Court strikes out two allegations in garment lawsuit

Garment manufacturers have won a minor victory in the U.S. District Court on Saipan in the class action suit filed by a New York-based law firm on behalf of the foreign workers employed in the sector after Judge Alex R. Munson struck out two allegations from the case.

He granted the motion filed by the defendants who represented large garment firms on the island against contention that they impose excessive deductions for food and housing as well as for payment of recruitment fees charged to the workers.

Judge Munson described these claims as “superfluous and unnecessary” to favor the arguments presented by the defendants against a second amended complaint that was attached to the $1 billion lawsuit.

The plaintiffs alleged that garment firms on Saipan commit improper and excessive wage deductions for food and housing in violation of the Federal Fair Labor Standards Act, which they said have affected the overtime premiums paid to the workers.

But Judge Munson maintained that this is not within the jurisdiction of his court as the CNMI is not covered by the federal labor law, specifically the minimum wage provisions.

“The plaintiffs have failed to state a claim for unpaid overtime based on excessive deductions for food and housing,” he noted in his order.

Likewise, Judge Munson emphasized that allegation that the workers were required to pay thousands of dollars in recruitment fees as condition of their employment in the Commonwealth has no factual basis that the court can accept as true.

The plaintiffs have charged that these fees cover their transportation as well as other unspecified fees and expenses they paid to recruiters in their home countries which they said benefit the garment manufacturers.

While transportation costs should not be shouldered by workers, Judge Munson said the claim still lacks proof in the absence of connection between the garment manufacturers and the third party recruiters in the workers’ countries of origin.

“The plaintiffs chose to incur the fees… to be able to work in the CNMI. That [they] are required to pay the debts they incurred in their home countries is not illegal.
Plaintiffs have not alleged that such fees were deducted from their paychecks without authorization or that they were coerced by the defendants to turn over their wages to satisfy the fees,” stated the order.

“Those claims are superfluous and unnecessary to the resolution of plaintiffs’ overtime claims,” it added.

Judge Munson ruled in favor of the garment manufacturers to streamline the issues contained in the suit which was brought up in early 1999 against garment manufacturers in the CNMI and some of their U.S. buyers and retailers.

It accused manufacturers and mainland-based buyers of labor violations against contract workers who were hired by these garment factories from China, Bangladesh and the Philippines. They have denied the charges, although some retailers and buyers have agreed to settle the suit in recent months.

Judge Munson, in his order issued last week, has granted the plaintiffs 20 days to amend anew the complaint. Defendants Advance Textile Corporation, Micronesian Garment Manufacturers Inc., Diorva Saipan and Sako Corp. each filed the motion to strike portions of the complaint, that was later joined by various defendants.