By Ji Hyun Lim | AsianWeek Staff Writer
For 18 months, 250 former employees of Wins of California, — a San Francisco garment company — the Wins bankruptcy trustee and GE Capital Commercial Services, Inc. battled one another in court for the monies owed to them by the now defunct factory owned by Anna Wong and Jimmy Quan. The opposing parties finally settled on an agreement on Dec. 31 that will compensate Wins workers in the sum of $337,000.
Under the agreement, GE Capital and the bankruptcy trustee will receive only 20 percent of the $422,000 in the lockbox that was created after confiscating money from goods made by unpaid workers and from the liquidation of factory equipment. The Department of Labor (DOL) declared that the struggle to obtain money from the lockbox has been settled and that workers will finally be compensated for wages owed to them. Currently, this written agreement is waiting to be formally approved by the U.S. District Court in San Francisco.
The battle began after workers filed a complaint with the DOL in July 2001, contesting that Quan and Wong refused to pay them for months of work. The DOL investigated these allegations. After searching through old payroll records, returned checks, interviewing workers and compiling enough evidence, the DOL was able to prove that Wins Fashion declared bankruptcy without paying workers back wages.
“Garments were made by people who did not get paid for their work,” said Deanne Amaden, spokesperson for the DOL. “It was a painstaking effort to prove that the money held in the lockbox was indeed money owed to the workers.”
After many months of dragging out the lawsuit, the California State Fund advanced the monies to workers while they were seeking employment. The money obtained from the lockbox will be used to replenish the money borrowed from the State Fund.
“The wages were tied up in the lockbox,” Amaden explained. “The state gave money from a fund set up and they get it from other sources such as licensing fees and used it to pay workers. We are able to do this under federal law.”
Secretary of Labor Elaine Chao was notified of the on-going battle last year and expressed concern over the matter. Wins workers had approached Secretary Chao about their grievances and appealed for help. Chao responded by asking for regular updates on the matter.
Said Amaden: “Her main concern has been trying to take care of these workers. I can say she made it a top priority for all the staff working on this in Washington D.C. and San Francisco.”
The DOL proposed to open discussion with GE Capital — a Wins creditor and a major source of financing for businesses — about obtaining GE’s commitment that the company will only provide financing to garment manufacturers who agree to on-going monitoring of their pay practices.
“This agreement not only provides these workers with their wages, but also has far-reaching impact for thousands of other workers in the future by restricting financing options available to unscrupulous garment manufacturers,” Chao said.
Philip Chiu, organizer with the Chinese Progressive Association (CPA), points out that the battle may not be over. According to Chiu, the DOL originally estimated that workers were owed some $1.3 million in back wages. He feels that Wong and Quan are getting away with a “slap on the wrist.”
“For the case to be settled, that’s 30 cents to the dollar,” Chiu observes. “That’s something that we’re concerned about. They are settling everything for a small amount for what they estimate is owed. It doesn’t send a very good message to the public about corporate fraud.”
Chiu argues that the DOL could have taken a harder stance. He points out that nearly a third of the workers are unemployed while others were continuing to work under the same oppressive environment as they had at Wins. CPA is also pushing for job training and job placement services for immigrants.
Agreed Gordon Mar, director of CPA, “The former owners exploited them so grossly. A third are still unemployed. Their extended unemployment insurance benefits has run out and they’re in a pretty desperate situation and even those who go back are back in sweatshops that are in a very unstable situation. We would like to see state government address the growing economic crisis facing low-income workers.”
The DOL responded by saying that they fund the local employment development offices in the community. Multilingual services are provided along with job training programs, unemployment benefits and job search assistance.
Wong and Quan face another lawsuit by the State Division of Labor Standards Enforcement. This lawsuit will attempt to convict the owners of Wins for additional penalties and pursue their personal assets. Meanwhile, the DOL and CPA view it as a victory.
Said Mar: “CPA does view it as a positive step forward and the DOL is going to be releasing a good amount of the lockbox money to the garment workers fund. It’s very positive and welcome. It’s not over. We are still pushing [the DOL] to vigorously pursue the claims of the former Wins owners personal liability.”
Reach Ji Hyun Lim at jlim@asianweek.com.
