Union's Best Years Have Come and Gone Garment factories routinely trample laws and contracts
By BOB PORT Daily News Staff Writer
The Union of Needletrades, Industrial and Textile Employees, the labor advocate for exploited garment workers, has lost its bargaining power and is unable to stop abuses suffered by its own members.
While UNITE has an active "Stop Sweatshops" campaign, in New York it cannot guarantee all its members the minimum wage. The News found that:
* Union garment factories in New York City routinely violate wage laws and refuse to pay overtime. * Some union factories hide garment production from the union, cheating union members out of benefit money. * Union officials transfer millions of dollars from health funds to beef up their local staffs.
Decades ago, garment unions wielded real power in this city. Today, UNITE officials acknowledge that the union is in a struggle for survival.
"The world changed," said Bruce Raynor, who assumed the presidency of UNITE this month. "We're fighting for basic respect and dignity."
Big discount retailers so completely control clothing prices today that they can move production around the world at will, depressing wages, according to Raynor.
"Prices need to be increased," he said. "This concept of free trade doesn't bring people up to a better standard of living. It allows American corporations to exploit them."
So much clothing production has shifted overseas that UNITE's New York rank and file face a choice between poor jobs and no jobs, according to the union. Once, a strike could force a clothing company to bargain. Now, factories just close, change their names or file for bankruptcy, leaving joblessness in their wake.
"We have lost the ability to enforce the standards we want to enforce," said Steve Weingarten, UNITE's chief strategist. "The union contract doesn't get us power over who controls the industry."
But Weingarten insisted UNITE doesn't lack the will to fight. "This union fights for workers every day," he said.
Raynor said UNITE will begin campaigns targeting retailers during the back-to-school and holiday seasons.
Despite these efforts, UNITE's loss of stature draws criticism.
"I think that it's a travesty of trade unionism," said Bob Fitch, a former professor of urban studies at New York University, who is working on a book about the history of unions.
Too many UNITE business agents are cozy with clothing makers and mobsters, Fitch said, and a "caste system" distances older white bosses from the legions of Chinese immigrants they represent.
"Nobody calls them on it," he said. "If you do, they get very angry. ... It's such hypocrisy."
On paper, UNITE's contract promises garment workers a 35-hour workweek with overtime pay; paid vacation and holidays, and an absolute wage floor 15% above the federal minimum wage.
But union workers rarely get that deal. Most of the city's 300 or so union shops ignore some or all of the contract's wage and hour guarantees. And while union members do get health insurance and a local clinic, only elite staffs of Fashion Avenue showrooms can count on full union pay and benefits.
"It's common knowledge," said Wing Lam, leader of the Chinese Staff and Workers' Association, a labor rights group. "I have tons of records, shop by shop, for workers in a union shop who didn't get paid, didn't get overtime and didn't get minimum wage."
The News reviewed some of those records, including a 1992 union pay survey that found nonunion shops paying higher wages than union factories. It also found that the average pay in union shops was less than the minimum wage.
"Now, it's even worse," Lam said.
Overtime pay is almost nonexistent in union factories, much less based on a 35-hour week. Instead, some workers fear being fired unless they work a seven-day week - which violates state law.
Federal labor officials said they advise UNITE of violations regularly. State officials see violations in union shops, too. "My general feeling is that if there are violations, they're usually to a lesser degree in a union shop, but I'm very much aware that the potential is there in any shop to have a problem," said Tom Glubiak, chief of the state's Apparel Industry Task Force.
He said that in union factories where his inspectors do not find wage violations, they often see recordkeeping practices that violate the union's contract.
Seven union factories were among the state's biggest wage violators during the past two years, a News review of state records found: Additional Fashion, Apex Production, Auto Sew, Fantastic Sewing, First Wong, Matrix Fashions and Melody Sportswear.
Melody Sportswear, represented the state's biggest closed case of unpaid garment wages - $132,000 - in at least the last decade, according to computer records.
Union officials said they were pursuing complaints against six of the seven contractors when the state moved in. They said they operate "Sunday patrols" to find factories working an illegal seven-day week.
But UNITE's enforcement efforts are further strained by a New York membership that is hemorrhaging.
Local 23-25, the union's biggest, which represents ladies' wear makers in most Chinatown and some Garment District factories, said it had 24,804 members in 1994. At the start of last year, it had 17,217.
In the city's mainstay garment businesses, UNITE reports a rank and file of 26,000. In the surrounding metro area, it claims 21,000.
Altogether, the region's garment-related union locals and district councils reported revenue of $43 million in 1999. Dues, often collected in cash, are about $20 a month.
However, dues alone no longer pay all the bills.
Four years ago, UNITE officials began boosting the operating funds of locals here with $2 million a year taken from a health care fund for "administration."
Union officials said the money is used to monitor employers to make sure they pay benefit fees.
Federal officials would not comment on UNITE's practice specifically.
"The transfer of a plan's assets outside the plan without virtue of providing some service is not allowable," said Gloria Della, spokeswoman for the Pension and Welfare Benefits Administration in Washington.
The union's labor contracts are with jobbers - the clothing companies that conceive of women's wear, buy textiles and market products, such as the Donna Karan Co. These jobbers, in turn, contract with factories to sew clothes.
Through its contracts, UNITE sets wages and benefits for its subcontractor workforce.
The contracts say jobbers must pay about 22% of the cost of factory production into benefit funds run jointly by the union and employers.
But some factories treat some seamstresses as union, some not. Pay is part check and part cash, or all cash - leaving little of a paper trail.
In the last decade, 21 union and management officials have been indicted on charges of receiving or paying bribes to evade union benefit fees. One Anne Klein executive acknowledged paying as little as $200 at a time to be excused from union rules and benefit fees.
In 1998, a suit filed by 25 workers against Tracy Evans Ltd. exposed how such schemes work. A factory boss, Lai Fong Yuen, cooperated with lawyers for the workers after being indicted for wage violations while making Kathie Lee Gifford clothing.
She said Tracy Evans factories set up bogus accounts to hide what the firm owed for benefits. While churning out 30,000 garments a week from 1994 through 1997, on paper Tracy Evans appeared to spend $3,000 to $5,000 a week on production.
Meanwhile, real payments were channeled through fake companies, Yuen said.
Tracy Evans settled out of court.
"I can't comment on that," said Mark Co-hen, chief executive officer of Tracy Evans. "I don't know the specifics of it." The top union trus-tee watching local benefit funds is Edgar Romney, the president of Local 23-25 and now, executive vice president of UNITE.
Three years ago, Romney's name emerg-ed from wiretaps, video surveillance and inform-ants. For years, federal agents said, Romney had taken orders from mobsters extorting cash in exchange for labor peace with UNITE.
He was never charged with wrongdoing.
Romney declined comment despite re-peated attempts to contact him. Raynor, UNITE's new president, called the probe "nonsense," and said Romney "is honest and dedicated."
But according to a labor racketeering agent's sworn statement: "Romney directs his union's business agents and organizers to ... put pressure on companies with the threat of unionization or strike thereafter withdrawing the threat when an agreement with an organized crime family is made."
The agent described how, in 1996, UNITE targeted Exact Change, a clothes maker, to be organized. The company had been paying Joseph Ianacci, a reputed Colombo capo. "At the bequest of Ianacci," Romney canceled a strike.
By 1999, The News found, Exact Change was making clothes in one of the city's worst sweatshops: Tian Hung Fashions, a factory on E. Broadway.
Company representatives declined comment.