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'Hot Goods' Law Revived as Anti-Sweatshop Tool : Garment trade: Authorities turn to 1938 statute to prosecute sweatshop owners and clothing manufacturers who profit from wage and labor abuses.



For years, state and federal labor officials have been trying to police Southern California's unruly garment industry. And for years, the sweatshops have been winning.

Now, after discovering a new pocket of Vietnamese-owned sweatshops in Orange County's Little Saigon--and an age-old set of wage, hour and child labor abuses--federal authorities in the county have taken a new tack.

They have dusted off a 1938 statute and, for the first time, are trying to use it to prosecute not just the owners of the sweatshops, but also Los Angeles garment manufacturers who profit from them by selling clothing made by underpaid workers to some of the nation's swankiest department stores.

The law, dubbed the "hot goods" statute, forbids the shipping across state lines of any product made in violation of federal labor laws.

It has been applied to everything from auto parts to turkeys, said Herbert A. Goldstein, regional director of the U.S. Department of Labor's Wage and Hour Division in San Francisco. Until now in the garment industry, it has been used only occasionally to force sewing shop owners to pay the minimum wage.

But now, authorities are attempting to bar several Los Angeles manufacturers from shipping to retailers "hot goods" that were made in Orange County sweatshops that allegedly violated minimum wage, overtime, home sewing and child labor laws.

One of the offenders, Ho Van Chien, has signed a consent decree with the government. Federal officials are still negotiating with at least three others, and have declined to identify them.

"I am hopeful that once we start getting them into court, the manufacturers will pay attention," said Rolene Otero, director of enforcement for the Department of Labor's Wage and Hour Division in Santa Ana, who is spearheading the crackdown. "It's laborious, but we really have to get the manufacturers' attention."

Federal and state officials say their previous enforcement efforts--raids, fines, confiscating sweatshop wares--have made only a small dent in the fiercely competitive suburban sweatshop industry that has sprung up in Orange County and in immigrant communities across Southern California.

"These cases are just so difficult that no supervisor keeps doing them," Otero said. "You try once or twice and run into so much mud that it's hard to keep at it."

"Everybody has a stake in the status quo," she added. "The illegal aliens don't want to talk with us. Even the legal ones are often (reluctant) to cooperate because in the countries they come from, government has never been honorable.

"The (shop) owners are fighting for their existence, and they're sure they could make it if they were just given more time and a chance. And the manufacturers have made lots of bucks off wave after wave of immigrants."

Regulators complain that efforts to improve conditions are being thwarted by cities that are selling licenses to sew women's garments at home in direct violation of both state and federal law; by sweatshop owners who insist they will go bankrupt if they pay the minimum wage (and do go under at the rate of up to 30% a year); and by workers who won't complain, no matter how bad their treatment, because many are illegal immigrants, welfare recipients, or simply terrified.

State officials have similar complaints.

"We raid them. We fine them. They pay the fines," said John B. Carter, a senior deputy labor commissioner for the state Division of Industrial Relations in Santa Ana. "I think they feel it's just part of the cost of doing business.

"We have limited capacity to enforce something that's endemic," Carter added.

The new federal strategy is designed to overcome some of these obstacles by holding manufacturers accountable for the conditions under which their garments are made, even when the actual sewing is being done by an independent contractor.

The policy is already irking manufacturers, who say they make every effort to do business with law-abiding sewing shops, but cannot oversee and should not be held responsible for their suppliers' suppliers.

"In this industry, it's very, very hard to check unless you have a separate police force," said Arthur Gordon, president of En Chante, a Los Angeles women's dress and sportswear maker.

En Chante, which has annual sales of $40 million in junior sportswear and dresses and a client list that includes J. C. Penney, Wal-Mart and Sears, was contacted by federal officials after its garments turned up in a Santa Ana home, where a 7-year-old boy, David Valladares, was helping assemble them.

The boy's mother, Juana Valladares, had been given the goods to sew at home, in violation of both state and federal law, by a sewing subcontractor, Ho Van Chien. He in turn had received them from En Chante's contractor, Su Enterprises Inc. of Garden Grove, according to federal documents.

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