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Photo by Matt OttoIt used to be you could open a clothing business and save money by having your garments made at a sweatshop. Since the workers weren't your employees, you didn't have to worry about pesky things like minimum wage, overtime pay, weekends or vacation. And if the contractor you paid to make the clothes simply shut its doors and skipped town without paying the workers, nobody would come complaining to you.
Those were the good old days. But eight years ago, following the discovery of 75 Thai women held captive in an El Monte sweatshop for more than a year, California lawmakers passed a law that allows sweatshop workers to sue not just the contractor who employed them, but also the clothing manufacturer who received the garments. Foothill Ranch-based Wet Seal Inc., a nationwide retailer of moderately priced women's clothes, is now the first retailer to be stung under that law.
In October 2001, four employees of a contractor named DT Sewing approached the Garment Worker Center, which provides free legal assistance to sweatshop workers in downtown LA. They complained that they had worked in excess of 60 hours per week making clothes for Wet Seal and another company, Rad Clothing, without ever being paid overtime, and that DT Sewing had closed its doors still owing them thousands of dollars in wages.
The following month, the Garment Worker Center filed a $240,000 claim against DT Sewing, Rad Clothing and Wet Seal. Last October, the California labor commissioner held a hearing on the case, and in December, it issued a judgment for the total amount against all three companies. DT Sewing, whose owner had disappeared, never showed up at the hearing. Rad Clothing, a manufacturer that has also gone out of business, agreed to pay thousands of dollars to the workers.
At the hearing last October, the four DT Sewing workers testified that two Wet Seal representatives—who they knew as "Maria" and "Linda"—regularly showed up at the sweatshop to monitor quality. With that evidence, the labor commissioner found in favor of the workers. But Wet Seal immediately announced it was appealing the case, claiming they had paid Rad Clothing for the clothes and therefore weren't a manufacturer subject to the anti-sweatshop law. Depending on the outcome of a trial that could last a year or more, Wet Seal could be forced to pay $90,000 in back wages and unpaid overtime to four workers.
"Wet Seal is appealing the case because they don't want to be held liable in the future," said Joanne Lo, the Garment Worker Center's lead organizer. "We see this case as a huge victory. It is the first time a California labor commissioner has held a retailer liable for garment workers' wages. We hope this will encourage more garment workers to come forward and have hope that they can recover lost wages and not suffer the same exploitation faced by these workers."
Cassy Stubbs, a lawyer with Bet Tzedek Legal Services, represented the four workers before the labor commissioner last October. "Wet Seal is liable because they engaged in garment manufacturing," she said. "They were involved in the design and concept of the clothing and actually checked the quality of the clothing as it was being made. If we had been able to get money from DT Sewing, that would have ended the case, and we wouldn't have to go after Wet Seal."
Larry Smith, Wet Seal's vice president and general counsel, failed to return five telephone calls seeking his comment for this story.
But Jesse Atilano, a lawyer who represents Rad Clothing, insisted that Wet Seal wouldn't have to pay the money because the law only applies to manufacturers. He claimed Rad Clothing had purchase orders proving that Wet Seal had ordered the clothes made by the DT Sewing workers through Rad Clothing, but he refused to share them.
"I don't have permission from my client to do that," he said. "But I am sure Wet Seal will subpoena my client for those records, and I think it is clear that the court will decide in Wet Seal's favor. . . . I think it is a bad precedent to hold Wet Seal liable. Do you realize what this will do to the California economy? Why would JC Penney want to buy clothes in Southern California if they are going to be subject to these laws?"
But Ilse Metchek, executive director of the California Fashion Association, which represents the garment industry, disagrees. "If Wet Seal can prove it ordered the clothes through Rad Clothing, it has nothing to worry about," she said. "Rad Clothing is trying to keep Wet Seal out of this. But in the absence of an actual contract, the court will go with the word of the workers."
This is not the first time Wet Seal has gone before the labor commissioner to answer sweatshop allegations. The company recently settled another case involving a denim contractor, Peep Studio, that also went out of business without paying its workers. As far back as 13 years ago, labor and welfare fraud investigators busted another LA sweatshop where workers were sewing clothes for Wet Seal.