In a recent development, the U.S. Department of Labor has issued a press release ordering a Los Angeles-based garment manufacturer, Justar Fashion, to pay back wages due to illegal withholding of pay and overtime pay. The press release mentioned three retailers connected to the incident: Evereve, Indigo, and Stitch Fix.
Alison Taylor, executive director of the Ethical Systems program at New York University's Stern School of Business, emphasizes the importance of retailers having a process in place due to increasing accountability from governments and consumers. Taylor suggests retailers should monitor the situation to ensure the issue is being properly addressed.
Evereve has a zero-tolerance policy for any violation of labor laws and is working with the involved third-party brand to secure the Labor Department’s resolution. Stitch Fix initially denied that its merchandise was involved in the wage infractions at Justar Fashion, but the Department of Labor's Wage and Hour Division team confirmed in a November meeting that Stitch Fix received goods produced by the underpaid workers at Justar.
Taylor warns against draconian supply chain policies that may harm garment workers. She suggests retailers should have a conversation with the brand and feel comfortable they are addressing the issue. Indigo has not responded to the Labor Department's press release.
The problem of labor violations is not only seen overseas but is also endemic in Los Angeles, now the country's textile center. Some governments, including the European Union and certain U.S. states, are implementing and considering laws that will hold retailers more strictly accountable.
Taylor's statements challenge the notion that it's not a retailer's problem if they don't own the company. She argues that it's naive for a retailer to think they can distance themselves from the issue just because they don't run the factory or the brand involved.
The incident highlights a lack of clear protocol in the industry when brands are implicated in labor and safety infractions at garment manufacturers. Mike Petersen, western regional director of the Department of Labor's Office of Public Affairs, said the news release is accurate. No official comment on the U.S. Department of Labor announcement regarding Justar Fashion’s alleged unpaid wages and overtime has been made by any retailers so far.
Many consumers are paying close attention to supply chain issues, according to Taylor. She suggests retailers should be informed about the steps the brand is taking to resolve the issue. As the retail industry evolves, it's clear that addressing labor violations in the supply chain will become increasingly important for both retailers and consumers.
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