California Apparel News

Wet Steal, Inc. has landed in the middle of a labor dispute that exemplifies the confusion over who is liable for labor law violations under Assembly Bill 633.

The state labor commissioner has ordered Wet Seal Inc. to pay a total of $90,000 in overtime back wages and penalties to four garment workers who claim the contractor that manufactured private label apparel for the Foothill Ranch, Calif.-based retailer violated labor laws.

Wet Seal filed an appeal of the commissioner’s findings in Los Angeles Superior Court on Jan. 2.

At issue is who qualifies as a manufacturer, said Wet Seal vice president and general counsel Larry Smith.

The dispute stems from a complaint filed by the Garment Workers Center (GWC) in Los Angeles on behalf of the workers, who were employed by Los Angeles-based DT Sewing.

Wet Seal claims it placed orders with Rad Clothing, a Los Angeles–based manufacturer that contracted the production with DT Sewing.

DT Sewing owner Trinh Diep Dao has been fined approximately $60,000, according to GWC. However, DT Sewing has since closed its operations, and Dao is nowhere to be found, according to Dean Fryer, a spokesman at the state’s Department of Labor Standards Enforcement (DLSE), who added that the DLSE has stepped in as guarantor for the workers.

The owners of Rad Clothing, which contracted with Dao for clients such as Lane Bryant and JCPenney before it shuttered last February, have not yet petitioned for an appeal, said Fryer.

Key to this case was documentation between Wet Seal and Rad Clothing. The labor commissioner’s office requested written documentation of contracts between the two companies, but no records were provided, according to labor department records.

Jesse Atilano, president and chief executive officer of Labor Law Monitoring and Compliance Corp. in Los Angeles, which currently represents Rad Clothing, said his client sold about four packages of apparel to Wet Seal Inc. over an eightmonth period.

“To my knowledge Wet Seal did not have any part in the development of those products and, therefore, should not be subject to the garment manufacturing laws,” he said.

According to Fryer, Wet Seal has not provided proof that it purchased any apparel from Rad Clothing, and records indicate that the retailer went directly to DT Sewing for contracting services.

“The labor code is clear: In absence of records the plaintiff is right,” said Ilse Metchek, executive director of the California Fashion Association.

“That’s why it is so important for contracts to be written between manufacturers and contractors and for clear responsibility to be on the back of every retailer’s order,” said Metchek.

Cassy Stubbs, an attorney at Bet Tzedek Legal Services in Los Angeles, which represents the workers, said the case ultimately comes down to how the court defines the term “garment manufacturing.”

As an example of a retailer acting as a garment manufacturer, Stubbs points to the Gap, which has a hand in all stages of the design process, from selecting the fabric and color, producing the samples, to actively monitoring quality control over the manufacturers who produce for the company.

“The labor commissioner’s ruling in this case is significant because a private label retailer has been held liable for the contractor who sewed its clothes,” said Stubbs, adding, “This appeal will result in the first court ruling about the definition of ’garment manufacturing’ under the statute.”