Case Studies

Situation
In 1999, a lawsuit was filed against 18 apparel retailers, including Gap Inc., who bought products made in Saipan, part of the U.S. Commonwealth of the Marianas Islands. Almost every garment manufacturer on the island also was sued. The lawsuit alleged poor factory conditions and mistreatment of immigrant workers who came from China, the Philippines and other countries to work in Saipan.

Response
We vigorously defended ourselves because we felt strongly that the allegations against us were untrue. The lawsuit treated all retailers and manufacturers the same, regardless of specific factory conditions and company practices. We had production in only a small number of the factories sued, and we monitored the working conditions in those factories on an ongoing basis. In September 2002, we entered into a settlement. The agreement truly benefited everyone — workers, buyers and garment manufacturers — by establishing Saipan's first independent factory monitoring program.

The lawsuit helped increase our awareness of "foreign contract" workers and the unique vulnerabilities they face at the hands of recruitment agents and factory management. These workers typically leave their home country and sign contracts to work in another country. To get a job, they often incur significant debt that must be repaid before they can return home.

Outcome
Largely as a result of our experience in Saipan, in 2001 we implemented guidelines to better protect foreign contract workers in the approximately five percent of Gap Inc.-approved factories that employ them worldwide. We require that employment contracts be written in the workers' native languages and that workers must be paid at least the local minimum wage. Factory management must allow workers to control their own travel documents and wages. Most importantly, workers must be free to leave the factory and return home at any time, and management must agree to assume a proportionate amount of the returning workers' debt.

Our Vendor Compliance Officers (VCOs) regularly monitor compliance with these standards in garment factories that employ foreign contract workers.