Firm Accused of Slave Labor Policy at Plant

A manufacturer operating in a U.S. territory in the Pacific kept Chinese immigrant workers working under apparent slave labor conditions to produce clothing with “Made in U.S.A.” labels, the Labor Department charged Tuesday.

The workers, mostly young women, were recruited from the southeastern provinces of China and signed two- or three-year contracts to work in Saipan for six corporations operating under different names, but all controlled by the Tan family. Saipan is in the Mariana Islands, a U.S. possession governed by American labor law.

Once in Saipan, according to the department, the workers were housed in “fenced and guarded barracks and they worked at factories inside compounds again fenced and guarded by security personnel.” The department said the workers were required to surrender their passports to the factories’ owners upon arrival in Saipan.

Labor Department investigators said the recruits were required to work seven days a week: 11 hours a day Monday through Saturday and 8 1/2 hours on Sunday.

The Labor Department estimated that the Tan firms ship about $100 million worth of duty-free clothing to the United States annually.

Conditions at the Saipan garment factories were outlined by the department as it announced that a federal district judge in Saipan has ruled that the department can seek treble damages against the factories’ owners because they retaliated against workers who complained about substandard wages.

In a lawsuit against the factory owners, the department has charged that the employers owe at least $10 million in back pay to 1,350 Chinese contract workers and possibly millions more in damages if the government can prove its case.

Dan Teehan, regional solicitor for the Labor Department in San Francisco, said the garments manufactured in the Saipan factories were sent to the U.S. mainland and sold under major brand names. He said he would not identify the brands because he did not have documentation, but added that “there’s no doubt you would recognize the names.”

The basis for the Labor Department complaint was not the conditions under which the Chinese recruits allegedly were forced to work, but the allegation that they were not being properly paid under U.S. wage and hour laws.

The federal minimum wage in Saipan is $2.15 an hour. The wage is set by the Commonwealth of the Northern Mariana Islands, which includes Saipan. The islands became U.S. possessions during World War II, making them subject to U.S. labor laws and allowing goods manufactured there to carry the “Made in U.S.A.” label.

The Saipan companies named in the Labor Department lawsuit are: American International Knitters Corp., American Investment Corp., Pacific Garment Manufacturing Corp., Pacific International Corp. and Mariana Management Agency Inc. Also named was L&T; International Corp., which handled accounting, payroll and recruiting functions for the five other companies.

Mark Thierman, a San Francisco lawyer who represents the Tan family, called the Labor Department effort “Saipan bashing” and said the government was trying its case in the press.