SETTLEMENT ANNOUNCED IN SAIPAN IMMIGRANT LABOR DISPUTE

A few months ago we reported on a class action lawsuit that had been filed against U.S. clothing companies for their treatment of immigrant workers in factories on Saipan. The lawsuit alleged that workers, most of them young women recruited from Pacific Rim countries, were being treated improperly. Many of the same companies were also being investigated by the U.S. Department of Labor. In August 1999, four US retailers agreed to settle the class action suit.

As part of the settlement, the four companies, Nordstrom Inc., J. Crew Group Inc., Cutter & Buck Inc. and Gymboree Corp. will create a $ 1.25 million fund designed to underwrite the cost of independent monitoring of Saipan contractors. The purpose of the monitoring is to ensure the companies treat their workers as required by U.S. labor laws and international human rights treaties.

Saipan is part of the Northern Marianas islands, which are a commonwealth territory of the U.S. Because of this relationship the islands are allowed to make their own immigration and labor laws. However, they are also considered part of the U.S. for purposes of import taxation. For example, in 1998, about $ 1 billion worth of clothes were shipped from Saipan to the U.S, none of which were subject to U.S. import taxes. If made outside the U.S., importation would have cost about $ 200 million in import taxes.

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