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Reich Seeks $5 Million in Back Pay, Names Names in Sweatshop Probe

August 15, 1995

WASHINGTON (AP) _ The Labor Department is seeking $5 million from clothing makers linked to a Los Angeles sweatshop where Thai laborers allegedly were threatened with rape or death if they stopped churning out garments for major retail stores _ from Mervyn’s to Neiman Marcus.

Labor Secretary Robert Reich today named 14 manufacturers and 18 retailers involved, releasing a who’s who list of stores that apparently benefited from the ``contract shop,″ where more than 60 workers toiled up to 22 hours a day in an apartment compound surrounded by razor wire to repay the cost of coming to America.

``It is clear from our investigation that this merchandise found its way on to the racks and shelves of some of this nation’s most prominent retailers,″ Reich said in a statement.

Reich said investigators were ``appalled at the sight″ of the ``slave labor″ sweatshop. ``Many of us continue to shake our heads in shock and disbelief that this could happen in this country in the 1990s. ... The retail clothing industry is also shocked.″

Most of the manufacturers and retailers named by Reich have denied knowledge of the sweatshop, department spokesman Scott Sutherland said.

``Almost all of the manufacturers that we contacted _ the ones who didn’t say `call my attorney’ _ said they understood the problem and `you won’t get a fight out of me,‴ Sutherland said.

Many of the illegal immigrants working in the squalid El Monte shop just east of Los Angeles had been employed there for as long as seven years, working day and night for $1.60 an hour. Several workers told federal investigators they weren’t allowed to leave the compound even after they repaid the cost of being transported from Thailand.

``The workers were threatened with rape or murder if they tried to flee the compound,″ the Labor Department said.

Last week, federal agents raided the sweatshop and charged six Thai nationals suspected of running the operation with harboring illegal immigrants. Two others were charged with smuggling immigrants.

The charges carry a maximum penalty of five years in prison and a $250,000 fine.

The Labor Department plans to ask the manufacturers to ``accept responsibility for a share of the $5 million in wages owed to the Thai workers″ under a 40-year-old ``hot goods″ provision in the Fair Labor Standards Act. The manufacturers who got clothing through the sweatshop are liable, but not the retailers, Sutherland said.

``We expect most will voluntarily comply with this request″ for back pay, Reich said.

``The significance of these back wages goes beyond this case,″ he added. ``When these contractors stoop to hiring illegal workers held in bondage, they also steal wages from the pockets of working Americans.″

The manufacturers named by Reich are: F40 California Inc., Tomato Inc., L.F. Sportswear, Ms. Tops of California, Balmara Inc., New Boys Inc./Voltage Inc., Point Zero, Excuses Sportswear, Paragraff Clothing Co., Bermo Enterprises, A&M Casuals, US Boys, B.U.M. International and Diane Samandi (the ``Jonquil″ label).

Telephone calls made Monday night by the Associated Press went unanswered, and some manufacturers weren’t listed or had disconnected numbers.

The retailers named are: Foley’s Petites, Macy’s West, Meier & Frank, Robinson’s May, Hecht’s, Filene’s, Kaufman’s, Neiman Marcus, Dayton Hudson, Mervyn’s, Broadway, Rich’s, Speciality Retailers Inc., Montgomery Ward, Sears, Fred Meyer, Venture and Lerner.

In Chicago, Sears spokesman Ron Culp said his company has a firm policy against using products made under such conditions.

``We talked to the Labor Department ... and asked them for a list of companies and brands in question,″ Culp said late Monday. ``Our guidelines go against such practices, and we would discontinue using those items.″

The May Department Stores said it was conducting its own investigation to determine how sweatshop clothes might have shown up on its racks.

``We are continuing to try to ascertain if, in fact, this incident in El Monte involves merchandise being manufactured for delivery to any May division and, if so, the vendor involved,″ the company said in a statement.

May, Federated Department Stores and Sears, three of the nation’s largest retailers, said they planned to participate in a September ``garment summit″ organized by Reich to discuss better monitoring of contract shops.

Montgomery Ward & Co. last week sued a supplier, New Boys Inc., claiming it had damaged the retailer’s reputation by buying garments from the sweatshop. Montgomery Ward said it was unaware of the conditions and would stop selling the merchandise, shirts sold under the label ``Airtime.″

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