Labor Department to Investigate Guess
The Labor Department announced Friday that it will conduct a “thorough review” of Guess Inc. after finding that the controversial Los Angeles clothing company was receiving merchandise from an alleged large-scale sweatshop.
Federal officials said they recently discovered Guess’ ties to the alleged sweatshop, Chums Casual of Los Angeles, while reviewing Chums’ subpoenaed sales records.
Chums, a knitwear maker and marketer, was found by investigators earlier this year to be paying some of its 72 workers as little as $3.10 an hour, well below the then-minimum wage of $4.25. The company settled the case by paying $80,000 in back wages and $12,240 in fines.
Authorities said the subpoenaed records revealed Chums’ merchandise also was being shipped to Sears, Roebuck & Co., Macy’s department store chain and Hub Distributing Inc., the operator of Miller’s Outpost stores.
The Labor Department notified the companies and released their names publicly as part of its strategy to fight sweatshops by pressuring the retailers and manufacturers that do business with them.
A spokeswoman for Sears said the company does not buy directly from Chums and that she did not know if Chums works for Sears’ suppliers. A Macy’s spokeswoman said her chain warned Chums that another federal citation would put their relationship “in danger.” Hub could not be reached for comment.
Guess is being singled out for further investigation because of “many allegations” against the company, said Maria Echaveste, administrator of the Labor Department’s wage and hour division. She declined to say who made the allegations, but UNITE, the major apparel industry union, has been digging up information against Guess lately in connection with an organizing campaign.
The recent complaints against Guess have been an embarrassment for authorities. The company is on the Labor Department’s “Trendsetter” list of firms supposedly taking extra steps to avoid doing business with sweatshops.
Glenn Weinman, Guess’ general counsel, denied the company has done business with Chums recently. He said Guess severed its ties with Chums in September 1995, before the contractor’s violations were uncovered, and that it has been cooperating with the Labor Department.
“We are proud of our overall compliance record,” Weinman said. In the early 1990s, federal authorities repeatedly discovered Guess doing business with alleged sweatshops. But after agreeing in a precedent-setting pact in 1992 to police its contractors’ workplace practices, Guess for several years cultivated a reputation as an enlightened industry leader.
If authorities find that the new allegations have merit, the government could sue the company to live up to its commitment to monitor its contractors, Echaveste said.
The company also would likely be removed from the Trendsetter list, but that list has yet to catch on widely among consumers anyway.
