CALIFORNIA COURT RULES J. CREW MUST REGISTER AS MANUFACTURER
Byline: Kristi Ellis
LOS ANGELES — San Francisco Superior Court Judge William Cahill has ruled that catalog retailer J. Crew must register as a garment manufacturer in California if it plans to continue doing business with contractors in the state.
The firm is considering whether to file an appeal, but for now the ruling has settled the controversy that has been brewing for eight months between the New York-based company and the California Department of Industrial Relations over whether a retailer is to be considered a manufacturer if it deals directly with contractors.
“It was a plain reading of the statute,” said Jose Millan, acting labor commissioner, commenting on the judge’s decision. “They [J. Crew] fit under the definition of a garment manufacturer and they have to be registered.”
The case stems from an investigation by state labor officials on May 2 of a Los Angeles-based contractor — Willington USA — where overtime violations were found. Investigators seized 31 J. Crew garments, charging that the firm was by definition an unregistered manufacturer and must pay the $185 registration fee.
In June, a state hearing officer also concluded that J.Crew was engaged in garment manufacturing, confirmed the confiscation and cited the company for failing to register as a garment manufacturer.
Contesting the decision, J. Crew filed suit at the end of June, arguing that the state statute defining garment manufacturing was “not intended to apply to companies like J.Crew Inc., who merely contract for the manufacture of apparel items.”
Judge Cahill ruled against that contention.
Millan saw J. Crew as fighting for “a principle, and they apparently have a lot of money to spend on principles.”