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U.S. apparel cos. lawsuit (re Saipan)

Women in garment factoryThe island of Saipan is in the US Commonwealth of the Northern Marianas Islands (CNMI). Beginning in the 1980s, many clothing manufacturers had their garments made in Saipan because such items could be labelled “Made in the USA” and subsequently exported to the mainland US exempt from tariffs or quotas.  However, the CNMI charter allows the islands to make their own immigration and labour laws, exempting them from the majority of US federal immigration and labour regulations.  The workforce for garment manufacture is predominantly migrant labour from Asia.

In 1999, three separate lawsuits were filed in US state and federal courts against numerous American retail apparel companies and Saipan-based garment factories.  The two federal lawsuits were filed in California and the CNMI, and each lawsuit was a class action claim filed on behalf of 30,000 foreign garment workers working in Saipan.  The California federal lawsuit alleged that the defendants had engaged in unlawful conspiracies regarding involuntary servitude and criminal peonage prohibited by the Racketeer Influenced and Corrupt Organizations Act and the Anti-Peonage Act.  The California federal lawsuit also made claims of forced labour and deprivation of fundamental human rights under the Alien Tort Claims Act.  The CNMI federal lawsuit alleged breaches of the Fair Labor Standards Act (related to required, unpaid overtime) and CNMI laws relating to minimum wage and workplace rights. 

The third lawsuit was filed in California state court.  This action, brought by a garment workers’ union, alleged unfair business practices under the California Business and Professions Code claiming that the public was being deceived because the garments were being advertised as “sweatshop free”.  This lawsuit also alleged that the human rights of the foreign garment workers in Saipan had been breached because the conditions in which they worked amounted to forced labour and involuntary servitude.

In 2004 all three cases were brought to a close with a $20 million settlement that included 26 retail companies and 23 Saipan garment factories.  The parties agreed upon a code of conduct, independent monitoring, and monetary compensation as part of the settlement.  Levi Strauss was the only company that did not agree to the settlement; the plaintiffs voluntarily dismissed their action against Levi Strauss in order to effect the settlement.  Levi Strauss resisted the settlement arguing that it had already adopted a far-reaching factory monitoring program and had a stringent code of conduct for all of its manufacturers.  The company said that any clothing made on Saipan during the time in question was made at factories which complied with Levi’s code of conduct (it stopped purchasing clothing made on Saipan in 2000).

- “Paradise Lost”, Rebecca Claren, Ms. Magazine, Spring 2006 [background on Saipan garment industry]

- “Levi’s lawsuit dropped”, Jenny Strasburg, San Francisco Chronicle, 8 Jan 2004

- “Saipan lawsuit terms OKd - Garment workers to get $20 million”, Jenny Strasburg, San Francisco Chronicle, 25 Apr 2003

- “Clothiers fold on sweatshop lawsuit”, Jenny Strasburg & Robert Collier, San Francisco Chronicle, 27 Sep 2002

- “The Saipan saga: why it could have far-reaching impact - lawsuits against sweatshops”, Alan Rolnick, Bobbin, 1 Jun 1999

- [PDF] Beneath the American Flag: Labor and Human Rights Abuses in the CNMI, Report from George Miller and the Democratic Staff of the House Resources Committee, 26 Mar 1998


- Gap Inc.: Social Responsibility - Case Studies: Saipan

- Global Exchange: The Saipan Victory  

- Global Exchange: Summary of the Saipan Sweatshop Litigation, Michael Rubin (plaintiffs’ attorney), 10 Oct 2000

- Clean Clothes Campaign: Saipan Sweatshop Lawsuit Ends with Important Gains for Workers and Lessons for Activists, Nikki F. Bas (Sweatshop Watch), Medea Benjamin (Global Exchange), Joannie C. Chang (Asian Law Caucus), 8 Jan 2004 [includes partial list of parties who settled]


- US District Court for the Northern Mariana Islands, Doe et al. v. The Gap, Inc. et al.:

- [PDF] Order denying in part & granting in party defendant Levi Strauss’ motion to dismiss, 17 Dec 2002

- [PDF] Order granting class certification, consolidating cases, granting plaintiffs’ motion for preliminary approval of settlements, etc., 10 May 2002

- [PDF] Order granting in part and denying in part defendants’ motion to dismiss plaintiffs’ second amended complaint, 10 May 2002

- [PDF] Order re motion to dismiss plaintiffs’ first amended complaint, 26 Nov 2001

- [PDF] Order re motion to dismiss plaintiffs’ first amended complaint, 29 Oct 2001

- California Superior Court, County of San Francisco, Union of Needletrades et al. v. The Gap et al.

- [PDF] Judgment Pursuant to Stipulations of Dismissal, 28 May 2003

- List of documents filed in court

- US Court of Appeals for the Ninth Circuit: Does v. Advanced Textile Corp., 2 Jun 2000 [upholding class status]

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2 May 2004

[PDF] Corporate Social Responsibility - What Every In-House Counsel Should Know

Author: Danette Wineberg, Timberland, & Phillip H. Rudolph, Foley Hoag, in ACC Docket [legal magazine - USA]

In-house lawyers...should...play a central role in building a business case for programs that enable management to anticipate and avoid [risks from corporate social responsibility] issues. [refers to Nike, Timberland, TIAA-CREF, Shell, Wal-Mart]

Read the full post here

8 January 2004

Saipan Sweatshop Lawsuit Ends with Important Gains for Workers and Lessons for Activists

Author: Nikki F. Bas, Sweatshop Watch; Medea Benjamin, Global Exchange; Joannie C. Chang, Asian Law Caucus

This month, the last of three lawsuits over sweatshop conditions on the U.S. island of Saipan came to a close...While the settlement is viewed as a significant victory, several challenges emerged, which lend valuable lessons for future anti-sweatshop campaigns. [refers to Levi Strauss, Abercrombie & Fitch, Brooks Brothers, Brylane (part of Pinault Printemps-Redoute), Calvin Klein, Cutter & Buck, Donna Karan, Dress Barn, Gap, Banana Republic (part of Gap), Old Navy (part of Gap), Gymboree, JC Penney, J.Crew, Jones Apparel, Lane Bryant (part of Charming Shoppes), The Limited (part of Limited Brands), Liz Claiborne, May Department Stores, Nordstrom, Oshkosh B'Gosh, Phillips-Van Heusen, Polo Ralph Lauren, Sears, Talbots, Target, Mervyn's (part of Target), Marshall Fields (part of May Department Stores), Dayton-Hudson (now Target), Tommy Hilfiger, Warnaco, Woolrich, Express Manufacturing, PricewaterhouseCoopers]

Read the full post here

17 September 2003

Saipan garment industry under close scrutiny [Northern Mariana Islands, USA]

Author: Haidee V. Eugenio, Marianas Variety

The working and living conditions as well as the wages received by garment workers will be inspected and reviewed as part of the $20 million settlement agreement which brought to a close the class action suits filed against garment factories in the U.S. District Court, Variety learned. The inspection covers all garment factories and their subcontractors.

Read the full post here

7 September 2003

Politically correct down to a T: the rise of ethical chic

Author: Severin Carrell, Independent [UK]

Now an American firm claims to have an alternative to the high street brands beset by accusations of child labour, starvation wages and death-trap factories. American Apparel, a small clothing company from California, claims it is to be the first brand to make stylish "sweatshop-free" clothing...the anti-sweatshop charities believe American Apparel could prove to the likes of brands such as Gap, Nike, Levi's and Adidas that better wages and conditions do pay [also refers to ethical apparel firms SweatX & Ethical Threads]

Read the full post here

25 April 2003

Levi Opts Out of Sweatshop Settlement

Author: Reuters

Levi Strauss & Co. has opted out of a $20-million settlement approved this week to compensate garment workers on the Pacific island of Saipan..."The allegations against Levi Strauss and company are not true," said company spokesman Jeff Beckman.

Read the full post here

4 April 2003

comments by Gap Inc.: "Saipan"

[Saipan (Northern Mariana Islands, USA): Gap and other retailers: case in U.S. court regarding the companies' conduct in Saipan]

Read the full post here

4 April 2003

comments by advocates for plaintiffs: "Global economy: Saipan"

Author: Global Exchange

[Saipan (Northern Mariana Islands, USA): Gap and other retailers: case in U.S. court regarding the companies' conduct in Saipan]

Read the full post here

3 March 2003

USA: Levis is Lone Hold Out in Saipan Suit

Author: Victor Narro, Sweatshop Watch, on CorpWatch website

For the past several years, Levi has been promoting its image as a large benevolent company promoting fair labor standards... However, Levi's refusal to accept responsibility for the sweatshop conditions in its factories during its 14 year presence in Saipan strongly contradicts this public claim.

Read the full post here

31 January 2003

[PDF] Legal Issues in Corporate Citizenship

Author: Halina Ward, International Institute for Environment and Development

Mandatory legislation on various aspects of business transparency is emerging around the world. It can form part of company law, environmental regulation, or tailored legislation for institutional investors or on social and environmental reporting. Pressure for enhanced public sector accountability has also given rise to calls for company reporting on revenues paid to host government by companies in the extractive industries...A new wave of legal actions – mostly in US courts, but also in some EU countries – is testing the boundaries of existing legal principles in relation to some of the most difficult issues of the CSR agenda. For example, a series of cases in the US, France and Belgium are testing how fundamental principles of international law – particularly human rights law – apply to parent companies of multinational corporate groups.

Read the full post here

15 October 2002

Outcome in Saipan labor case welcomed

Author: Gaynor Dumat-ol Daleno, Pacific Daily News

The Saipan Garment Manufacturers Association issued a press release yesterday to say that it is pleased with the outcome of a lawsuit that alleged sweatshop conditions in the Saipan garment industry.

Read the full post here