Tagged With A Sweatshop Label

Thousands come to the U.S. territory of Saipan from across Asia, lured by promises of good-paying jobs in garment factories and the possibility of a better life in the United States.

What they get, one lawyer said, is "America's worst sweatshop."

CBS News Correspondent Diana Olick reports U.S. designers and retailers are reacting Thursday to accusations made in a billion-dollar legal action that they turned a blind eye to illegal activities by manufacturers in Saipan.

Three lawsuits filed Wednesday claim that Saipan workers face beatings, forced abortions, vermin-infested quarters, barbed wire, and armed guards, all while making clothing tagged "Made in the USA" for retailers that include Wal-Mart, Sears, J.C. Penney, the Gap, and J. Crew, and designer Tommy Hilfiger.

The lawsuits seek more than $1 billion in damages for conditions lawyers say have persisted for the past decade in the 13-mile-long tropical isle in the Central Pacific.

It is the first legal attempt to hold U.S. retailers accountable for the mistreatment of workers by subcontractors under the federal Racketeer Influenced and Corrupt Organizations Act, attorneys said at news conferences in New York and Los Angeles.

The U.S. retailers are being sued by more than 50,000 workers in American Saipan. The workers said they paid thousands of dollars to get to Saipan because they thought the jobs would be good: It was in American territory and therefore fell under American labor laws.

What they found were sweatshop conditions.

More than 50,000 people, mostly young women, have been recruited from China, the Philippines, Bangladesh, and Thailand with promises of good wages, only to wind up in sweatshops that "would make medieval conditions look good," the plaintiffs' attorney, William Lerach, said in Los Angeles.

Two class-action lawsuits were filed on behalf of the workers in federal courts in Los Angeles and Saipan. Human rights groups Global Exchange, Sweatshop Watch and the Asian Law Caucus joined the Union of Needletrades, Industrial and Textile Employees in filing suit in state court in San Francisco.

According to the lawsuits, 32 factories force people to work up to 12 hours a day seven days a week, and threaten them with beatings and verbal abuse if they refuse unpaid overtime to meet quotas.

Passports are confiscated, workers are not allowed to leave the factory compound, and social activities are strictly monitored, Lerach said.

Many workers allegedly pay as much as $7,000 as a "recruitment fee" to go to Saipan, lured by recruiters who tell them they will be living an hour's train ride from Los Angeles, Lerach said.

"The real point here is that we know that these conditions occur in China, Vietnam and elsewhere in the world," said Albert Meyerhoff, counsel for the class action. "They shouldn't be permitted on American soil. We can do something in the United States, nd we have a moral necessity and we also have laws that apply."

Saipan is part of the Northern Marianas, an island chain seized by U.S. troops from Japan in World War II that negotiated a commonwealth relationship with Washington. The deal left control of immigration and minimum wages in local hands and exempted Saipan's exports from U.S. duties and quotas.

Of the 18 companies named in the lawsuits, Nordstrom, Warnaco, Tommy Hilfiger, J.C. Penney, Wal-Mart, OshKosh B'Gosh, Cutter & Buck Inc., and Dayton Hudson Corp. insist they hire subcontractors that strictly follow U.S. labor laws. Wal-Mart denied accepting merchandise from factories in Saipan.

The companies say they cannot react to the lawsuit until they have read it over fully. But they defend their standards, and some companies have told CBS News that they will conduct investigations of their own into conditions in Saipan.

The companies named in the lawsuits are Associated Merchandising Corp.; Cutter & Buck; Dayton-Hudson; Dress Barn; Gap; Gymboree Manufacturing; J. Crew; J.C. Penney Co. Inc.; Jones Apparel Group; Lane Bryant; The Limited; May Department Stores Co.; Nordstrom; OshKosh B'Gosh; Sears Roebuck & Co.; Tommy Hilfiger; Wal-Mart; and Warnaco.