Alleged Blacklisting of Sweatshop Tipsters Probed

Seven garment workers who cooperated with a recent federal labor crackdown on Orange County sweatshops now complain that they have been blacklisted, intimidated or forced to give kickbacks to their bosses, prompting a second round of investigations by the U.S. Department of Labor.

In several cases, sewing shop owners who were ordered to make up unpaid minimum or overtime wages wrote checks to their workers, but then allegedly forced them to give the money back, said Rolene Otero, director of enforcement for the department’s Wage & Hour Division in Santa Ana.

Another worker claimed that her boss followed her home after she cashed her check and demanded she return the money--a story the boss vehemently denies. The labor department has filed suit against the boss seeking to collect the unpaid wages and forestall any retribution.

Although labor officials have documented widespread abuses in Orange County sewing shops and ordered 18 shops to repay back wages, they are finding it difficult to get the money into the hands of the victimized workers.

“I had employers take employees to the bank, have them sign the (settlement) check, hand the cash over to the employer in the bank lobby, and then sign a receipt saying they got the money,” Otero said. “They (the employers) just told them it was a formality that had to be done and took advantage of the ignorance” of the employees, who were all recent immigrants from Mexico, she said.

Otero said four workers surrendered to their bosses settlements ranging from $300 to almost $2,000.

In addition to those four workers, three others have complained to the department that they have been refused work because they were known to have cooperated with a federal investigation of their former bosses.

Worried that the fear of retaliation will silence other workers, Otero is threatening legal action against anyone who harasses a federal witness.

“I don’t think they understand how powerful the federal government is,” Otero said. “Their refusal to admit that the law applies to them just baffles me. They’re looking for any way around it at all.”

Under the Fair Labor Standards Act of 1938, employers may not discriminate against or fire employees for cooperating with federal labor inspections, Otero said. Violators face a maximum fine of $10,000 and six months in jail.

Fueled by an influx of immigrant labor, about 400 such garment contracting shops have sprung up in Orange County suburbs within the last few years, supplying Los Angeles labels with everything from shorts to party dresses.

Most shops are owned by Vietnamese-American immigrants who themselves toil long hours for paltry profits. They in turn employ Southeast Asian and Latino workers for wages that in some cases are as low as $1 an hour, federal and state labor officials said.

One 7-year-old boy worked hundreds of hours helping his mother sew designer clothes in their Santa Ana home, for wages that averaged $1.45 an hour, federal officials said. The shop owner they worked for signed a consent decree agreeing to repay the family more than $22,700 in minimum and overtime wages owed to them, including nearly $3,200 owed David Valladares, now 8.

The Valladares family still has not received the money. In fact, according to Otero, recalcitrant owners and red tape have delayed payment of most of the $180,000 that 18 shops were ordered to pay to more than 200 other garment workers as a result of the August investigation.

Otero said several of the shop owners have reached out-of-court agreements with the government under which the employers agreed to begin paying workers properly and keeping records to prove it, and were in turn allowed several years to repay the back wages owed their workers.

Some have kept their part of the bargain. But trying to collect money from several other sewing shops and get it into the hands of the workers has been “a nightmare,” she said.

Two weeks ago, the Department of Labor filed suit against one of the garment contractors. The complaint, filed in U.S. District Court in Los Angeles, alleges the former owners of Joanne Fashions of Santa Ana violated federal labor laws and discriminated against workers who told labor inspectors they had been underpaid.

Joanne Fashions was one of those cited for wage and hour violations in the August sweep by federal labor inspectors. According to Department of Labor internal investigative documents obtained by The Times under the Freedom of Information Act, Joanne Fashions paid workers less than the minimum wage, denied them overtime pay and gave 12 workers garments to sew at home in violation of federal and state laws that prohibit home sewing.

Joanne Fashions was sold during the investigation. But former owners Nga Ngoc (Diana) Nguyen and her two brothers agreed in a settlement with the Department of Labor to pay a total of $12,102 to seven former employees, court documents show.

In an interview earlier this month, a sobbing Nguyen insisted that she had been paying the minimum wage all along, but that two workers lied to federal investigators in hopes of getting a big cash settlement.

Nguyen nevertheless signed a waiver of the statute of limitations and promised to repay the back wages, an agreement she now says was coerced. As a first installment on the $12,102 owed, Nguyen wrote checks for a total of $3,425 to two workers--Maria Del Pilar Solano and her mother, Liova Martinez, Nguyen and the workers said in separate interviews.

Solano said Nguyen offered to “buy” the checks back for $500 in cash; Nguyen denies ever making such an offer. Nguyen said she had lent Solano more than $4,000, and that the mother and daughter had promised to return the money after they cashed the checks. Solano said she had borrowed $200 to pay a doctor’s bill, but never borrowed thousands or promised to hand over the back wages.

According to Solano, when she and her mother arrived at the bank to cash their checks, Nguyen was there waiting for them. Solano said Nguyen followed them home and demanded they hand over the cash. When they refused, Solano said, Nguyen began to yell and threaten them and demanded they return several gifts she had given them, including clothing for Solano’s children. Solano said she did return the $200 she had borrowed.

Nguyen said she just happened, by coincidence, to be at the bank when the women arrived. She insisted that she never went to the women’s home, never threatened them, and was repaid only $200 of thousands she had loaned them.

“I was kind to them when they worked for me,” Nguyen said, her face swollen with tears. “When they borrowed money from me, I always gave it to them. They took advantage of me.”

Otero said the alleged incident at the bank and the failure to pay the rest of the money owed prompted the federal suit.

Nguyen, however, alleged that from the first, the labor investigators have been biased in favor of the Latino workers. She charged that Otero has discriminated against her because she is Vietnamese. “She (Otero) didn’t believe anything I told her,” said Nguyen, speaking in Vietnamese through an interpreter. “She didn’t want to listen to my side of the story.”

“She was treated the same way everyone else was,” Otero said of Nguyen. “She and I had three conferences and we reduced the back wages by about 30% based on her side of the story.”

What is not in dispute is that Nguyen has made no further payments to the workers. The Labor Department’s suit seeks to force Nguyen and her brothers to pay the rest of the back wages, with interest, and to enjoin them from discriminating against the workers.

Meanwhile, Solano and her mother, as well as Juana Valladares, said they have been branded troublemakers and have been refused work at other garment shops as word has spread that they cooperated with the government.

Valladares supplied Otero with the names of two sewing shops she said refused to hire her. One store owner told her that he had no work for her “because you talk,” Valladares said. Otero confirmed that she is investigating those allegations.

Otero said her office has affidavits from the other workers and is investigating their complaints. She said all of the complaints have come from Latino workers, though many Southeast Asian workers were also owed back wages. Otero said she suspects that some of them have been subjected to similar pressure tactics but are reluctant to complain.

“Not one of them would talk to us about it,” Otero said. “But if we get signed receipts that say somebody received their money, there’s simply nothing we can do about it.”