HOT GOODS
Forever 21 Subpoenaed by U.S. Labor Department for Factory List
After a series of raids on downtown Los Angeles garment factories suspected of underpaying their workers, federal authorities are demanding that Forever 21 produce documents that list the names of the LA garment factories used by the low-cost retail chain.
On March 14, it was announced that U.S. District Court Judge Margaret Morrow ordered Forever 21 to produce documents that were originally subpoenaed Aug. 16, after the U.S. Labor Department’s Wage and Hour division made a sweep of garment factories said to be making clothes for Forever 21 and other major clothing retailers. The factories are suspected of violating minimum wage and overtime rules.
Forever 21 is suspected of breaking the “hot goods” clause of the Fair Labor Standards Act. The law prohibits employers from shipping any goods produced by underpaid workers. Forever 21 did not hand over documents after they were originally subpoenaed, according to a Labor Department statement.
Morrow signed the order on March 7 in U.S. District Court in Los Angeles, where Forever 21 is based. By law, Forever 21 is required to produce the requested documents in 10 days following the order.
Forever 21 did not answer an email and a phone call requesting comment by press time.
M. Patricia Smith, the Labor Department’s solicitor, or lead attorney, based in Washington, D.C., said: “The order underscores that everyone in the supply chain has a responsibility to ensure that workers receive the federal minimum wage and earned overtime, and [the subpoena] demonstrates our commitment to enforcing those protections despite tactics designed to obscure the employment relationship.”
Scrutiny of Forever 21 is part of a larger agency effort to crack down on the Southern California garment industry, where “repeated and widespread” violations of federal labor laws is commonplace.
Over the last five years, the department has investigated more than 1,500 cases in the area, finding violations in 93 percent of cases. The department has recovered more than $11 million in back wages for about 11,000 workers.
One systemic problem plaguing the garment industry is that workers are usually not paid by the hour but instead are compensated on a so-called piecemeal rate for every garment produced. That amount is often low enough to violate minimum-wage standards, which are $7.25 an hour for the federal minimum wage and $8 an hour for the California minimum wage.
