Five major companies, including Mervyn's and Montgomery Ward, have agreed to pay more than $2 million to 150 workers who labored under slave-like conditions at a notorious El Monte sweatshop and a sister operation.
The funds will be distributed among 80 Thai workers who toiled against their will at the El Monte site and 70 Latino laborers who staffed the second factory, in Los Angeles.
The settlement--which worker advocates called one of the largest payouts to employees in such a case--adds to the more than $1.3 million the workers received previously. About $1 million of that was money confiscated from the sweatshops, and the remainder came from a settlement with other apparel manufacturers who had purchased garments made at the sweatshops.
The manufacturers and retailers who agreed to pay the $2-million settlement
made no admission of wrongdoing. In addition to Mervyn's and Montgomery Ward, two apparel manufacturers--the Compton-based BUM International and the Los Angeles-based LF Sportswear--joined in the settlement filed Thursday in U.S. District Court in Los Angeles.
A separate, undisclosed settlement was reached with the Ontario, Calif.-based Hub Distributing, parent company of the Miller's Outpost chain.
The settlement marks one of the last legal chapters in a case that made international headlines two years ago and helped shed light on the rebirth nationwide of immigrant-staffed apparel sweatshops.
The discovery of the workers' conditions in August 1995 prompted numerous reform efforts. Among these was the creation of a White House task force of apparel manufacturers that has been developing a voluntary code of conduct designed to help firms root out sweatshops.
Eight operators of the El Monte facility--all from Thailand--pleaded guilty last year to charges of conspiracy, indentured servitude and harboring illegal immigrants. They were sentenced to seven years in federal prison.
Federal authorities found indications that garments made in the shops ended up on the racks of some of the nation's leading retail chains, including Macy's, Robinsons-May and Filene's.
With Thursday's settlement, civil litigation over the shops is nearly complete.
"Settling this is the right thing for the workers who had to endure this, and for our company," said Carol Johnson, spokeswoman for the California-based Mervyn's, which has 273 stores in 14 states and is part of the Dayton Hudson retail empire. "We still contend we knew nothing of what was happening over there."
However, immigrant advocates said the agreement sends a message to retailers and manufacturers.
"In the struggle for corporate accountability, garment workers can fight back and win," said Julie A. Su, the lawyer who represented the workers. "It's no longer sufficient for retailers and manufacturers to say, 'We didn't know so we're not responsible.' " Su is a staff lawyer for the Los Angeles-based Asian Pacific American Legal Center.
There was a more muted reaction from Chanchanit Martorell, director of the Los Angeles-based Thai Community Development Center, the group that found jobs and homes for the El Monte workers after their conditions were discovered.
"How do you calculate the loss of freedom in monetary terms?" Martorell said. "This payment does not cover all the damages, but it's a measure of justice."
Responding to the controversy stemming from El Monte, apparel manufacturers and the retail industry continue to debate how to root out sweatshops. Thursday, the Los Angeles-based California Fashion Assn., which represents major apparel manufacturers in Southern California, proposed that retailers take new steps to avoid doing business with unregistered apparel contractors.
Ilse Metchek, executive director of the trade group, said retailers should do business only with apparel contractors that are registered with the state labor agency that regulates the industry.
"If retailers dealt only with registered contractors, you wouldn't have an El Monte," she said.
One spokeswoman for the retail industry cautioned, however, that contractors, or manufacturers, often subcontract work out to even smaller shops. Retail chains would have difficulty ensuring that all subcontractors are as legitimate as those they deal with directly.
"I can't imagine a reputable retailer doing business with anyone except a registered contractor," said Pamela Rucker, a spokeswoman for the National Retail Federation. "However, retailers cannot control who a contractor subcontracts with."
The El Monte workers, most of whom were women, had previously settled claims with a number of other retailers and manufacturers, receiving about $300,000, Su said. Negotiations are continuing with one remaining defendant, Los Angeles-based Tomato Inc., Su added. A Tomato representative said a proposed settlement was awaiting final court approval.
Most of the workers are still in the Los Angeles area in apparel manufacturing jobs.