121 ex-workers sue La Mode

A total of 121 workers sued garment firm La Mode Inc. yesterday for alleged illegal termination, unpaid wages and overtime, and illegal wage deductions or kickbacks.

In a case filed with the U.S. District Court, the workers are seeking a multi-million-dollar judgment against La Mode and its owners, Edward and Barry Kahn. The workers also impleaded La Mode’s affiliate company in California, Golf Apparel Brands, Inc., saying both companies operated as a single employer.

La Mode has already stopped its Saipan operations since April 25 this year.

In a 34-page complaint, the workers’ attorney, Joe Hill, enumerated 13 causes of action against La Mode, including the alleged failure of La Mode to provide 60-day advance notices to workers of their mass layoff, as required by the Worker Adjustment and Retraining Notification Act. He said the terminations violated most of the workers’ employment contracts.

“Defendants have failed and refused to pay their employees 60 days back pay and benefits owed them under WARN, and [the workers] seek these damages,” Hill stated in the complaint.

Hill also asked the court to impose a civil penalty of $500 on La Mode for each day of alleged WARN Act violation.

Hill said majority of the workers are from China, while the others are from the Philippines, Thailand, Sri Lanka, and Korea. He said some of them worked for La Mode without written contracts approved by the CNMI Department of Labor.

Hill also said some of the workers were required by La Mode’s agents in China to pay substantial sums of money as recruitment fees as a condition of employment. La Mode allegedly required some of the workers to pay for employment processing fees and medical expenses, in violation of the Nonresident Workers Act and breaching their employment contracts.

Hill also said some of the workers were required to work more than 40 hours per workweek without paying them overtime, in violation of the Fair Labor Standards Act. He said the company failed to compensate the workers for all regular and overtime hours worked each week.

“Defendants over the years developed a practice, and for many pay periods, especially in 2004 and 2005, of issuing payroll checks to its workers…that were dishonored by drawee banks for insufficient funds, resulting in…certain [workers] being charged and having to pay bank penalties and not being paid any wages for said periods,” Hill said.

“Defendants unilaterally imposed and utilized a work regimen and system that required and forced certain [workers] to perform services and activities constituting regular work and/or overtime, off the clock, for which defendants failed to pay [the workers]…for time spent at the direction of the defendants in obtaining physical examinations; for participation in work-related meetings, and work performed off-the-clock and/or at home,” he stated.

Hill said that the workers received paychecks below the minimum wage for certain pay periods when La Mode made unauthorized deductions for employment processing fees, which violated not only the NWA but also the Minimum Wage and Hour Act and the Alien Labor Rules and Regulations.

Hill said the defendants should be made to pay the workers the amounts of unauthorized deductions plus damages. He also said the defendants should pay for costs of repatriation of the workers to their respective countries of origin.

The lawyer asked the court to grant the workers temporary work authorization while the lawsuit remains pending.

Sometime in June, the Department of Labor gave La Mode’s over 300 workers an additional 45 days to seek new employment.