible for up to $3,000 in relocation fees.

“This has been an amazing and arduous process with excellent lawyers on both sides fighting not only to protect their clients’ interests, but also to come up with a code-conduct and monitoring program,” said Michael Rubin, a partner at Altshuler, Berzon and a plaintiff attorney. “It took us a long time to find creative solutions to age-old problems that have been exacerbated through globalization.”

The lawsuits date back to January 1999, when two high-profile tort firms — Milberg Weiss Bershad Hynes & Lerach, and Altshuler Berzon — filed three simultaneous actions. Among the charges were violations of federal law, including a “racketeering conspiracy” by using indentured labor with forced recruitment fees ranging from $2,000 to $7,000, failing to pay overtime and creating “intolerable working and living conditions.”

Attorneys and labor and human rights executives said they were “disappointed” by Levi’s “recalcitrance” and refusal to settle. Levi’s was named as a defendant in only one of the lawsuits — the most controversial federal case charging conspiracy to operate and control a forced labor enterprise, among other charges.

“Levi’s prided itself in the past on being a socially responsible company, so the fact that so many other companies stepped forward [and cooperated in the settlement] and Levi’s didn’t is quite puzzling,” said Medea Benjamin, president of Global Exchange in San Francisco.

A Levi’s spokeswoman said executives chose not to settle because the allegations are not true.

“We believe settling untrue claims is a compromise of company values,” she said. “If you look at the basic framework of the litigation, it involves the notion we participated in a conspiracy to deny workers their rights, and given our company’s values and historic commitment to promote workers’ rights, that idea is absurd.”

She also claimed the company had a code of conduct at the time it sourced in Saipan and vigilantly monitored its factories. It has since pulled out its production.

Lauri Shanahan, general counsel for Gap, said in a statement: “We’ve worked very hard to develop a sustainable, independent monitoring program that complements our own efforts to achieve sustained improvements in factory conditions over time.”

Thursday’s announced settlement also sparked a war of words between attorneys representing Target and the workers. James T. Hale, executive vice president and general counsel at Target, said in a statement, “After more than three years of intense investigations by the parties, the government and the media, it is clear that there was no evidence of the egregious violations alleged in the lawsuit against the Target Corp.”

Hale said Target believed it would be “irresponsible to spend the next several years in litigation,” noting consumers would bear the burden through higher prices.

In a phone interview, Al Meyerhoff, partner at Milberg Weiss, called Hale’s comments “inappropriate.” He said the evidence, such as the U.S. Department of Labor’s repeated findings of violations in Saipan’s garment factories and fines for back wages, stands on its own.

Attorneys and labor and human rights executives said they were “disappointed” by Levi’s “recalcitrance” and refusal to settle. Levi’s was named as a defendant in only one of the lawsuits — the most controversial federal case charging conspiracy to operate and control a forced labor enterprise, among other charges.

“Levi’s prided itself in the past on being a socially responsible company, so the fact that so many other companies stepped forward [and cooperated in the settlement] and Levi’s didn’t is quite puzzling,” said Medea Benjamin, president of Global Exchange in San Francisco.

A Levi’s spokeswoman said executives chose not to settle because the allegations are not true.

“We believe settling untrue claims is a compromise of company values,” she said. “If you look at the basic framework of the litigation, it involves the notion we participated in a conspiracy to deny workers their rights, and given our company’s values and historic commitment to promote workers’ rights, that idea is absurd.”

She also claimed the company had a code of conduct at the time it sourced in Saipan and vigilantly monitored its factories. It has since pulled out its production.

Lauri Shanahan, general counsel for Gap, said in a statement: “We’ve worked very hard to develop a sustainable, independent monitoring program that complements our own efforts to achieve sustained improvements in factory conditions over time.”

Thursday’s announced settlement also sparked a war of words between attorneys representing Target and the workers. James T. Hale, executive vice president and general counsel at Target, said in a statement, “After more than three years of intense investigations by the parties, the government and the media, it is clear that there was no evidence of the egregious violations alleged in the lawsuit against the Target Corp.”

Hale said Target believed it would be “irresponsible to spend the next several years in litigation,” noting consumers would bear the burden through higher prices.

In a phone interview, Al Meyerhoff, partner at Milberg Weiss, called Hale’s comments “inappropriate.” He said the evidence, such as the U.S. Department of Labor’s repeated findings of violations in Saipan’s garment factories and fines for back wages, stands on its own.