Garment pact called a rip-off

The U.S. Labor Department says its deal with a law-breaking San Francisco garment factory represents a victory for workers. The workers say the factory owners got off with a slap on the wrist.

The reality falls somewhere in the middle. But this much at least is clear: There are no winners in the sad case of Wins of California.

Three former Wins employees, joined by Chinese community leaders and anti- sweatshop advocates, held a news conference Tuesday in Chinatown to insist they're owed far more than the $550,000 reached in a settlement announced by federal authorities earlier this month.

"Where is the justice?" asked a visibly angry Mui Yan Fang, speaking through an interpreter. "It is the responsibility of the government to help workers get justice."

But Kathleen Harrington, a Labor Department spokeswoman, later told me that the Wins deal represents a "historic" turning point in the government's efforts to crack down on abuses in the garment industry.

"The workers are getting 80 percent of the money they're owed," she said. "It's an unprecedented level of settlement."

That's 80 percent of $700,000, though. The workers are seeking something closer to $2 million.

Wins hit the spotlight in August 2001 when I reported how the company, which supplied clothing to the U.S. military, Sears and Kmart, was operating without a license and owed hundreds of thousands of dollars in back wages to its more than 200 employees.

The owners of Wins -- Toha "Jimmy" Quan and his wife, Anna Wong -- were forced to shut down by state and federal authorities, who called the case one of Northern California's worst-ever labor violations.

Since then, Quan and Wong have been haggling with the Labor Department over a settlement. (They also say they're the real victims here, but I'll get back to that.)

Under the terms of the deal, Wins' former clients agreed to pay $400,000. Of that amount, 80 percent, or $337,000, will go to the workers and the remainder to the company's main creditor, G.E. Capital, and to bankruptcy court.

For their part, Quan and Wong agreed to pay $213,000 to their former employees and $337,000 in government fines.

But Wins' workers say this is a paltry sum compared with the millions they believe they're owed in back wages.

"The money in the settlement is not even half of what we should get," said Lisa Chou, also speaking through an interpreter.

The problem, she and other Wins workers say, is that Quan and Wong had employees frequently work uncredited overtime -- so-called off-the-clock labor.

They also allegedly paid workers in cash, so no pay stubs existed for much of the employees' efforts.

Labor Department investigators originally estimated the outstanding back wages at $1.2 million. They subsequently revised that figure downward to $700, 000 based on their audit of Wins' books and bank records.

They did not factor in overtime pay for which there is no documentation.

"This was communicated over and over and over to the workers," said a frustrated Harrington at the Labor Department. "Obviously not successfully, though."

The Wins case would have gone more smoothly, she conceded, if language and cultural barriers had not gotten in the way. The workers often refused to cooperate with authorities.

"The factory owners, Anna and Jimmy, convinced the workers that we were the enemy," Harrington said. "They preyed upon their fears."

At the same time, the workers say their former employers coerced them into laboring for months without pay through a combination of lies and threats.

"Anna would tell us we had no place else to go," Fang said. "She told us that if we wanted to get paid, we had to keep working. If we quit, she said we would get nothing."

This seems to be the only thing the workers and Labor Department readily agree on: Quan and Wong are the real bad guys here.

"They were very deceptive," Fang said.

"We're going to get them," swore Harrington.

But that might not be easy.

I reached Anna Wong and Jimmy Quan by phone late Tuesday. No matter what government officials or former employees might say, they told me, none of it's true.

"I'm not the bad one," Wong said. "I'm the good one."

Be that as it may, she insisted that the $400,000 already paid out by Wins' former clients was actually money from her and her husband. (The government says otherwise.)

She also said she never paid workers in cash or had them work off the clock.

(Former employees say otherwise.)

Both Wong and Quan were adamant in declaring that they would not be paying any more money in the case, even though the Labor Department says they owe $550,000.

"We have paid enough," Quan said.

Compelling the pair to pay more could be tricky. Authorities believe Quan and Wong have already transferred their assets to friends and family members. A restaurant they're running in Chinatown, for example, is legally owned by a relative.

While a state investigation into the Wins case is continuing, former Wins workers and their backers say the settlement with federal authorities appears to give Wong and Quan renewed legitimacy as businesspeople.

"If Wins can violate the law and get away with just a fraction of responsibility, that sends the wrong message to the business community," said Leon Chow, chairman of the Chinese Progressive Association, a community group.

But Harrington countered that the government is "sending a clear message to other employers that if you're a bad actor, you're going to pay for it."

Like I say, there are no winners here.

David Lazarus' column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU's "Mornings on 2.'' Send tips or feedback to dlazarus@sfchronicle.com.



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