The New Wave of Labour Litigation Facing Fashion | BoF Professional, News & Analysis

The New Wave of Labour Litigation Facing Fashion | BoF Professional, News & Analysis

For decades, fashion brands have largely avoided responsibility for abuses in their supply chains. When reports of forced labor, sexual abuse or wage theft in garment factories surface, brands often sidestep liability by claiming that they’re just buyers of the factory’s finished goods and those problems aren’t their fault.

But twin crises caused by the pandemic’s devastating impact on garment workers and allegations of forced labour in Xinjiang, China (a major cotton producing hub), have ratcheted up scrutiny of brands’ responsibilities. Now, labour advocates are taking legal action to hold brands accountable.

In France, prosecutors have launched an inquiry against Uniqlo France, Skechers, Zara owner Inditex and SMCP, which owns labels including Sandro and Maje, for allegedly “concealing crimes against humanity” in Xinjiang. Meanwhile, non-profit labour advocacy group, the Asia Floor Wage Alliance (AFWA), is filing complaints against a number of companies including H&M, Levi Strauss & Co., Tommy Hilfiger, Columbia Sporting Company, Asics, and DKNY for alleged incidents of wage theft and union-busting in some of their Asian factories.

Uniqlo and Inditex denied the French investigation’s allegations. H&M, Columbia and Asics said they were not responsible for incidents of wage theft. Skechers, Levi’s and Tommy Hilfiger declined to comment directly on the cases. SMCP, DKNY did not respond to a request for comment.

There is a new wave of interest in finding legal — rather than merely ethical — ways to hold companies liable.

The lawsuits come as regulators are also stepping up the pressure on fashion brands. The US has banned cotton imports from Xinjiang, while the EU is on track to introduce stronger due-diligence laws that will make corporations of all kinds more responsible for what goes on in their supply chains, wherever their suppliers may be.

According to Susan Scafidi, founder of the Fashion Law Institute at Fordham Law School, it all points to shifting attitudes around what corporate responsibility ought to look like.

“There is a new wave of interest in finding legal — rather than merely ethical — ways to hold companies liable,” she said.

That’s not to say there haven’t been attempts in this arena before. Brands faced a wave of legal action in the early 2000s following a string of sweatshop scandals that resulted in a series of settlements.

It’s a common pattern that high-profile disasters or scandals in fashion supply chains drive change. The deadly Triangle Shirtwaist Factory fire in New York in 1911 inspired substantial labour reforms. More recently, the Rana Plaza collapse in Bangladesh in 2013 drove a wave of interest in stronger supply chain regulation — but multiple lawsuits filed by Rana Plaza employees or their family members were ultimately dismissed.

Scafidi describes the latest initiatives as “new theories attempting to solve an old problem.”

Part of what’s sparked the increased interest in litigating against brands is widespread public awareness of alleged human rights abuses against Uyghur Muslims in labour camps in Xinjiang. William Bourdon, the lawyer who spearheaded efforts to initiate the French investigation, says that the public’s concern is helping to create a hospitable atmosphere for legal action.

“There is a new wind that is changing judicial lines not only in France but in all of Europe,” Bourdon said. “It’s the idea that the world will be better if transnationals sincerely accept co-responsibility for our collective future … [In Xinjiang], the crimes against humanity are proven. What has to be proven is that these companies are involved.”

The benefit of pursuing legal action in western nations like France, where Bourdon’s probe is based, is that cases may move more swiftly than in fashion’s major manufacturing hubs, where they can take decades, according to labour advocates. They can also face political hurdles from governments worried about losing valuable investment from international fashion brands, advocates said.

How is it that these brands are able to make profits through these workers but are not liable to them as employers?

Nonetheless, AFWA’s strategy involves filing complaints alleging wage theft and labour violations in the countries where garments are produced, starting with India and Sri Lanka, with other complaints pending in Indonesia and Pakistan. The organisation hopes that pursuing suits in multiple countries at once will embolden local governments since brands will have less opportunity to avoid the litigation by moving their business to another country.

The organisation is looking to create a legal precedent that treats brands as joint employers of garment workers, not just buyers of finished goods.

“There’s an implied employment relationship between brands and workers because brands are controlling everything from how many stitches in a button to the design, quantity and timeline,” said Nivedita Jayaram, Asia Coordinator for Labour Rights at AFWA. “So how is it that these brands are able to make profits through these workers but are not liable to them as employers?”

Regulation in Europe and the US could soon support this argument, with extended due diligence laws in Europe and a bill to make brands more responsible for garment workers’ wages making headway in California.

Even if unsuccessful or lengthy, these cases could have a powerful impact on the industry. They could increase consumer pressure on brands that are targeted and create an opportunity for laws to “catch up” with the way that globalised supply chains have fractured labour relationships across multiple legal jurisdictions, said Jeff Vogt, rule of law director at the Solidarity Center, a non-profit focused on workers’ rights.

“Governments are recognising that self-regulation of industry has never worked,” says Vogt. “It’s still not working, and it’s time to step up.”

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