MEDIA WATCH: Bad publicity forces swift sweatshop settlements

If there is one corporate issue that is guaranteed to yield unfavorable publicity, it is an association with factories labeled as ’sweatshops.’ Earlier this month, Nordstrom, J. Crew, Cutter & Buck and Gymboree averted negative publicity by settling a lawsuit filed on behalf of factory workers on the Pacific island of Saipan, part of the US Commonwealth of the Northern Mariana Islands. The lawsuit, brought against 17 American firms, alleged that these companies ignored conditions that spawned ’America’s worst sweatshops.’

If there is one corporate issue that is guaranteed to yield unfavorable publicity, it is an association with factories labeled as ’sweatshops.’ Earlier this month, Nordstrom, J. Crew, Cutter & Buck and Gymboree averted negative publicity by settling a lawsuit filed on behalf of factory workers on the Pacific island of Saipan, part of the US Commonwealth of the Northern Mariana Islands. The lawsuit, brought against 17 American firms, alleged that these companies ignored conditions that spawned ’America’s worst sweatshops.’

If there is one corporate issue that is guaranteed to yield

unfavorable publicity, it is an association with factories labeled as

’sweatshops.’ Earlier this month, Nordstrom, J. Crew, Cutter & Buck and

Gymboree averted negative publicity by settling a lawsuit filed on

behalf of factory workers on the Pacific island of Saipan, part of the

US Commonwealth of the Northern Mariana Islands. The lawsuit, brought

against 17 American firms, alleged that these companies ignored

conditions that spawned ’America’s worst sweatshops.’



In their coverage of the settlement, the media most often focused on

comments from Nordstrom and Cutter & Buck. These companies expressed

confidence that they could have prevailed if the lawsuit had gone to

court.



’A long drawn-out legal battle didn’t make good sense to us even though

we remain confident about our ability to successfully defend ourselves

in these lawsuits,’ stated co-president Erik Nordstrom (The Wall Street

Journal, August 10).



But the San Francisco Chronicle (August 10) may have gotten to the heart

of why Nordstrom and the others agreed to a settlement: ’Company

executives indicated that the negative publicity surrounding the

controversy was a big motive for settling.’ By settling, the companies

dramatically reduced the number of times the media would associate them

with allegations that ’workers in factories were beaten, forced to have

abortions, and literally imprisoned in rat-infested housing after being

lured to Saipan under false pretenses’ (Boston Globe, August 10).



Nordstrom made the most of an unfortunate situation by portraying its

decision as a positive step. Mr. Nordstrom told The New York Times

(August 10), ’We feel these resources are better spent elsewhere

(outside a courtroom) and could be used toward making a good-faith

effort to furthering our commitment to using vendors who comply with the

law.’



By comparison, Cutter & Buck limited its spin on the settlement. Harvey

Jones, chairman and CEO stated, ’We don’t feel like we should’ve been in

this suit to begin with. We think that we would have prevailed in the

case had we stuck it out, but this is a business decision’ (Newsday,

August 10).



Many of the reports addressed the impact that the settlement might have

on other retailers. An additional four retailers, including Ralph

Lauren, reached a verbal agreement to honor the same terms, increasing

the pressure on the remaining defendants. Albert Meyerhoff, chief lawyer

for the plaintiffs, said, ’We must ask ourselves, ’If this agreement is

good enough for Ralph Lauren and Nordstrom, why isn’t it good enough for

Tommy Hilfiger or Wal-Mart?’’ (The New York Times, August 10).



As part of the settlement, the four retailers agreed to create a dollars

1.25 million fund to finance a public education campaign and establish

independent monitoring of the conduct of their contractors. Human rights

groups and labor activists looked favorably on the fact that this was

the first time that retailers had agreed to establish such

monitoring.



Judging from the coverage of the settlement, Nordstrom and the others

who settled appear to have tailored the most effective public relations

(and legal) strategy in response to some nasty allegations.



- Evaluation and analysis by CARMA International. Media Watch can be

found at www. carma.com.



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