Wet Seal Settles AB633 Suit
The Wet Seal Inc. agreed to pay $90,000 this week to settle a suit four garment workers brought against the Foothill Ranch, Calif.–based retailer and Los Angeles–based DT Sewing, the Wet Seal contractor that employed the plaintiffs.
The settlement marks the first time a retailer has paid back wages under state Assembly Bill 633. Signed into law by Gov. Gray Davis in 1999, the bill broadens garment workers’ ability to file claims for alleged violations of laws regarding wages and overtime.
The $90,000 settlement equals the wages the workers claimed they were owed. In addition, the company will contribute $40,000 to Los Angeles–based Bet Tzedek Legal Services, a nonprofit legal services organization that represented the plaintiffs. Wet Seal’s Chief Executive Officer Peter D. Whitford said Wet Seal’s contribution will help Bet Tzedek continue its advocacy as well as put this lawsuit behind the company.
“While we do not believe we are legally liable for the unpaid wages, as we had already paid for the garments, we have compensated these workers because it was the right thing to do,” Whitford said.
Cassy Stubbs, director of Bet Tzedek’s Employment Rights Project, said this settlement could serve as an example of how retailers and manufacturers can pay fair wages to garment workers.
“We’re hopeful that this will effect a sea change,” Stubbs said. “The Wet Seal is a large private-label retailer, and we’re hoping others follow suit and handle problems before they occur. It’s a large challenge because abuses are so widespread.”
Retail analyst Jeffrey Van Sinderen of Los Angeles–based B. Riley & Co. said he believed the settlement will not represent a shift in the way the garment industry does business.
“The Wet Seal is in turnaround mode,” Van Sinderen said. “If another company who was performing extremely well caved in, so to speak, that would have been an event. Or if the stronger company had a judgment go against it, that would have been more significant.”
Ilse Metchek, executive director of the California Fashion Association, said the settlement will not change the industry but it will force existing business relationships to be crystal clear.
“This was clearly a case where the store did not come into the 21st-century way of doing business,” Metchek said. “Most of the major retailers have taken a different tack, making direct contracts with a clear statement of their liability on each piece of paper. There has to be clarity in the contract paperwork. This settlement does not change the basic structure of retailer-to-manufacturer contracting. It’s a wake-up call to everyone who does business. Everything must be in line and clarified.” —Andrew Asch
