Forever 21 Settles Workers' Suit
Forever 21 Inc. settled a lawsuit with garment workers in California Superior Court, effectively ending a 3-year-long national boycott against the popular Los Angeles–based retailer and resolving a series of lawsuits lobbied between the two sides.
Terms of the settlement were not disclosed. The lawsuit was filed by 33 garment employees, who had worked since 1998 in 21 different factories producing clothes that bore the Forever 21 label, according to Christina Chung, a staff attorney at the nonprofit Asian Pacific American Legal Center, which represented the garment workers.
Chung said she cannot confirm or deny that there was a financial settlement from Forever 21. “We think this is a symbolic step that a retailer wants to work cooperatively with workers to make positive change in the industry,” Chung said. Wayne S. Flick, an attorney representing Forever 21 at Latham & Watkins LLP in Los Angeles, declined to discuss the terms of the settlement because of a strict confidentiality provision. He noted that the disputes have been resolved to the satisfaction of both parties.
Forever 21 Chief Financial Officer Larry Meyer said the company was “looking forward to working with the various parties, including the Garment Worker Center, to ensure appropriate working conditions in Los Angeles.”
The lawsuit was the latest in a line of complaints filed by Forever 21 and the garment workers. In September 2001, 19 workers filed the first lawsuit against the garment factories in state court. After Forever 21 removed the suit to federal court, the garment workers filed a second lawsuit in November 2001. By the beginning of 2002, the garment workers had settled with one of the factories, O&K, which was doing business as One Clothing, and two other defendants. O&K agreed to pay $155,000, Chung said.
After the United States Court of Appeals for the Ninth Circuit reversed the district court’s previous dismissal in March 2004, the garment workers added 14 new plaintiffs and filed a new lawsuit in the Superior Court of California in Los Angeles against Forever 21.
The retailer filed a defamation lawsuit against the garment workers and several watchdog agencies, including the Garment Worker Center and the Coalition for Humane Immigrant Rights of Los Angeles. The defamation case has since been dismissed.
In the most recent lawsuit, settled in early December, the garment workers requested restitution, preliminary and permanent injunctions, and payment covering the cost of the suit and attorneys’ fees. The workers alleged, among other labor violations, that the retailer denied payment of minimum wage and overtime, failed to provide meal and rest breaks, and maintained unsafe and unhealthful working conditions.
This case is one of the first to fall under Assembly Bill 633, enacted in 2000. AB633 extended liability for labor-law violations to include retailers that act as manufacturers. The law was drafted to create a “wage guarantee” for garment workers by ensuring that manufacturers, private-label retailers and contractors share responsibility for paying minimum wage and overtime.
Forever 21’s business model of producing quick-turn, trend-driven merchandise at prices below its competitors has set a new standard among juniors manufacturers.
The plaintiffs stated in the lawsuit that privately held Forever 21 earned $408.3 million in 2003 and has projected sales of more than $600 million in 2004. —Khanh T.L. Tran
