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Guess Fires Back at Charges of Illegal Sewing Operations

Labor: The company suspects it was set up by union. But it says it hasn't seen the state's evidence.

August 06, 1996|STUART SILVERSTEIN | TIMES STAFF WRITER

Guess Inc., linked by state investigators to a string of illegal home sewing operations, launched a media counterattack Monday and said it suspected that a union set up violations to smear the company's reputation.

But lawyers for Guess, speaking at a news conference called at the company's headquarters in downtown Los Angeles, acknowledged they have not seen the state's evidence against the home sewing operations.

Meanwhile, state authorities continued to investigate an El Monte contractor believed to have employed workers who sewed Guess garments in their homes. Moreover, officials with both the state labor commissioner's office and with Unite, the garment industry union, denied Guess' suggestion of a setup.

For Guess, the biggest apparel manufacturer in the Southland, the bad publicity comes at a particularly ticklish time: The company has been preparing to sell its stock to investors through an initial public offering intended to raise about $200 million.

"It could be extremely damaging," said Daniel Petrocelli, a Guess lawyer who led the news conference.

In fact, Guess on Monday postponed its offering for a second time, and now the transaction is expected to take place Wednesday or Thursday.

State investigators, armed with court-approved search warrants, raided 14 homes in Los Angeles and the San Gabriel Valley last week where they suspected apparel was being produced illegally. In all, state authorities said, evidence of illegal home operations was found at 11 of the residences, including eight where clothing apparently was being produced for Guess.

State Labor Commissioner Roberta E. Mendonca said her agency "went through a rather arduous process" collecting information over a number of days on the home sewing operations before seeking search warrants to raid them. "We didn't just walk in," she said.

But Petrocelli tried to chip away at the state's case against Guess contractors suspected of authorizing illegal home work. Among other things, he suggested that home work may have been planted in some of the employees' homes by the union. In other cases, Petrocelli said, the employees targeted in the investigation weren't, in fact, working on Guess merchandise.

Petrocelli said Guess will step up its efforts to police its contractors.

If Guess determines that any of its contractors are allowing illegal home work, he said, the company "will terminate all of the contractors involved, as it has in the past."

David Young, assistant national organizing director of Unite, acknowledged that his labor organization turned over evidence to state authorities.

But, he said, "Petrocelli hasn't seen the evidence. He hasn't spoken to the workers, but we have and so has the state."

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