WASHINGTON — Labor Secretary Robert Reich made a pitch Friday for help from major retailers to clean up what he called the growing “sweatshop problem” in the garment industry and said agency officials will convene a retail roundtable soon to discuss the issue.
While expressing a willingness to cooperate, retail officials questioned the scope of the Labor Department’s plans and whether it included private label and brand name business.
Reich and the agency’s Wage and Hour Division administrator Maria Echaveste didn’t articulate the breadth of retailer involvement being sought. They said these issues will be discussed during the roundtable this fall. A date has not been set.
Industry officials said the agency should draw a distinction between private label, where a store directly orders apparel from contractors, and brand name business, involving goods bought from a vendor and made by contractors unaffiliated with the retailer.
“Our expectation with branded goods — non-private label — is that the manufacturer would be responsible for any agreements with its subcontractors,” said a spokesman for J.C. Penney Co., Plano, Tex. “J.C. Penney and other retailers are certainly not in a position to be investigators or to police the marketplace.”
“There is some confusion about what Labor is asking,” said a spokeswoman for Mervyn’s, Hayward, Calif. “I think the key thing is that it’s not the retailers’ role to police or enforce compliance with fair labor standards in the garment industry. It is our role to communicate that we require our vendors to comply with fair labor practices, because retailers can’t physically or legally monitor someone else’s contractors.”
During a news conference at which Reich discussed the agency’s retail strategy, the secretary singled out Penney’s and Mervyn’s as retailers who have cooperated with agency requests to monitor contractor compliance. Both chains have implemented steps in their private label to ensure that contractors who work directly for the store follow the Fair Labor Standards Act, executives at the two firms confirmed, but they added that the agency has not broached the issue of monitoring vendor contractors.
The agency has been cracking down on sweatshops for two years, focusing primarily on pressuring manufacturers to be watchdogs over their contractors. The agency has been using a legal provision called “hot goods” that allows them to seek a temporary restraining order to hold up shipments made under wage violations. Since vendors don’t want to delay shipments, many have paid the back wages owed by their contractors.
Subsequently, some manufacturers — primarily in California where most of the enforcement has occurred — have agreed to monitor their contractors to ensure compliance.
Referring to the garment industry “food chain” leading from the contractor to the manufacturer and ultimately the retailer, Reich said the agency’s enforcement strategy needs to include each link.
“We are putting retailers on notice that in the future we will be looking at retailers — large retailers. We’re not talking about mom-and-pop shops,” Reich said. “Retailers, obviously, don’t want negative publicity, and they also want to receive goods they’ve ordered.”
Citing an agency survey conducted in March in California, Reich said 68 percent of the contractors reviewed had wage and hour violations. The garment industry has become a magnet for illegal immigrants, who are easily exploited, he said.
“We believe the problem is growing more serious. Workers do not complain. They are illegal immigrants; they fear they will lose their jobs. This issue needs to be understood in the context of illegal immigrants,” he said.
When asked whether the enforcement strategy is burdensome on a U.S. apparel industry that has been diminished by import competition, Reich said competitiveness isn’t attained by taking the “low road.”
“There are segments of this industry that are thriving,” he said.”Or there is the low road — that is, basically, hiring illegal immigrants and paying them very little, in conditions of squalor,” he said. “The most responsible players in the entire picture are the larger manufacturer and the very large retailers.”
In most cases thus far, the threat of the hot goods provision has been enough for manufacturers to pay more attention to their contractors’ compliance, Echaveste said. So far, the agency only has had to obtain five temporary restraining orders to halt the shipment of apparel.
“We are going to be doing more of this,” Reich said about using the agency’s legal muscle.
“I’m not entirely clear what kind of burden they intend to place on retailers,” said Morrison Cain, vice president, legal and public affairs, International Mass Retail Association, who attended the news conference. “There very well may be things retailers can and should do to ensure they are meeting their existing responsibilities,” he said, noting that as a “private-labeler you are a lot closer to the goods.”
To make retailers responsible for monitoring vendor-contractor compliance would be unworkable, he said.
— Fairchild News Service