Are clothing companies responsible for what goes on behind the doors of their contractors?
That's the question rippling through L.A.'s apparel industry, as manufacturers, contractors, labor unions and legislators debate a controversial legal theory known as "joint liability."
Under a standard of joint liability, if an apparel manufacturer monitors the labor conditions of its sewing contractors, the manufacturer is held jointly responsible, along with the contractor, for any violations discovered there.
The manufacturer, in essence, is held to be a "joint employer" of the contract workers involved in making its clothes.
Currently, an apparel firm's sewing shops are treated as independent contractors over which the manufacturer has no legal responsibility.
But a case currently before the National Labor Relations Board could establish a legal precedent which would hold garment makers to a much tougher standard. On a related front, a California state senator is preparing legislation that would make joint liability the law of the land.
Industry groups say that, if adopted by state and federal regulators, a standard of joint liability could derail efforts to encourage U.S. apparel-makers to monitor their contractors for labor abuses.
What's more, they say the move would push more companies to move their operations overseas, in an effort to escape the reach of U.S. regulators.
"If (joint liability) is upheld, it will destroy monitoring nationwide," said Stanley W. Levy, an attorney for the California Fashion Association. "No company will monitor if it is held to a joint liability standard."
But the Union of Needletrades, Industrial and Textile Employees, better known as UNITE, has long complained that apparel manufacturers attempt to have it both ways.
On the one hand, according to UNITE, apparel firms exercise significant control over their contract workers' terms and conditions of employment by, for instance, sending inspectors to monitor and correct employees' work. At the same time, however, the firms refuse to accept responsibility for any labor violations discovered in those sewing shops, union officials say.
"Inspectors (from apparel firms) are in these shops on a daily basis," said UNITE spokeswoman Hillary Horn. "That speaks to the level of control they have over production and that's why they are joint employers."
The move to hold apparel firms responsible for abuses committed by their contractors has been gathering momentum since the 1995 discovery of 72 Thai laborers toiling in near-slavery conditions at an El Monte factory an event that sparked a nationwide outcry over sweatshop conditions in the apparel industry.
More recently, the issue has emerged as a result of a battle between UNITE and L.A. designer-jeans giant Guess? Inc. in a case before the NLRB.
The union argues that Guess violated federal labor laws when it began moving its production overseas.
What concerns the apparel industry is not so much the labor dispute itself, but the argument on which UNITE is building its case.
The union contends that because Guess participates in a federally sponsored monitoring program in which it agrees to ensure lawful working conditions through regular inspections its contractors are not independent but instead constitute an adjunct of the company, akin to the manufacturer's production department.
As a result, the union says that in shifting production overseas, Guess illegally terminated a group of its employees in retaliation, according to UNITE, for that group's efforts to unionize.
A ruling in favor of the union could result in the standard being applied to all apparel firms, according to industry groups.
The battle over joint liability, meanwhile, is taking place on the legislative front as well.
In Sacramento, state Sen. Hilda L. Solis, D-El Monte, is preparing legislation which would hold manufacturers jointly liable for violations discovered at their sewing shops.
"There really needs to be some accountability and responsibility on the part of manufacturers," said Solis, who is writing legislation to be introduced next year.
Gov. Pete Wilson has twice vetoed similar legislation in the past, maintaining, as the garment industry does, that such a law would drive the garment trade from the state.
Likewise, apparel industry officials argue that such a law would be counterproductive, to say the least.
"It would hurt the industry in the state. It might even kill it," said Richard Reinis, an L.A. attorney whose firm represents 300 clothing companies. "It makes no sense to try to curb the abuses of sweatshop labor by destroying an industry."
Instituting joint liability into state labor laws would certainly discourage apparel firms from participating in the Department of Labor's monitoring program, according to Levy, a former Guess general counsel and member of the White House anti-sweat shop task force working on a global monitoring plan.
Currently, about 80 U.S. companies participate in the federal apparel monitoring program. In that program, companies agree to supervise the work performed by their contractors in the production process to guarantee compliance with minimum wage, overtime and other labor laws.
In return, the Department of Labor specifically states that apparel makers that sign the agency's contractor monitoring agreements are not acting as joint employers.
Joint liability could open companies up to all sorts of liability, ranging from workers' compensation to sexual harrasment claims, according to Levy.
"Fires, accidents, sexual harrasment they (garment companies) would be held accountable for anything that happens in that factory," he said.
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