Nordstrom settles sweatshop lawsuit

LOS ANGELES -- Nordstrom, J. Crew and two other retailers today agreed to settle claims in a federal class-action lawsuit claiming garment industry sweatshop abuses on the U.S. territory of Saipan, attorneys said.

Under settlements reached about 4 a.m., the four retailers agreed to require independent monitoring of their Saipan contractors in working toward compliance with U.S. labor laws and international human rights treaties.

"Nordstrom, J. Crew, Cutter & Buck and Gymboree should be commended for their commitment to human rights," plaintiff attorney Al Meyerhoff said.

The U.S. District Court lawsuit filed Jan. 13 against 18 retailers described approximately 32 contractors in Saipan as "America's worst sweatshop" where there were beatings, forced abortions, vermin-infested quarters, barbed wire and armed guards. Employees worked 12 hours a day, seven days a week, the suits claim.

The clothing is tagged "Made in the USA" and sold by some of the most popular retailers in this country.

Under terms of the settlements, which require approval by U.S. District Judge Christina A. Snyder, the companies will establish a $1.25 million fund to finance the independent monitoring program, provide money to the workers, create a public education campaign and attorneys' fees.

The Nordstrom Inc. contribution to the fund was $395,000.

"We believe the settlement is a positive step toward our goal of ensuring that the goods we contract to manufacture in Saipan are made in compliance with law," Nordstrom's co-president, Erik Nordstrom, said in a statement from Seattle.

Attorneys were also filing a letter of agreement in principal to settle the case with Polo, Ralph Lauren, Phillips Van Heusen, Donna Karan, Chadwick's of Boston, Meyerhoff said. The other nine retailers were expected to settle.

Abuses in Saipan had been documented previously, but the class-action suits were the first legal attempt to hold U.S. retailers accountable for alleged mistreatment of workers by subcontractors under the federal Racketeer Influenced and Corrupt Organizations Act.

Saipan is a 13-mile-long Western Pacific island in the Northern Marianas. More than 50,000 people, mostly young women, have been recruited from China, the Philippines, Bangladesh and Thailand with promises of good wages, only to wind up in sweatshops that "would make medieval conditions look good," plaintiffs' attorney William Lerach said earlier this year.

The settlement reached today prohibits the use of unlawful "recruitment fees" in Saipan factories making apparel of U.S. retailers.

According to the suits, workers' passports were confiscated upon arrival, they weren't allowed to leave the factory compound and their social activities were strictly monitored.

The 32 Saipan factories -- mostly owned by Chinese, Japanese and Korean subcontractors -- stamp their clothing with "Made in the USA" tags to sidestep duties, tariffs and quotas, the suits allege.

In the fiscal year that ended in October, the 32 Saipan companies shipped an estimated $1 billion in wholesale clothing duty-free to the U.S. mainland, saving more than $200 million, according to Lerach.

The Northern Marianas, seized by U.S. troops from Japan in World War II, negotiated a commonwealth relationship with Washington that left control of immigration and minimum wages in local hands. It also exempted Saipan's exports from the U.S. duties and quotas that limit imports.

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